A report released in April by real estate data aggregator ATTOM has bestowed Chicago with a dubious honor. Amid a national surge in residential foreclosure rates, Chicagoans are currently losing their homes in greater numbers than in any other metro area in the country.

the report stated, with Chicago alone seeing over 3,000 foreclosures in the first three months of the year.

If you interpret the numbers as a per housing unit rate, Cleveland manages to pull ahead of Chicago with almost one in every 500 homes foreclosed since the start of 2022. But by the same metric, Illinois still leads the nation on a state level — close to one out of every 800 homes. California, as the country’s most populous state, wins out as the state with the highest raw numbers of foreclosed homes this year. More than 5,300 households in the Golden State had begun the foreclosure process as of April.

As shocking as this spike in home loss is, experts said it was predictable — the inevitable result of the end of the pandemic eviction moratorium. Enacted by Congress in March 2020 under former President Donald Trump and struck down in August 2021 by a supreme court ruling under current President Joe Biden, it was a national exercise in decommodified housing that staved off homelessness for an estimated 1.5 million Americans.

But now it’s over.

“In great part, this is the fault of the lifting of the moratorium,” said Ken Johnson, the dean of graduate studies at Florida Atlantic University’s College of Business. “It’s not 100% to blame, there’s always a natural rate of foreclosure, but it is a major factor.”

“It’s the moratorium lifting,” agreed professor Marie Reilly of Penn State University, who specializes in bankruptcy law. “During the moratorium people weren’t eligible for mortgage mitigation… now we’re seeing the market respond to that.”

While agreeing on the general cause of the foreclosure wave, the pair offered differing explanations as to the granular mechanisms driving it. Reilly suggested that it may be the result of the Federal Reserve interest rate, the rate at which the Federal Open Market Committee suggests commercial banks borrow and lend money to each other.

When the rate is low, consumers can get lower rates on credit cards, loans and adjustable-rate mortgages. But at the moment it’s rising, from around 0.25% in March 2020 to around 0.75% — 1% as of this May. The increasing figure reflects the 40-year high in inflation the U.S. is currently experiencing, and makes it hard for property owners without much capital to hold on to their unprofitable buildings. As the U.S. working class struggles to make ends meet, their economic hardship trickles up to the rest of society — including their landlords.

“The other thing that could be affecting [the foreclosure rate] is the Federal Reserve interest rate,” Reilly said. “It could be making it harder for landlords to hold on to non-rent-paying properties.”

As small landlords shed these properties, Reilly explained, larger development firms will often come in to buy them up on the cheap — sometimes with the blessings of municipalities looking to avoid the crime that comes with abandoned or vacant buildings. While large firms buying up property staves off that immediate concern, the result is usually an increase in rent or home ownership costs in the area, further driving out residents who cannot afford the rising prices. It’s the economic foundations of gentrification.

“Vacant properties are not good for anyone,” Reilly said. “And it’s not always easy to tell if its a resident who’s going to be dispossessed, or if it’s a remote investor who’s just abandoning the property.”

Johnson offered another view. He suggested that there simply weren’t enough homes, particularly affordable homes, in many areas of the country. The cancellation of the moratorium only exacerbated the problem.

“There is a huge inventory shortage,” Johnson said. “That’s the total number of [housing] units.”

Figures from the Pew Research Center corroborate this. There were an average of 1.5 million monthly active home listings in the U.S. in October 2016, while in January 2022 there only about 409,000. During the same time period the median cost of a home in the U.S. rose from a little over $300,000 to over $400,000. Renters fare little better, with the national average cost of rent rising by 18% since 2017, more so in metro areas. The rent market research site Apartment List estimated that the average apartment in Chicago alone was 11% more expensive in April 2022 compared to April 2021.

“There’s just not enough roofs to live under,” Johnson said.

This assertion is sometimes challenged by analysts on the left, who point out that as of 2020 there were some 16 million vacant homes in the U.S., compared to a homeless population that hovers around 550,000. But Johnson called this a red herring. If someone on the East Coast has their home foreclosed, he said, it wouldn’t much matter to them that there is a surplus of housing in a town on the West Coast.

Additionally, the number of homes affordable to people making less than 50% of area’s median income accounts for only about 35% of the nation’s housing stock, and state-subsidized public housing accounts for less than 1%. Some large metro areas such as Los Angeles and Chicago even have a history of destroying their public and affordable housing stock, such as when the Chicago Housing Authority infamously began tearing down the Cabrini-Green public housing project in 2000 under the direction of then-Mayor Richard M. Daley. All this means that even if many homes are technically available, they likely won’t be held at a price that a recent foreclosee can afford.

The cold comfort both experts offered is that the current foreclosure crisis is not as intense as that experienced by the nation during the 2008 Great Recession. Reilly called the 2008 crisis a “seize-up” of the market, one she said we’re “nowhere close” to.

Johnson said that while the current crisis stems from an under-supply of housing, the 2008 crisis was caused by the speculative bubble bursting on an over-supply of single-family housing.

“There may be places that are hit hard based on population changes, but… it’s a matter of under-supply vs. over-supply,” he said.

Neither expert had concrete ideas on how to solve the current crisis. Reilly urged anyone facing foreclosure to file for Chapter 13 bankruptcy, if they could, while Johnson suggested this wasn’t a problem that can be fully solved by market manipulation.

A 2020 collection of analyses by the UCLA Luskin School of Public Affairs vehemently agreed. It arrived at the conclusion that the only solution to the foreclosure and housing crisis was housing decommodification. It suggested a strategy that instead prioritized state and community-owned homes that were not subject to profit speculation.

“To have a roof over our heads is essential in human development, but this is threatened when housing is a way to make profits in communities whose market values increase and attract the attention of corporate investors,” one of the analyses in the collection argued.

Back in Chicago, the city government on Friday announced a much more capitalist-friendly initiative to combat its nation-leading foreclosure spike. Mayor Lori Lightfoot, along with Alderman Carlos Ramirez-Rosa — her frequent critic from the left — officially opened the Emmett Street Apartments in the city’s mixed-income Logan Square community. All of the 100 apartment units in the building will be made affordable to people making at or below 60% of the city’s area median income, while half will be reserved as public housing units.

“I am excited that after years of community organizing and struggle, we are finally cutting the ribbon on a beautiful building that will house 100 working families in the heart of Logan Square,” Ramirez-Rosa said in a prepared statement. 

However one thinks the housing crisis should be handled, there’s a catch to the whole situation. Despite the current foreclosure rate being the highest since the pandemic began, it is still lower than the average pre-pandemic foreclosure rate — only about half as many foreclosures were initiated in the first quarter of 2022 as were begun in the first quarter of 2020. ATTOM’s researchers predicted we would eventually see a return to “historically normal” foreclosure levels, perhaps as soon as the end of the year.

“It’s likely that we’ll continue to see significant month-over-month and year-over-year growth through the second quarter of 2022, but still won’t reach historically normal levels of foreclosures until the end of the year at the earliest, unless the U.S. economy takes a significant turn for the worse,” the report states.

In other news, Wells Fargo CEO Charlie Scharf told the Washington Post earlier this week there was “no question” that the U.S. economy is headed for a dive.