Heading Off Blight
Although New York City's foreclosure rate remains lower than those in many other major U.S. cities, the city still saw 15,000 foreclosure filings in 2007 --...
Although New York City's foreclosure rate remains lower than those in many other major U.S. cities, the city still saw 15,000 foreclosure filings in 2007 -- an increase from 7,000 in 2005 -- and expects to see another 20,000 this year. To prevent these vacant foreclosed properties from becoming a blight on neighborhoods, New York City plans to spend $24 million in federal financing to renovate and resell 115 foreclosed homes. Under the new program -- known as the Neighborhood Stabilization Program -- the city will not take ownership of the properties, but instead will subsidize their renovation through a third party, the nonprofit organization Restored Homes. The organization will purchase a majority of the 115 properties, hold title to the properties during the renovations and then sell them at prices affordable to families making roughly $80,000 to $90,000 a year. Funding is targeted to areas of greatest need, including neighborhoods with the highest number of foreclosures, the greatest number of high-cost loans and areas identified as likely to face a significant rise in the rate of home foreclosures. The program is being administered through a partnership between the city's Department of Housing Preservation and Development, the Center for NYC Neighborhoods, and Restored Homes, and will be supported by an additional $32 million in private financing -- money that will be paid back upon the buildings' sale to income-qualified homeowners. The city has already seen the purchase of four empty homes -- two on Staten Island, one in the Bronx and one in Queens -- and renovations are scheduled to begin by this spring. A similar federal program, called First Look, is also expected to begin this spring in Minneapolis and Saint Paul. It will allow the Twin Cities the opportunity to acquire foreclosed properties and possibly rehabilitate them before they hit the open market. For more programs, check out Idea Center's abbreviated guide to various foreclosure programs.
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