The Daily Line
The biennial Cook Count Scavenger Sale, when investors are invited to bid on thousands of delinquent properties, will look different this year. For the first time, potential bidders will be able to sift through a public interactive database of properties in the county’s charge when the sale gets underway on Feb. 14.
But county Treasurer Maria Pappas hopes the next Scavenger Sale looks far more different.
“It needs a total overhaul,” said Pappas, who oversees the state-mandated process to offload properties whose owners have racked up years’ worth of tax debt. This year’s sale was delayed by a year due to the COVID-19 pandemic, further building up the backlog of abandoned properties.
“It’s a cancerous mess that needs more than just little fixes here and there,” Pappas told The Daily Line on Wednesday. “Even what I’m doing doesn’t fix it —?it just makes it more attractive.”
Buyers who have registered by this Friday will be allowed starting later this month to place bids of at least $250 each on properties whose owners have owed back property taxes for at least three of the past 20 years. This year’s Scavenger Sale inventory spans 31,209 properties, including 14,598 in Chicago.
Together, the parcels owe $1.15 billion in unpaid taxes. The winning bidder on each parcel will be awarded a lien on the property and will not be responsible for paying its back taxes but will ultimately be allowed to petition the Cook County Circuit Court for a deed to seize the lot outright.
The process has come under heavy criticism in recent years, including from county officials who say the bureaucratic tangle has kept the same low-income neighborhoods and suburbs riddled with abandoned buildings for years on end. Leaders of the Cook County Land Bank Authority have also slammed the Scavenger Sale system, calling it “modern-day redlining.”
Pappas’ office issued a 62-page report in 2020 that lambasted the Scavenger Sale process, arguing that the auction process is too lengthy and legally treacherous to attract buyers outside a handful of shadowy investors. The report also highlighted a stark racial disparity in Scavenger Sale properties, which are overwhelmingly concentrated in majority-Black neighborhoods.
University of Chicago researchers piled on more evidence last year of the Scavenger Sale’s dysfunction, finding in a study that only about 7 percent of the more than 50,000 properties entered into the auction since 2007 have returned to market-rate conditions.
“When you’re talking about 1.8 million parcels [in Cook County] and 30,000 of them are just lying around, it doesn’t sound like a lot,” Pappas said. “But when you drive to Harvey and see 4,000 vacant lots there alone, something is wrong with our system as a whole.”
“The issue is, why does nobody want this stuff?” she added. More than one-third of the properties set for auction this month were also offered at the county’s last three Scavenger Sales in 2015, 2017 and 2019 and found no new owners, according to her office.
Pappas has called on the Illinois General Assembly to revisit the state law that has since 1943 required Cook County to hold the Scavenger Sale every two years. She has tasked her new “think tank” research team comprising former Tribune investigative reporters Hal Dardick and Todd Lighty to come up with recommendations on how to tweak the state law.
“As far as we can tell, Cook County is the only place in the country that does a Scavenger Sale” to dispatch blighted properties, Dardick told The
Daily Line Wednesday. The 2020 and 2021 studies found that the result of the sale is that “very few properties actually get purchased and even fewer ever get taken to deed,” he said.
But while they look for a longer-term fix, Dardick’s team had at least one suggestion on how to improve the system for this year’s auction, Pappas said: “get the inventory online, and get it up for free.”
The Treasurer’s Office has for the first time waived the traditional $250 fee would-be bidders have had to pay to receive a full list of properties being put up for auction. And the office has updated its website with an interactive map of the properties, accompanied by a full list of the 30,000-plus properties available for download in Excel and PDF format.
“We’re trying to get somebody to say ‘Hey, I want this,’” Pappas said. “And if you don’t know that it exists, we’re not going to get that. So now we’ve made it really easy.”
The strategy may already be paying off. As of Wednesday, with two days left to register, 382 people had already signed up to participate in the Scavenger Sale. That beats the 362 people who participated in the 2019 sale and the 294 who registered to bid in 2017.
Others have already taken advantage.
The nonprofit Chicago Community Trust hired real estate database Chicago Cityscape to use the open-source property inventory to whip up its own interactive map of properties up for auction, complete with details on each lot’s size and tax liability. The project is all part of the Chicago Community Trust’s long-term effort to shrink the city’s racial wealth gap, according to Michael Davidson, the organization’s senior director of community impact.
“Our goal is for the people that live in these communities to have access to the Scavenger Sale process,” Davidson said Wednesday. “It is emerging developers, developers of color, community-based organizations that do really good work —?we would like them to participate and benefit.”
Like the Treasurer’s Office, the Community Trust is “embarking on legislative reforms” that could make the process even more effective and equitable, Davidson said. Also like Pappas’ office, the nonprofit has yet to land on what a proposed new law may look like.
“You’re going to have to look at ways in which to make [the properties] attractive,” Pappas said. “Ways to make to make it easier. Ways in which municipalities may take more responsibilities for themselves.”
Two new laws —?one in Illinois and one in Chicago —?could help municipalities take charge of blighted buildings, Pappas said.
Gov. JB Pritzker last year signed the Homeowner Relief and Community Recovery Act (SB1721),
which would amend the property tax code to make it easier for municipalities to raze or rehabilitate abandoned buildings before they end up on the Scavenger Sale auction block. The law took effect on Jan. 1.
And last month, the Chicago City Council unanimously approved the so-called “encumbrance ordinance” (O2021-5871), which will allow the city’s housing department to waive city debts, fees and liens on any property in line for “revitalization efforts.”??
Still, the Scavenger Sale is unlikely to live up to its purpose until lawmakers step in, Davidson said.
“The idea of the Scavenger Sale is to create a place where very troubled parcels go to be rescued, and that clearly isn’t happening,” he said. “So, what can we do legislatively and administratively to fix it, so that it does become the tool that it’s supposed to be?”