Earlier this month, we cheered the passage of a few bills in Springfield dealing with the urgent -- and largely overlooked -- issue of foreclosures.  As notices continued to spread throughout the region and cause vacancies to rise statewide, it appeared that housing was one area where lawmakers really delivered. But after talking to several housing advocates who worked tirelessly in Springfield this session, the outcome is gloomier than we originally thought. Just like in Washington, D.C., the banks wielded a lot of clout.

One bill with a lot of promise was HB 1195, which aimed to enable municipalities to alleviate the negative side-effects of property vacancies. As originally written, the bill had three major provisions. First, it ensured that when taxes on a delinquent property are sold or a foreclosure is initiated, municipalities would receive a prompt notice from the county collector that includes contact information for the person or firm responsible for maintaining the property. Secondly,  it provided municipalities the power to create a land bank -- a public authority that can efficiently hold, manage, develop, and ultimately sell tax-foreclosed units. Lastly, HB 1195 offered  financial protections for communities who clean up and stabilize empty properties if banks and landlords ignore them.

To the excitement of housing advocates, it sailed through the House with all of the major provisions intact. But that's when the bankers and realtors got involved. According to multiple sources, representatives from the financial institutions refused to meet with housing advocates to discuss the proposal for months, describing the bill as complicated and saying they needed time to study it before entering negotiations. Late in the game, they came to the table with some stiff demands. The land bank provision was apparently a non-starter.  For instance, the Illinois Association of Realtors released a statement arguing that land banks granted localities  "the power to acquire any property (residential, farm, commercial, industrial), at any time, by virtually any means (acquisition via eminent domain is unclear), and for any purpose." (In fact, land banks have no right to employ eminent domain.)

Strangely, an industry reliant on property transactions fought a bill that would likely stabilize home prices, leading to more transactions and unquestionably higher profits. They also leaned on lawmakers to modify the third section of the bill dealing with property maintenance, seen by many as the key component of the package. In the end, it passed the Senate towards the end of the session, but in a severely watered-down form. While the basic principle of municipality reimbursements was kept in place, industry negotiators worked in a sunset clause. Provisions holding banks liable for upfront maintenance costs went down in flames as well, meaning local governments would have the power to fix up empty properties, but might have to wait months or years before they are reimbursed, making the financial risk too high in many cases. “They de-fanged the bill," said one source who works on housing policy, "making it much less painful from their perspective.”

Thankfully, when the bill returned to the House for a concurrence vote, representatives took steps to improve the bill slightly. The measure now awaits a second, no doubt stressful, concurrence vote in the Senate. We'll update you on the specifics once we find them out.

State Rep. Will Burns' "Bill of Rights" for renters met a similar fate. The law succeeded in guaranteeing that, should a new owner step in to run a rental property, existing tenants must be informed within 21 days that the property has changed hands. Those notices must also include contact information for the new operator of the premises as well as a foreclosure case number, if necessary. Dropped from the bill, however, were habitability standards for the building -- intended to maintain an environment that’s “safe, healthful, and fit for occupancy." Apparently, taking care of a property you control -- even briefly -- is too much to ask of large lenders. A housing advocate aptly described the hurdles progressives must go through when challenging moneyed interests in Springfield: “I think that when dealing with financial institutions," she said, "you often end up with a highly negotiated bill.”

Housing organizations aren't resigning to defeat. A land banking bill is likely to be reintroduced next session. Outside of the legislative arena, groups are working to pilot a large foreclosure mediation project between banks, homeowners, and renters. As one source told us, "This session is going to strengthen our organizing work.”

Ed Note: Because of ongoing negotiations, our sources asked not to be named.