Chicago Daily Observer

Hundreds of government-subsidized apartments in Sen. Barack Obama’s former Illinois state Senate district that were built or rehabilitated by a half dozen of his close political friends and donors are now in such bad condition they will have to be demolished, The Boston Globe reports. This raises a big question for the presumptive Democratic presidential nominee: Is this the kind of change he plans to bring to the White House?

Obama co-authored an Illinois law that created $26 million in tax credits for local developers to join local authorities in public-private partnerships designed to rescue Chicago’s famously bad public housing. As a U.S. senator, Obama has also called for massively increased federal housing subsidies.

Valerie Jarrett, a close adviser to Barack Obama, stands at the center of Chicago’s controversial efforts to redevelop public housing.

Jarrett has pushed to integrate new developments by limiting the number of residents, mostly poor and black, who can live in the new communities. From the beginning, that stance clashed with efforts by residents and housing advocates to ensure the number of units set aside for the poor was as large as possible

Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured a $1.32 million loan from Northern Trust in Illinois.

The freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago.

HT: Backyard Conservative

It was, of course, inevitable. How could any politician rise so quickly on the legendarily corrupt Chicago political scene and be as pure as Obama’s devoted followers were purporting him to be? The question in the minds of skeptics was, “Who sent you?”

Well now we’re beginning to find out and it ain’t pretty. In a lengthy, and amazingly frank, Boston Globe article depicting the dismal results of Chicago’s attempt to develop and manage low income housing through private developers, we see that the candidate of change is nothing more than another Chicago machine-generated pol with his feet firmly mired in the muck of corruption of the city he chose to make his political base.

The squat brick buildings of Grove Parc Plaza, in a dense neighborhood that Barack Obama represented for eight years as a state senator, hold 504 apartments subsidized by the federal government for people who can’t afford to live anywhere else.

But it’s not safe to live here.

About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang open. Sewage backs up into kitchen sinks. In 2006, federal inspectors graded the condition of the complex an 11 on a 100-point scale – a score so bad the buildings now face demolition.

Barack Obama may have come up with a creative way to solve the housing recession: Let everyone buy property at a discount the way he did from Tony Rezko, and give everyone in America a discount mortgage the way Angelo Mozilo of Countrywide did for Fannie Mae’s Jim Johnson. Team Obama’s real estate and mortgage transactions are certainly a change from business as usual. They suggest old-fashioned back-scratching below even current Beltway standards.

Accusing City Hall of conspiring with private developers in a “land grab,” a community group is demanding local control over future development in Bronzeville.

The argument rages over about 1,800 city-owned vacant lots in the historic Near South Side neighborhood. Residents have organized the Housing Bronzeville group to pressure city officials to offer the property as part of a trust fund for affordable housing.

You may have missed some of the most interesting news in Chicago last week.

It wasn’t as exciting as the cougar shot to death in an alley, or the earthquake that shook us out of bed, but in its way, it was as startling:

On Thursday, for the first time in more than a decade, the Chicago Housing Authority opened its waiting list for federally subsidized rental vouchers. By the end of the day, with a month left to apply, people had picked up more than 256,000 application forms.

More than a quarter-million. In a day.

Housing prices dropped by over 11 percent at the beginning of this year, the largest drop in the 20 years that such data have been collected. Thank goodness.

Restoring Financial Sanity

Why are plummeting real estate prices good news? Because it’s the first sign that sanity is returning to the market. And a sane real estate market—one in which sellers recognize that they won’t get as much for their house as Al down the street got two years ago—is a precondition for a broader economic recovery.

Recessions, or any economic downturn, are always caused by the same thing: Something goes wrong. That may sound overly vague, but it’s rarely the same thing that causes a shock to the system. In an agrarian society, it might be a bad harvest or a failed monsoon season. In a developing country, it might be a slump in the global price of a major ... Read More...