As many of us know firsthand, the Chicago region was hit particularly hard by the housing crisis and we are still far from a recovery. Yet despite the swaths of vacant and abandoned homes we continue to walk and drive by regularly, there is a significant lack of affordable housing across Illinois. In the Chicago region there are only 25 affordable homes available for everyone 100 extremely low-income families, according to a new report by the National Low-Income Housing Coalition. And don't be fooled into thinking that this population is insignificant or that this trend doesn't affect your community—28% of renters in the region are extremely low-income.

So what is happening? Why is there such a disconnect between these vacant homes and those needing affordable housing? This post aims to start a conversation on how we interpret and adapt to these shifting trends, outlined below:

1. The foreclosure crisis is not just a housing crisis but part of a global recession. The recession has resulted in increased unemployment, reduced wages, and higher rents. This particularly affects low-income families who on average are now paying more than 50% of their incomes towards housing costs. When looking at housing and transportation costs together, moderate-income families bear the heaviest burden and spend 58% of their income towards housing and transportation costs. The rise of the mega-commute, those commuting more than 90 min. and 50 miles, continues to contribute to this negative trend.
   
   
2. The rental market is red hot. With previous owners swamping the rental market, demand is driving rents up. In order to compete in a tight rental market many households are renting above their appropriate price point—meaning that many lower- and middle-income households are taking what they can get in the market and are paying well over 30% of their income towards housing costs, while many higher earners are snatching apartments better priced for a lower income bracket.
   
   
3. Mortgage debt relief and mortgage to lease programs have not had widespread impact. While various banks provide loan modification programs that could potentially keep families in their homes and Fannie Mae, Freddie Mac, Bank of America and others have mortgage to rent programs, which allow property owners to rent their foreclosed homes, the eligibility restrictions are strict and limit the number of owners able to stay in their homes.
   
   
4. Illinois' foreclosure process and courts are back-logged—it takes lenders an average of 647 days to repossess a foreclosed home. A significant portion of foreclosed properties are vacant, dilapidated, and in need of rehabilitation and do not provide new housing opportunities for renters. Illinois Senate Bill 16, which passed in Dec. 2012, will accelerate the foreclosure process and increase revenues for neighborhood stabilization. Time will tell the impact of this legislation.
   
   
5. Access to credit is limited, particularly for previous homeowners who may have lost their homes or walked away from negative equity and now find it difficult to enter the homeowner market again. These homeowners now struggle to access credit to purchase a home better suited to what they can afford. This is not to say that homeownership is for everyone but rather there is no place for former homeowners in the marketplace right now—augmenting the impact this group has on the rental market. Additionally, strict lending regulations impact new homeowners and those considering purchasing a home for the first time. At the same time, home prices are  still low so there is an incentive for those looking to become first time homeowners if the lending market would allow it. This would not only help stabilize neighborhoods but relieve an inflated rental market.

We are living through a period of immense change—in the job and housing market and with sequestration underway– and there is a pressing need to better connect foreclosure solutions with housing demand. Households experiencing rent burden and long and expensive commutes have reduced quality of life and are at risk of losing their homes. The dire need for housing affordable to all segments of the population is critical and we at MPC invite your thoughts on the issue.