How Foreclosure Has Devastated Latino Chicago (and What We're Doing to Help)
The foreclosure crisis has had a significant impact on the City of Chicago, changing the landscapes of community areas and contributing to the decline in the city’s population. National and regional organizations such as the Woodstock Institute and the Latino Policy Forum have conducted extensive research on the foreclosure crisis and its impact on various racial and ethnic groups. Woodstock Institute analysis reveals how predatory and subprime lenders targeted and preyed upon Latinos and other communities. The effects of these predatory loans—combined with those of the general financial crisis—have had a significant impact on Latino communities in Chicago.
There is no information readily available on foreclosure filings by race or ethnicity in Illinois or Chicago, so the Forum looked at the foreclosure filing numbers in the Chicago Community Areas (CCA) with Latino-majority populations (CCAs with 50 percent or more Latino residents in 2010). Based on the Forum’s analysis of Woodstock foreclosure data, the Latino-majority areas experienced 22 percent of the city’s total foreclosure filings from 2007 to 2012. In other words, nearly one in four foreclosures likely occurred in a Latino household—even as Latinos account for just 19 percent of Chicago homeowners. (Note: These numbers do not include foreclosure filings for Latinos living outside of these Latino-majority Community Areas, and may include foreclosure filings for non-Latinos living in those areas.)
What’s more, as other research has shown, Latinos’ economic well-being was the hardest hit by the housing crisis nationwide. Latino households lost 66 percent of their wealth from 2005 to 2009. In 2005, home equity was accountable for two-thirds of Latinos’ net worth. The decline in home values during the housing crisis was the primary cause for the loss of wealth among Latinos.
Still, the negative effects of the foreclosure crisis have not been limited to the decrease in home values and loss of wealth. The crisis has ravaged Latino communities in Chicago and the nation, creating neighborhood blight and higher crime rates in areas heavily impacted by the crisis. The foreclosure process has displaced families and fostered instability.
The housing crisis is a multi-faceted problem that requires a multi-faceted solution. The approach to the solution must involve collaborations between government agencies, community organizations, banks, and private investors in order to provide thorough and effective assistance to the families and communities impacted by the foreclosure crisis. The Latino Policy Forum is currently a member of the Regional Home Ownership Preservation Initiative, which is comprised of housing organizations from Chicago and the six collar counties. We hope that by working in such a collaborative venue, we can make a tangible and profound impact on the foreclosure crisis in the Latino community in Chicago and the surrounding areas.
(PHOTO: Respres/Wikimedia/Creative Commons)