Housing Analysis for Occupy Chicago Teach-in

Members and volunteers from Communities United Against Foreclosure and Eviction were invited to give a teach-in at Occupy Chicago on October 30th. Below is the text of a hand-out we gave Occupiers, which goes over our analysis of foreclosures and evictions in Chicago, and how occupations can change the housing system as it exists now:

We want money, land and transportation. We want the abolition of the National Banks, and we want the power to make loans direct from the government. We want the foreclosure system wiped out…. We will stand by our homes and stay by our fireside by force if necessary, and we will not pay our debts to the loan-shark companies until the government pays its debts to us”

– Mary Elizabeth Lease, 1890

This struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand, it never did and it never will”

– Frederick Douglass, 1857

 Communities created the 1%

 The 1% make their money by controlling/privatizing what we need to do our work and what we need to live our lives. This is why we’ve seen forty years of skyrocketing productivity and almost no increase in wages. This is why students must take on burdensome loans from banks to study at college and compete in the job market that offers them poverty-wage jobs. This is why we have Goldman Sachs-owned charter schools. Despite the overall decrease in household income and the increase disparity in that income between African American/Latino and white families, we are told that this is the best system. By making a profit off of the way we work and the way we live, the rich have made every aspect of our day-to-day lives profitable and have sold many of us on the idea that what benefits the 1% benefits the 99%. One of the best examples is what they’ve done with our homes.

Wall Street and the rich treat our homes as their personal ATM, accumulating vast sums of money at our expense. The wealth amassed in the top 1% literally flows from the ground up, and it flows out of some communities much faster than others.  The federally approved housing segregation of redlining created conditions for the million dollar a day contract selling in the poorest urban neighborhoods. They’ve stalked black and Latino communities with their predatory loans, in order to accumulate above average returns. Banks like Wells Fargo were fined upwards of a hundred million dollars for steering Black and Latino families into toxic, (sub-prime) loans, even when they qualified for conventional fixed rate loans.

While the banks targeted low-income and working class African American and Latino families for sub-prime loans, both the idea and the reality of public housing has been under attack. Whether they are communities of single family homes on the South and West sides or public housing communities on mostly the near North and Northwest side (Cabrini and Lathrop), the 1% has created a speculative investment market of poor and working class communities of color….and now they are cashing out.

The 1% paid communities back with an economic crisis

As their loans were unsustainable, communities of color first felt the devastating effects of the banks’ exploitative, even criminal actions. Looking for new private housing markets to exploit in the 1990s, bankers went after low-income communities of color. To increase profits, they stuck these communities with riskier loans–the riskier the loan, the more money to be made. One third of all people with sub-prime (predatory) loans could have afforded regular loans. This risky, speculative market was the first of the housing market to go, resulting in a foreclosure crisis for the urban blacks and Latinos. Prior to the foreclosure crisis of 2007-2008, Wall Street accumulated anywhere from 70 to 90 billion in the lost asset values from low-income African American communities who were targeted by these loans. Their use of housing for profit led to the largest housing bubble in US history, and resulted in the largest economic recession since the Great Depression. In the profit-oriented city, with decreasing employment opportunities, massive underemployment, unemployment hovering at 17%, and cuts in public spending, none of the 99% are a secured a safe future.

It’s clear that as long as the rich exploit our need for land and shelter for a profit, human beings will be displaced and denied their basic rights to safe and fair housing. So where do we turn to fight for these rights?

The courts protects the 1%, not the right to housing

The legal system supports and legitimizes this profit creating machine (at the expense of the 99%). Whether the courts enforce ‘’legitimate’ or fraudulent foreclosures and evictions, they are doing the same thing–protecting the profits of the rich. Those who fell victim to predatory loans understand this well. From the beginning, banks knew that variable interest rates and balloon payments (completely legal) could be used to put a new homeowner quickly into default, resulting in an eviction notice, not a home for themselves and future generations of their families. Moreover, instances where banks or firms were caught processing foreclosures fraudulently–like Fisher and Shapiro who filed false affidavits in over 2200 foreclosure cases in Cook County alone–are not the exception to the rule, but reveal only the tip of the iceberg.

Foreclosures in Chicago

For the borrower concerned with high monthly mortgage payments, the most important sentence uttered during the mortgage application was, “We’ll refinance you once your credit improves.” The best rate in 2006 was offered if the borrower could show a credit score of roughly 700 and a loan to value of 90 percent. With this target in mind, many borrowers struggled to live frugally and make mortgage payments on time, so they could quickly improve their credit and refinance into the better rate promised by their broker.

Fast-forward two years: The rules of the game have changed. Credit requirements for the best rates leapt to 760; equity conditions soar to 75 percent of the value of the home; the debt-to-income ratio; which was once 50 percent in 2006, is now 30 percent; appreciation rates plummeted. Many homes are now worth less than what is owed and because the adjustable interest rates on existing loans increased by two percentage points, hundreds, even thousands of dollars are tacked onto monthly housing payments.

The promises of a future refinance have been broken. Borrowers are now victims of the false assurances made by even the most well-intentioned broker. Homeowners across the nation now must deal with higher monthly payments, mortgages that exceed the value of the home, and the greatest threat of foreclosure and eviction in American history.

For homeowners who are not delinquent on their mortgage payments and think they are escaping the housing crisis, it’s important to note: a home is only worth what the last two, comparably sized homes within a two-mile radius sold for–and every home in Chicago is within two miles of a comparably sized foreclosure. That means all the homes in Chicago have lost equity. Not one homeowner is unaffected by the foreclosure crisis.

So where does the homeowner wind up? Foreclosure court on the 28th floor of the Daley Center. The average foreclosure hearing in front of a judge is less than two minutes, with no opportunity to tell their story. Let us not forget–we can never forget–the banks were bailed out by the very homeowners they are now refusing to refinance.

Public housing in Chicago

The city’s “Plan for Transformation” has actively displaced public housing residents since 1996. The policy’s approach to public housing–tearing down hard stock units of public housing, expanding the voucher system, thereby increasing the role of the profit-oriented private market–has become a template for national public housing policy.

Lathrop Homes, for example, is a 900-unit development built as part of a Public Works Administration project in 1938, has been purged of over three quarters of its residents through through discriminatory polices like One-Strike, (introduced almost simultaneously with”The Plan”) and by pressuring families to take vouchers as the CHA stopped new lease-ups and halted even the most basic repairs. At this time, only about 170 families remain as valiant, organized holdouts at Lathrop Homes.

The city claims that Section 8 vouchers offer choice on the kind of neighborhoods their holders can live in. Unfortunately, what the city promises and what it delivers are two different things. Many of those families who took vouchers into the private market found themselves in areas of more concentrated poverty as a result of discrimination, (Nearly half of all voucher holders live in just 10 of the 77 of the community areas in Chicago). Furthermore, many have been repeatedly displaced as the private housing to which they’ve taken their vouchers is either in foreclosure or does not satisfy the CHA conditions requirements.

So, it’s clear that not only does an economic crisis present up with the depth of our need for more public housing, not less, but that this privatization of public housing increases homelessness.

As the Nation Magazine said, “What the Occupy Wall Streeters are beginning to discover, and homeless people have known all along, is that most ordinary, biologically necessary activities are illegal when performed in American streets—not just peeing but sitting, lying down and sleeping…It is illegal, in other words, to be homeless or live outdoors for any other reason. It should be noted, though, that there are no laws requiring cities to provide food, shelter or restrooms for their indigent citizens.”

For these reasons, our primary demand is a halt to the court process as it stands currently. This means a moratorium on all economically-motivated,or, for-profit evictions, whether they are “legitimate” or not. There is nothing legitimate or just about making families homeless.

In the meantime, where are homeless families, (or even temporarily homeless Chicago-occupiers) supposed to go?

What communities must do: Occupy

Despite what the banks and courts say, we believe that land belongs to the people who live and work on it. This claim has been voiced by working people around the globe for hundreds of years. In England it was made by the Diggers, in America by the Anti-Rent Movement and the Regulators, in Mexico by Emiliano Zapata, and today by those who believe that housing is a human right. We must protect this right to the city and to the land by fighting for safe and fair housing for all. To do this, communities must interrupt this cycle of exploitation and destruction by saying no to laws that value profit over people.

There is a long history of working people fighting back against the corporations exploiting their work through general strikes and factory occupations. But with unions on the defense, and Wall Street on the offense, how do we fight back against the corporations who (as a direct result of deregulation and the lifting of tariffs in the 1980’s) no longer even offer us jobs?

If the rich have turned every moment of our lives and every community in our cities into factories for their profit, then we must occupy every community and every part of our daily life.

When the rich profit off of how we work, we must fight to take back control of our workplaces. When the rich profit off of how we live, (e.g. in homes), we must occupy our housing.

In this way, public housing is at the heart of this struggle to take back our communities. At its strongest, public housing has come closest to delivering on the human right to housing than any other housing system we have developed so far—that is housing for which families qualify based on their actual income, not how the market values it.

Over the last 20 years, the federal government, however, has taken an enormous step back in its role of creating and guaranteeing public housing, and mortgaged it to much of the private sector through project-based (privately-owned, HUD subsidized) and the aforementioned vouchering. This created a complex network of government agencies and non-profits interacting with the the local Chicago Housing Authority and the federal HUD. These entities are juggling an intentionally complex system of financial tools, in order to limit the hard units of public housing, handing control over to local developers and private corporations whose incentive is profit, not the guarantee of a human right.

For this reason, public housing residents, homeowners, and private-market renters alike, must unite in the struggle against private, profit-based housing. We have been exploited by the same financial forces and betrayed by the same government institutions. With a high rate of unemployment, hardly offset by the abundance of poverty-wage jobs and a indefinitely-crashed housing market, we must envision a more sustainable model of community-controlled housing, (not to mention the development of local economy and the return of critical services like public education, clinics, hospitals).

So where do we start?

In order to fight the immense power of banks, we believe that communities must occupy a major source of their wealth: their homes. This is achieved by refusing to leave our foreclosed houses and apartment buildings, as well as public housing. This means reclaiming foreclosed and abandoned  properties with homeless families who want to be a part of a community again.. Land takeovers and the “occupation” of our own homes and communities is like divesting from a bank, but instead of taking money out of a bank, we’re taking our land out of the bank’s control. Since financial capital produces a lot of its value by loaning against land in our communities, occupying this land is effectively like going on strike against Wall Street.

Are we ready for this in Chicago? Are we ready not only to call a General strike against the banks and Wall street, but to act on it? Communities created the 1%; can we take it back?

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