City frees $4M in funds to rehab foreclosed houses
More than $4 million in Neighborhood Stabilization Program (NSP) funding is now available for the purchase and redevelopment of foreclosed properties in Boston, particularly in Dorchester, Roxbury, Mattapan and other neighborhoods hardest hit by the foreclosure crisis, Mayor Thomas M. Menino announced Monday.
The money is part of the $8 million in combined federal and state funds made possible by the Housing and Economic Recovery Act of 2008. Last month, the city announced the allocation of $1.5 million for down payment assistance programs.
Menino said in a statement that the aim of releasing the NSP funds is “to help restore the fabric of our neighborhoods and further stabilize home values.” The funds will also help create construction jobs, he said.
Boston has about 985 “real-estate owned” (REO) homes — foreclosed properties that were bought back by lenders and have not been resold. Many of them are vacant and in disrepair, causing the blighting of some city neighborhoods and contributing to the further decline of property values.
“The foreclosure crisis and credit slump are leaving cities with hundreds or even thousands of vacant homes,” said Lucy Warsh, a spokesperson for the city’s Department of Neighborhood Development (DND). “We simply want to restabilize neighborhoods and restore Boston’s housing stock.”
Both nonprofit and for-profit developers may apply for the funds, which will be distributed by the DND’s Neighborhood Housing Development division. The money is intended for rehabilitating REO properties for “three target uses: owner-occupied homes, rental properties for low- and moderate-income renters, or supportive housing for homeless families,” according to the DND statement.
The city will give higher priority to proposals for properties within the specified NSP “target area,” Warsh said, which includes parts of Roxbury, Dorchester, Mattapan, Hyde Park and East Boston.
John J. Drew, executive vice president of Action for Boston Community Development (ABCD), said the funding will have a positive impact on the low-income people and neighborhoods his agency helps, particularly tenants who lost their housing when their buildings went into foreclosure.
“The big fact is, it will stabilize properties that have been abandoned and will get tenancy back,” said Drew. “The quicker we can stabilize housing now not being used, the more able we are to get people back into housing. And to me, that’s valuable.”
Drew praised the mayor for taking swift action to distribute the money, and expressed hope that the redeveloped housing will be affordable.
Steve Meacham, tenant organizing coordinator at the advocacy organization City Life/Vida Urbana, said the money is a positive step, but other steps are needed to keep bank-owned properties from becoming vacant in the first place.
“Rehabbing vacant properties for resale is basically a good thing,” said Meacham. “Those vacant properties are a waste and bring down the surrounding neighborhood.”
Meacham said he strongly supports working to keep tenants and homeowners in their homes even when foreclosure can’t be avoided. While the city has put funding into efforts to prevent foreclosure, City Life/Vida Urbana works to help property owners or tenants negotiate with banks during the foreclosure process, and even after its conclusion, to try to rent or buy the property at its new lower value and thereby keep it occupied.
Meacham also said that properties receiving government subsidy for resale should have deed restrictions or land trust ownership to preserve affordability for future generations.
Warsh said the new funding is intended for affordable housing projects, though she did not specify what rules would be in place to ensure affordability.
“This is part of our ongoing effort to rebuild the neighborhoods affected, and to partner with nonprofit and for-profit [organizations],” said Warsh. “[The developers] know that affordable housing is our business.”
Applications for the development funding will be available on March 30, 2009, at the DND Bid Counter, located on the 10th floor at 26 Court Street in Boston, or by visiting the DND Web site at http://www.cityofboston.gov/dnd.
Developers interested in applying for funds will have an opportunity to ask questions at an applicant conference with city staff on Tuesday, April 7, at 10 a.m. in the Winter Chambers, also located at 26 Court Street.