The Chicago Tribune reported today that Evanston is pairing with a developer to fix up foreclosed homes for affordable housing. The full story is below.

For two years, Evanston Ald. Delores Holmes has watched helplessly as dozens of homes in her northwest side ward have been abandoned during the foreclosure crisis.

There are now more than 40 foreclosed and boarded-up homes in the predominantly African-American neighborhoods that make up Holmes' ward, she said.

"They're on different blocks and different streets," she said. "People at ward meetings talked about it. People have had to move out, and there are some very sad stories."

Help has arrived in the form of federal stimulus money — though it's unlikely to benefit directly those who lost their homes in the foreclosure crisis. Evanston has received more than $18 million in Neighborhood Stabilization Program funds through the American Recovery and Reinvestment Act — less than half of the $40 million the city requested — that will be used in a public-private partnership to help address the urgent issue of blighted and foreclosed properties on the west and south sides of the city.

Besides Chicago itself, which will get $98 million, Evanston was the only area municipality to receive money directly in this round of funding, according to the U.S. Department of Housing and Urban Development.

At least 100 vacant single-family homes, condos and two- and three-flats in Evanston's Fifth and Eighth wards will be purchased, rehabbed and converted to affordable housing by the time the project is completed in early 2013, said Sarah Flax, Evanston's community development block grant administrator.

"It's going to make a major impact on the housing and other economic problems that parts of our city are dealing with," Flax said. "It's huge."

The city is working with Northbrook-based Brinshore Developments to identify properties that will be rehabbed, gutted or, in some cases, demolished. Flax said the work could start within 90 days and the first new affordable-housing units could be on the market before the end of the year.

"Some properties may be in very good shape and only need a little work," Flax said. "Others we know are likely to be in very bad shape and may require a gut rehab."

She said the affordable-housing component of the project is a requirement of the grant and essential in ensuring that Evanston provides housing for those in the lowest income brackets. According to federal guidelines, all the rehabbed units, rental or owned, have to be occupied by households with incomes at or below 120 percent of the area median income, and a quarter of the total funds must be spent on housing for households at or below 50 percent of area median income.

"To stabilize neighborhoods you need mixed income," Flax said.

According to the terms of the federal grant, all properties to be rehabbed must be acquired at a price that is at least 1 percent discounted off the current appraised value, Flax said. Some critics have said that will create unfair competition with those trying to sell their homes on the private market.

But Jasmine Brewer, director of housing counseling with the Winnetka-based Interfaith Housing Center of the Northern Suburbs, an advocacy group for affordable and fair housing for the north suburbs, praised the program, with which her agency is directly involved.

"Absolutely, it's going to be a good thing," she said. "It will help address those issues of abandoned housing and deal with a number of things. When you look at most of these areas where there are abandoned houses, it's not helping the community at all. The lenders are not doing anything with these properties and (the program) is going to open up housing for people who otherwise could not afford it. Brinshore is known for doing some phenomenal affordable housing."

At least half the properties have to be leased rather than resold after the redevelopment work, and profits from property sales will go back into the program.

Brinshore is one of the Midwest's largest development firms in the affordable housing market, city officials said.

Its CEO, David Brint, said the federal money should help stabilize home prices in by breathing new life into neighborhoods where there have been a lot of foreclosures.

"We've talked to the (Evanston) aldermen at length about which properties are there, what they know about them which ones they would like to see done and when," Brint said. "That's a constant process."

He said Brinshore is still negotiating its development contract with the city but said the company is usually paid a 12 percent development fee, depending on the extent of its work for a particular project.

Another primary goal of the Neighborhood Stabilization Program is to stimulate the economy by creating construction-related jobs. A recent informational meeting held for contractors in Evanston attracted more than 100 people interested in learning how to bid on the various rehab projects.

"Now we have a list of interested contractors," Flax said, adding that a minimum of 25 percent of the contracts will be awarded to minority- or woman-owned or Evanston-based businesses.