Illinois is the last state to unlawfully strip wealth from homeowners caught in tax foreclosure

A decades-old state law allows private investors to take people’s homes — and all of their home equity — over unpaid property taxes. Critics say it’s a racist policy most impacting Black communities. The nation’s highest court recently ruled homeowners are entitled to their fair share, but Illinois lawmakers have failed to act.

By Emeline Posner and Carlos Ballesteros for Injustice Watch

This is a joint project of Injustice Watch and the Investigative Project on Race and Equity.

When Cook County sheriff’s deputies burst into the Maywood home of 74-year-old Velma Lewis with a battering ram, it wasn’t because she had committed a crime or had a warrant issued for her arrest.

It was because she fell so far behind on her property taxes.

Lewis — whose mother purchased the two-flat in 1961 and had long since paid it off — made the fateful decision a decade ago to replace the building’s tattered roof instead of paying a $6,200 property tax bill.

After she failed to pay the taxes for another nine months, county officials auctioned off her tax debt to a private investor, as required by state law.

Retired and living on a fixed income, Lewis said she was saving up to get current on the taxes, but she ran out of time. In the end, the investor foreclosed on Lewis’ home, and three years and several more missed tax payments later, sheriff deputies showed up at her front door.

“They told me I had to get out, and they were searching the house, asking me, did I have any guns, and ‘if you got any medicine, get your medicine,’” said Lewis, recalling the day she was evicted from her family home.

In the end, the investor who paid her delinquent property taxes took the deed to Lewis’ home, which was worth around $180,000.

Lewis walked away with nothing.

“I can’t dwell on it too long ’cause it’ll make me cry,” Lewis said.

Stories like Lewis’ have played out time after time throughout Cook County’s predominantly Black neighborhoods, where for decades homeowners have lost their homes over unpaid property taxes.

Some said they fell behind because they lost jobs, others because of emergency expenses or debilitating health issues such as Alzheimer’s disease. And according to a review of hundreds of court records plus a dozen interviews, some said they simply couldn’t keep up.

A first-of-its-kind analysis of tax and property records by the Investigative Project on Race and Equity in partnership with Injustice Watch reveals how, since 2019, more than 1,000 owner-occupied homes in Cook County — including more than 125 homes owned by seniors — were taken through property tax foreclosure.

The investigation comes as Illinois Gov. JB Pritzker considers a run for president, touting his record on issues of racial equity while still presiding over the last state in the nation to adopt reforms aimed at giving homeowners their fair share of tax sale proceeds.

While owner-occupied homes lost to tax foreclosure represent only a tiny fraction of Cook County’s 1.5 million residential properties, records and census figures show they are highly concentrated in predominantly Black communities like Roseland, Englewood, and Chicago Heights.

More than half of all homes were taken following an initial property tax debt of $1,600 or less, records show. A dozen started out owing less than $200.

Collectively, tax sale records show the initial debt that cost people their homes totaled $2.3 million, but an analysis of Cook County assessment data shows these homes have a combined estimated market value of more than $108 million.

All of the equity tied up in their homes — which in many cases, like Lewis’, was built over generations — went largely to a small network of private investors who took over the deeds after paying the delinquent property taxes.

This massive transfer of generational wealth from families in Black neighborhoods to affluent investors has long been criticized by housing advocates and civil rights leaders as yet another racist financial practice — one that has drained wealth from Black Americans since seeking refuge in Chicago from the Jim Crow South in pursuit of the American dream, including homeownership.

In the decades since, Black homeowners in Cook County have weathered predatory contract buying, redlining, discriminatory lending practices, the foreclosure crisis, and a property assessment system leaving them with some of the highest taxes relative to their home values in the county.

Researchers and experts say the unfair property tax foreclosure system was just one of these predatory real estate practices aimed at taking advantage of vulnerable homeowners.

This project was produced with the support of the Fund for Investigative Journalism.