Lack of single-family home investment concerns Round Lake Beach officials
An inventory of foreclosures and a continued uptick in rentals have prompted Round Lake Beach officials to seek help in assessing the village's real estate landscape.
Village leaders want to get a better understanding of the big-picture impact of the economic downturn on the local housing market and what strategies might be available to quell an emerging trend.
“We appear to be in a phase or mode of not a lot of reinvestment going into our single-family housing stock,” said John Wildenberg, economic development director.
“We're looking for a pretty thorough investigation of the conditions here — what's really going on, what are the impediments and is there anything the village can do?”
Round Lake Beach has been one of the harder-hit towns in terms of foreclosures and has seen a continued rise in the number of rental homes. Basically, investors the past two years have been buying, but would-be single-family homeowners have been less active.
“We're trying to find a way to attack that problem,” Mayor Richard Hill said. “We're looking at the mix in neighborhoods — what can attract homebuyers rather than investors?”
To do that, village officials have hired specialists from its legal firm — Ancel, Glink, Diamond, Bush, DiCianni & Krafthefer — to develop a residential rehabilitation plan. The fee is not to exceed $35,000.
While the foreclosure trend is easing, there still is an inventory to deal with, village officials say. According to data from the Woodstock Institute, there were 125 foreclosures in Round Lake Beach during the first half of 2013, compared with 221 for the same period in 2012.
“At one point, we were experiencing foreclosure activity on 25 percent of the housing stock,” Wildenberg said of figures through June 2013. Most of the 8,500 households in the village are single-family detached homes, he added.
“The problem it creates is more vacant homes in a neighborhood and the slow process for them to be reoccupied,” which can lead to blight, Village Administrator Dave Kilbane said.
The village in recent years has been trying to address problem areas and has purchased about 20 properties. Kilbane said the original strategy was to buy and rehab homes to resell, but the focus has turned to demolishing them and making the land available for sale to neighboring homeowners or another buyer.
Prices have ranged from $10,000 to $25,000, with another $5,000 to $6,000 for demolition, he said.
“What's the strategy now? Is this money the best way to target economic redevelopment in the residential neighborhoods?” Kilbane said.
He also wondered why it might be more attractive for some buyers to remodel older, small homes built on piers rather than starting fresh.
“Why is it more attractive to rehabilitate a house rather than take it down?” he said.
Whether there are village policies or fees, for example, that inhibit that practice is something the study is expected to answer as part of a “holistic” approach to the housing issue, Kilbane added.
Besides a variety of information, the report will include suggested actions that can be implemented.