Chicago homeowners to see additional flood repair assistance thanks to Martwick law

SPRINGFIELD - Chicago homeowners who pay into home equity assurance programs will soon be able to use their tax dollars to protect their home from flooding, thanks to a new law led by State Senator Robert Martwick.

"Flooding in Chicago has been getting worse each year, posing a significant threat to homeowners, especially when their insurance won't cover the steep costs associated with restoration after a flood," said Martwick (D-Chicago). "Allowing home equity assurance programs to provide financial relief is a crucial step in terms of giving back to the communities that they serve."

Illinois first allowed the creation of home equity assurance programs - or HEAPs - in 1987 with the goal of preserving the value of a resident's property. The programs are funded through property taxes collected from homeowners in the HEAP district, who can enroll in the program by paying for an appraisal of their home. In return, they receive the guarantee that if they own the home for five years, they will not lose money when they sell the home if the market value has dropped.

Passed after the election of Chicago's first Black mayor, many believe the true intent of the HEAPs was to ensure that white homeowners would not sell their houses and leave the city - a phenomenon known at the time as "white flight."

To move beyond the outdated goals of the program and put the HEAP revenue collected from homeowners to better use, Martwick passed a law in 2015 to allow the governing commissions of HEAPs to provide low-interest home repair loans to members of the program. Previously, commissions could only repurpose funds for low-interest loans under a public referendum, and only one of the three HEAPs in Chicago had done so. As of Jan. 1, 2022, the loans can also be used to pay delinquent property taxes.

This new law further addresses the limitations of home equity assurance programs by allowing the loan funds to go toward grants or rebates for repairing or preventing damage from natural disasters, including flooding. Homeowners will be able to use the funds to make repairs and maintain, remodel, alter and improve their homes, basements or landscaping.

"This will provide much-needed relief for Chicago taxpayers," Martwick said. "Helping residents to restore their homes maintains the long-term health and stability of our communities."

House Bill 4921 was signed into law by the governor on Friday and goes into effect Jan. 1, 2025.