A Chicago City Council committee Wednesday passed a measure that would give additional protections to renters in foreclosed buildings, but the proposed ordinance will be held in committee until June 5.
Under the proposal adopted by the council's Housing and Real Estate Committee, lenders that repossess a foreclosed rental building, whether it's a detached single-family home or an apartment high-rise, would have to either offer tenants $12,000 per rental unit in relocation expenses or leases with annual rent increases of no more than 2 percent. The proposal would apply to any entity that acquires a rental building at a court-ordered foreclosure auction, but not to anyone who buys a foreclosure in a private transaction after the auction.
"We keep being adversaries with the banks," said Ald. Richard Mell, 33rd, the measure's sponsor. "I don't want to be an adversary. All I want is the banks to come in this city and say, 'Let's work this problem out.'"
Mell said he does not expect any substantive changes to the proposal supported by Mayor Rahm Emanuel.
Ald. Matthew O'Shea, 19th, backed an earlier version of the ordinance but said he doesn't support the current version because he believes the compliance costs involved would drive down the values of foreclosed properties as well as other homes in a neighborhood.
Brian Bernardoni, senior director of government affairs and public policy at the Chicago Association of Realtors, said the measure would be bad for the real estate market and the city's transfer tax collections, would make renting more expensive and could face legal challenges.
"If that's the lawsuit, we'll take that one on," said Rose Kelly, senior counsel for the city's Law Department. "We're pretty sure we're in compliance."