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Stimulate this! NCP provides platform for feds

Chicago’s working-class neighborhoods are hard hit by the severe economic recession, but LISC’s NCP neighborhoods are positioning themselves to take full advantage of federal recovery programs headed our way.

From Logan Square to South Chicago, from Woodlawn to North Lawndale, the New Communities are maneuvering on several fronts:

  • Shovel ready projects – With “stimulus” funds from the $787 billion American Recovery and Reinvestment Act working their way to Illinois and Chicago, NCP is circulating a list of “shovel ready” projects, from construction of 75 affordable units on Armitage Avenue called the Zapata Apartments, to a neighborhood “campus” at the old Washburne Trade School site on South Kedzie Avenue – a campus to include storefronts, playing fields and a residence for student teachers.
  • Mortgage modifications – Local partners active with NCP’s Foreclosure Response Fund are combing through newly issued rules governing the $75 billion Homeowner Affordability and Stability Act. In general, they like what they see, figuring it will help thousands here to refinance, or modify existing mortgages, and get substantially lower monthly payments.
  • Neighborhood Stabilization – Less visible, but no less important in the long run, are efforts by NCP neighborhoods to identify foreclosed and vacant properties that could be candidates for the city’s $55.2 million Neighborhood Stabilization Program. This program, bankrolled with federal recovery funds, will be used by developers, including non-profits, to buy and rehab – for re-sale or for rental – some 2,500 bank-owned properties over the next three to five years.
  • Centers for Working Families – Already up and running in 12 NCP neighborhoods, CWFs are seeing a big increase in demand as families seek help obtaining employment, public benefits and credit counseling. NCP-supported free tax prep centers, meanwhile, are helping record numbers claim earned income credits, sizeable refunds and even stimulus checks.

Many of these recession-fighting activities were not contemplated six years ago, in March of 2003, when NCP launched amid a national economy fast recovering from the shock of the 9/11 terrorist attacks.  But that’s the beauty of the New Communities Program: Once the organizational infrastructure is in place, once relationships are cemented and responsibilities defined, the NCP platform can be readily modified to meet changing threats and opportunities.

Shovel ready
For example, with local officials scrambling to come up with a list of “shovel ready” projects that might qualify for a slice of the massive “stimulus” bill passed by Congress in February, LISC stepped up with nominations culled from NCP neighborhood plans. There are proposals with exact locations, rosters of participating partners and additional funding sources, and so forth.

Photo: Gordon Walek

Interest in how and where stimulus dollars will be spent is keen. Earlier this month, Ald. Ric Munoz (22nd) introduced Governor Pat Quinn and U.S. Rep. Luis Gutierrez, D-Ill., to a group of Little Village business people, educators and community organizers to discuss the allocation process.

“We don’t know how the city is going to select projects for [stimulus] funding,” said Joel Bookman, LISC/Chicago’s director of programs. “We do know it can’t hurt to get our ideas on the table … in the right place, at the right time.”

Bookman stressed the list is but a sampling of what could be funded, not an exhaustive list. Besides the Zapata residential project in Logan Square/Humboldt Park and the Washburne community complex in Little Village, top candidates include transit-oriented commercial development at 63rd and Cottage Grove Avenue near the redeveloping Grove Parc housing complex, energy retrofits of older affordable housing in South Chicago, continued conversion of the Cooper Lamps factory in Logan Square to a green jobs incubator, and the rail-to-trail conversion of the dormant Bloomingdale spur that cuts across Logan Square.

A separate set of human services projects includes aid to farmers’ markets and other local food production activities in “food desert” neighborhoods, expanded summer youth internships with local employers, and commercial district clean-up, spruce-up efforts of the kind Cleanslate performs along Cottage Grove Avenue.

“Communities that are ‘investment-ready’ stand the best chance of getting these stimulus resources,” Bookman said. “And it’s those same neighborhoods that will be bouncing back first when the economy rebounds.”

Fighting foreclosures
Meanwhile, NCP partners schooled in helping those faced with foreclosure have been poring over the latest program from Washington aimed at helping them.

“We think this could raise our success rate for loan modifications from about 18 percent to 50 percent,” said Deborah Moore, director of the Auburn Gresham office of Neighborhood Housing Services of Chicago.

Photo: Juan Francisco Hernandez

The continued conversion of the Cooper Lamps factory in Logan Square to a green jobs incubator is one of many projects that could benefit from an influx of federal stimulus money.

The mortgage relief plan unveiled in February by President Obama has two main elements. One would permit homeowners not yet in arrears to refinance at today’s lower rates … without having to come up with the customary 20 percent down payment. The other, with wider potential for NCP neighborhoods, provides incentives to lenders to renegotiate defaulted loans so monthly payments do not exceed 31 percent of a family’s income.

Specifically, if a lender or its servicing agent renegotiates monthly payments down to 38 percent of a borrower’s income, the government will pick up half the cost of lowering those payments down to just 31 percent.

In addition, the government will pay servicers $1,000 for making the effort, and a like amount annually for three years if the borrower stays current. Trouble is, it takes time for announcements in Washington to echo down corporate channels to the mortgage servicers in Chicago.

“What we need to happen is, for managers to get this down to the people who are answering the phones,” said Moore.

Similar frustrations are expressed by Alejandro Guzman, economic development manager at NCP lead agency Enlace Chicago (formerly Little Village Community Development Corp.).
“Our success depends a lot on who the lender is,” he explained, of efforts to modify loans-gone-bad. “Citigroup has been very receptive. Others, like Aurora Loan Servicing, you can’t even reach them."

A complete schedule of NHS foreclosure counseling workshops can be viewed at

Fix this house
Not publicly advertised, but no less real, are efforts by several NCP neighborhoods to nominate already foreclosed, bank-owned properties for purchase and rehab by the city and its contractors under the new Neighborhood Stabilization Program.

Photo: Eric Young Smith

Cleanslate Chicago, a neighborhood beautification business that educates about the importance of recycling, is a type of service that might be eligible for stimulus money.

Late last year the city was awarded $55.2 million to buy and rehab so-called REOs (“real estate owned” in bank lingo) in neighborhoods hardest hit by the foreclosure crisis.

Twenty-five of the city’s 77 official community areas were deemed qualified for the program. City officials, however, plan to target just 8-10 neighborhoods to better focus their efforts, and to protect earlier public investments in affordable housing and public works.

There were 19,943 new foreclosure filings on Chicago properties during 2008, according to the National Training and Information Center, or nearly double the number filed during 2006. The city’s stabilization program, by comparison, aims to turn around some 2,500 properties over the next three to five years. So some triage will be involved.

Carlos Nelson, executive director of NCP lead agency the Greater Auburn-Gresham Development Corp., said his neighborhood, where many seniors lost their homes to shady refinancing schemes, hopes to get stabilization funds. Moreover, his organization and its NCP partners stand ready to protect any investment of stabilization funds.

“When we do target certain blocks,” he said, “one of the procedures is to engage the local residents in the creation of block clubs as part of this whole project …  It’s not just about physical rehab. It’s also about community support.”

Ten of the 25 neighborhoods eligible for stabilization are, like Auburn Gresham, in NCP. The others are Chicago Lawn, East Garfield, Englewood, Humboldt Park, North Lawndale, South Chicago, Washington Park, Woodlawn and two (Oakland and Grand Boulevard) of the four that comprise Quad Communities.

Ellen Sahli, deputy commissioner for housing in the city’s Department of Community Development, has said the existence of NCP plans in those neighborhoods bodes well for their inclusion. But it’s early. The city and its hired program administrator, Mercy Portfolio Services, only recently began its inventory of available REOs. But things soon will move fast. Mercy intends to purchase a first phase of 350 properties within 18 months.

Boom times at CWF 
Not surprisingly, the steep economic recession has triggered a land-office business at the 12 Centers for Working Families affiliated with NCP.

“We’re being flooded with people looking for jobs, looking for Food Stamps, looking to save their house from foreclosure,” said Ricki Lowitz, LISC/Chicago’s senior program officer in charge of the CWF network since inception in 2004.

“In a way it’s the perfect storm,” Lowitz said, “what with predatory lending leading to foreclosures and evictions, and now the huge job losses.”

Last year the Centers helped more than 8,000 limited-income Chicagoans, including some 5,000 with employment services, and 1,000 with help securing public benefits worth an aggregate of more than $1 million.

This time of year, though, the most popular LISC-sponsored financial service is free income tax preparation provided by volunteers with the Center for Economic Progress.

David Marzahl, CEP’s executive director, predicts that before April 15 some 32,000 area families will have had their returns professionally prepared. Many will claim an earned income credit of up to $4,824 and open a no-fee checking or savings account in which to deposit their refund.

Sites, times and locations of CEP’s free tax prep are listed online at:

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