In an attempt to help neighborhoods hit hardest by foreclosure, three South Hampton Roads cities will receive more than $4.5 million in federal money to buy and rehabilitate vacant houses.
But because of constraints that the state placed on the money, several local leaders said Monday that the help may not reach the region's most distressed neighborhoods or save that many houses.
They said they are happy to receive the money, but it will help them turn around only a handful of foreclosed houses because the state placed a $25,000 cap on how much can be spent on renovations to each property.
"Really, the model is more geared toward a new suburban home where all you have to do is change the carpet and paint the walls," said Ron Williams, special assistant to Norfolk's city manager. "The more we got into the application, the more we saw that it was a very narrow focus on the type of property we could do here. We chose where we thought we could have some impact."
Gov. Timothy M. Kaine announced the state's plans Monday to distribute about $17.5 million in neighborhood stabilization money. There are about 16,000 foreclosed and vacant houses across Virginia, according to his office.
Nearly 3,800 homes in Norfolk, Portsmouth, Suffolk, Chesapeake and Virginia Beach are in foreclosure, according to RealtyTrac, an online foreclosure-monitoring service based in Irvine, Calif.
Virginia received the federal funds - a total of about $38 million - to address vacant and foreclosed housing last year. At the time, state leaders were told they could devise their own plans for how best to dole out the money to communities in need. So far, Virginia has distributed about two-thirds of the federal money. The state plans to accept another round of proposals from localities next month before it dispenses additional dollars.
While Norfolk's Olde Huntersville, Lindenwood and Park Place all met resident income and foreclosure criteria, the older homes there would have cost far more to rehabilitate than the $25,000 per house limit the state allows, Williams said. He said the average cost of renovations needed in those neighborhoods ranges from $40,000 to $60,000.
So instead, city officials decided to concentrate Norfolk's nearly $1.8 million share on rehabilitating and selling a dozen houses in Fairmount Park and Ballentine Place because they had a better chance of success there, according to a report presented to the City Council earlier this year.
Suffolk leaders said they plan to spend their $971,000 to purchase foreclosed properties along Oak and Wilson streets downtown.
Portsmouth will receive $2 million for similar work in Prentis Park, Cradock and Westhaven Park.
Westhaven Park - a quiet, stable neighborhood that rarely gets the redevelopment attention devoted to other areas - surprised officials when a section of it met guidelines that required a foreclosure rate of 10 percent, said Kathy Warren, development director for the Portsmouth Redevelopment and Housing Authority.
The city in February identified a handful of vacant homes there that it will now try to purchase and sell to new homeowners.
"When you have these properties sit vacant, it just adds to the decline of a neighborhood," Warren said. "If we can get people back in the home, where they're taking a stake in the community, we've achieved our goal."
The empty houses, most of which are owned by banks, will be purchased at a sales price lower than the assessed value, fixed up and sold to low- and moderate-income families in accordance with the federal program.
Chesapeake and Virginia Beach have not yet applied for neighborhood stabilization funding, but officials in both cities said they plan to ask for money during the next round of funding July 1.
Chesapeake plans to ask for $2 million to focus on areas of South Norfolk and the upper Western Branch, said Alisa Winston, the city's housing program coordinator.
The Virginia Beach Community Development Corporation, a nonprofit agency that works to provide low- to moderate-income housing, plans to apply for $1.5 million in aid in July, executive director Mary Kay Horoszewski said. She said she hopes the money will help with the rehab and sale of at least a half-dozen houses.
"That's not a lot, but it's better than nothing," she said.
Kaine also announced Monday that $2 million will go to the city of Hampton and $700,000 to Newport News.
Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com
Delicious
Digg
Reddit
Facebook
Google
Yahoo
Re: jreid8231
Appreciate your frustration. However, there is at least one guy up there whom, imho, has always been the real deal, would have been a refreshing change as Prez & is in there fighting in Congress even now for the right reasons. ('Course, he gets vilified by the media & the mainstreamers 'cause he has the audacity to do things strictly by the Constitution. They hate him because they're scared of him.)
Ron Paul is the Constitutionalist the Left hates & many phony conservatives wish they had the guts to be.
Not that it really should matter who the Prez is. Had we an honest Congress doing their Constitutional duty, they'd pretty much keep things in line & the Prez would be limited to doing what the Constitution allows him instead of micromanaging & ruining the whole show as BHO is currently doing.
Yeah, let's get our House & Senate straight by sending only those with genuine reverence for the Constitution (Party be damned) & we'll ALL be better off.
stimulus
What a friggin joke, here we go with bailing out the ocean with a thimble. This president is no different than any other politician, make great campaign promises and then don't produce squat. Stop helping the people that got us in this mess in the first place and actually do more for the people that are standing on the side of the road with signs pleading for food and shelter, that will be us all if something does not happen soon. Government cant agree with the simple things among themselves how are they supposed to run something as complicated as health care or run a car company. Go with gov health care and see how much worse it gets when you have to be approved by a 10 panel medical board for a vital surgery or even the simplest of procedures. There are too many good-ol boys in Washington, that is where we need to start doing the house cleaning. The elected officials of old had regular jobs to go to,look at what it has come to now. Every one of them have a hidden agenda or their pet peeves.
SPEND, SPEND, SPEND .....All AT A COST.....JOBS COME FIRST
Let's see.....Mr. Obama plans to add 600,000 jobs, but he failed to tell you how long it would take. The first 100 days he says they added 150,000 jobs but in those same 3 months we lost about 1,200,000 jobs. Even if he meets his 600,000 level with all this spending at a cost to the taxpayer, there will still be a loss of 450,000 jobs.. You do the math. Another politician with false hopes and no plan, just spend, spend, spend. Nothing more than big liberal government juggling the numbers and thinking spending more and more of your money will solve the problem. In the end higher taxes to pay for it all, higher unemployment and inflation will over take Mr. Obama and be his downfall.
can't fix up much with $25,000
Is there any way that some of that money can be used toward fix-ups of historic buildings?
I agree
It's a good plan. I'm glad the government in taking care of it's people. Because of the private sector greed. Our economy is the way it is. Thanks President OBAMA. Glad I voted for you.
It's not the government's job
It's not the government's job to take care of "its" people. We do not belong to the government: the government belongs to us, ostensibly. Its purpose is not to provide us with things, but to protect and defend an environment in which we can take care of ourselves without fear of force or confiscation. Exactly the opposite is happening now, all in the name of "taking care of people."
If you want a government that will take care of you, go to Cuba, China, North Korea or Venezuela.
It was, in fact, your dear president and his friends at ACORN who started this mess by pressuring and threatening banks to give loans to people who did not qualify, back in 1994. This mess is Obama's legacy from his days as a community organizer.
Efficient At Two Things
The federal, state and local governments are efficient at only two things and that is dreaming up new taxes and collecting taxes. They rarely look for ways to cut expenses or spend it wisely. The government is already planning to tax your health benefits or life insurance if your employer helps pay for them. When the huge tax increases that will be coming in the next year or so take effect taxpayers will realize that they are receiving the CHANGE they voted for.
new york city
Ethan if that is the case then I should be living there, lol. Can't possibly make out that good on the cheap in HR ...
I feel your pain
JReid . . . I feel your pain. Write your local, state and federal representatives and express your frustration and that you will no longer support them. I voice my frustration (and kudos) via email. Look at a third party. I did in the primaries and I did last November. D.C. and Richmond are buying votes through programs such as this topic and the attitude that "the government will take care of me" is strengthening throughout the ignorant (of the function of government) and misinformed population of this country.
$25,000
The only reason $25,000 isn't much is because the government is spending it. I replaced half my floors, my kitchen cabinets, some bathroom fixtures, and a couple of major appliances with a $5,000 home equity loan.
NOT WORKING
Is there anyone out there that realizes that this Stimulus Package isn't working the way it was "advertised"?
I'm all for giving this plan a "chance" to evolve but there's no LONG range plan; that should scare everyone out there.
We keep hearing about the unemployment numbers going up yet this Administration is spinning the heck out of the numbers.
Folks...........we have some major league problems here and there's no one smart enough in DC to figure it out.
Housing issues? This is just the beginning of major problems to come.
imagine
What could you do for your home with $25,000? Obama is giving a lousy $1,500 dollar tax credit to do one energy efficient upgrade to an existing home. Imagine the spending and home maintenance or additions people would be doing with a $25,000 tax credit.
Imagine, people with mortgages that are up to date, credit cards at reasonable levels and paid timely, in their homes for the long haul, and a little bit of incentive to invest in that home. But no, what do they get in this entire stimulus????
Oh yeah, they get to pay for everyone else's greed, mismanagement, and irresponsibility.
It's very important that
It's very important that everyone in the USA is a debt slave for 30 years to a house. There are constantly sob stories in the media of people loosing their homes, but if you look at the numbers the people have taken out loans against their home for massive amounts and used it to cover debt or buy stuff. Americans have been fueling their lifestyles with debt.
Norfolk could tear those
Norfolk could tear those homes down, build McMansions, and nobody would buy it. Why? Because no matter how nice you make it, you still have gang bangers and crackheads for neighbors.
$25k per house is already bad enough - they are just going to be occupied by Section 8 tenants who will destroy it. Why throw any more money down the rabbit hole?
Keep rehabs in the private sector.
I saw what the criteria was for the government to buy a bank owned property. They don't factor in holding costs, mortgage payments, liability, and buyers discount, or real estate agent costs. It's a horrible idea to let the government do this. What if the house doesn't sell? The idea of these funds is to leverage them with bank loans to buy more property. So now the city will be on the hook for a bank loan too. Then there comes the seasoning issue for a new mortgage. 90 days of seasoning after purchasing a property before they can resell it. Let investors do this, there is a reason they have to buy so low. That's to make a profit. I'll be selling houses to the city all day long if they are going to pay such outrageous prices. I can't wait.
Unbelievable
Keep voting for these clowns people. You get the government that you deserve. Great; our taxes are being used to fix up bank-owned property for someone else to live who otherwise could not handle the responsibility of home-ownership in the first place. Unbelievable.
Who chooses which house to purchase? Does this person(s) have any experience in the real estate and rehab business? This is scary. How about using the money to raze dilapidated properties and reselling the vacant lots to developers and let the market dictate the development. The money can also be used to make sure the foreclosed properties are structually sound and let the new owners do the painting, replacing floor covers, etc.
It's time for governent to get back to core functions.
It's NOT the governments (local/state/federal) function to be in the real estate business, car business or any other business. Politicians are abusing our tax money and raising our taxes higher to fund their projects and convert us to a socialist nation. It's time to use our votes to stop this transition. It's time to vote out every incumbent at every election cycle until we have stopped the nepotism and invoked term limits on every elected and appointed seat of public trust. Our forefathers engineered our government to be made of "CITIZEN politicians" NOT "CAREER politicians". Let's solve the problems and get rid of these clowns.
In addition to who knows how many...
Norfolk asssistant city managers, there is at least one special assistant to the city manager?
1 concern 1 idea
Great now the Government is in the Auto industry and Real Estate.
I was suggest to stay well below the $25,000 cap. Utilize the overcrowded jails and use inmate work crews to remodel the house. It saves the city money, and rehabiltates the inmates while teaching them a skill too.
Let's break down these idiots plan
"Governor Timothy M. Kaine today announced the award of $17.5 million in Neighborhood Stabilization Funding to localities for purchasing and rehabilitating foreclosed homes so that they can be resold to low-to-moderate income families."
"Of the $17.5 million, $15 million is targeted to 29 high-need neighborhoods, and will result in the rehabilitation of approximately 136 homes at a discount price."
In other words, nothing for middle income and everything for low-income families and most of these high-need neighborhoods are in low-income neighborhoods. 1.5M -Habitat for Humanity, 2M - Hampton, 1.7M Norfolk, 2M - Portsmouth, 2M - Richmond, .9M - Suffolk. Sorry Chesapeake and VB, you get nothing. How in the world does any administration whether it's Obama or Kaine expect that this will help the economy. Allowing citizens to own a home that they couldn't afford to begin with is what got this country into this downward spiral in our economy. They never learn, idiots!