It’s a sign of the particularly tough financial times: bulldozers will be kept busy as some foreclosed houses will be razed throughout the country.
Why? In some cases the owners didn’t have enough money to keep up maintenance, so it’d simply cost too much to bring them up to code and resell them. In other cases, owners took what they could from the actual home. In yet other cases, former owners’ anger towards the bank translated into their either taking things or damaging the home so it couldn’t be sold.
But it may be coming soon to a city near you: the sight of a foreclosed home coming down. CNN reports:
Some reports echo or explain CNN’s piece. A few of them:
—Iowa:
Ninety Des Moines homes will be renovated or razed to make way for new housing as part of a program using federal money to improve areas affected by foreclosures.
Des Moines received a $3.9 million grant to address the problem in designated neighborhoods.
The money comes from the Neighborhood Stabilization Program approved by Congress in August. Nationally, a total of $3.92 billion was set aside for the federal program. Iowa was allocated $21 million and the state awarded the $3.9 million to Des Moines on April 1.
The program is intended to limit the negative impact of a foreclosure on a neighborhood.
“The overall idea is to rehab properties that are still strong homes, still structurally sound, but just in need of some attention,” said David Dunn, Des Moines senior city planner. “Those properties that are too far along, the idea is to get rid of those, to demolish them so they are no longer dragging down the neighborhood, and then to rebuild.”
“I don’t think it’s my responsibility to secure his property,” said Lorrine Brown, 50. “If you purchase the property, you should be responsible.”
Once the county forecloses — the process is underway — it will take at least two years before the city can raze the home, assuming someone doesn’t buy it at auction, Stemple said.
The city had 800 homes on its demolition list two years ago and an annual budget to raze 200 per year, Stemple said.
“We need the help of everybody, residents included, to help bring these neighborhoods back,” he said.
His department is reassessing its blighted home inventory this month.
–There are concerns, too, that some abandoned foreclosed homes are becoming crime centers:
Foreclosures in Queens are leaving behind abandoned homes that become prime targets for thieves and havens for squatters, a new report shows.
The only Queens areas where crime rose between 2006 and 2008 – Jackson Heights, Kew Gardens/Woodhaven, Jamaica/Hollis and Rockaway/Broad Channel – had high foreclosure rates, says the study unveiled Thursday by the advocacy group ACORN.
Crime dropped in just two high-foreclosure neighborhoods, South Ozone Park and Queens Village. But it dipped in all eight low-foreclosure areas, including Astoria, Flushing and Forest Hills.
“It is common sense that foreclosure and crime go together,” said New York State ACORN President Pat Boone. “Thousands of families across New York have lost their homes to foreclosure. In turn, their communities have lost neighbors who care for their homes and help keep an eye on everyone’s safety.”
—Foreclosed homes are also a problem in Indiana:
FRANKLIN, Ind. — More than 300 homes in the Johnson County community of Franklin are either abandoned or foreclosed, not including homes that were damaged by flooding last year.
The homes are primarily those for which the owners received loans for but couldn’t afford, 6News’ Renee Jameson reported.
With job losses on the increase, Mayor Fred Paris said the problem is apparently worsening, but he has developed a plan to help.
—A New York Times piece provided this background:
Last summer, Congress appropriated $3.9 billion in emergency funds for cities to acquire and rehab foreclosed properties. (An additional $2 billion will be available under the recently enacted economic-stimulus package.) The legislation was labeled the Neighborhood Stabilization Program, but Cleveland and a handful of other cities had to lobby hard to convince Congress that “stabilization” in their cities meant tearing down houses — not renovating them.
Last month, Cleveland said it planned to use more than half of its $25.5 million allotment to raze 1,700 houses. This presents an opportunity to reimagine the city, to erase the obsolete and provide a space for the new. (There’s little money now to build, so imagine is the operative word.) Cuyahoga County is also establishing a land bank, a public entity that can acquire distressed properties and hold on to the land until improved economic times allow for redevelopment. The county hopes to persuade banks to unload their distressed properties, which the land bank would then raze, as well as give up some foreclosed properties in the suburbs, which the county could eventually renovate and sell.
Other cities — including Minneapolis, Youngstown, Detroit and Cincinnati — have put aside at least a third of their neighborhood-stabilization funds for demolition. “As properties stay vacant for longer periods of time,” says Joe Schilling, a founder of the National Vacant Properties Campaign, “it’s inevitable that even in some of the fast-growing communities, they’ll have to look at demolition.” Phoenix, for instance, has set aside a quarter of its grant money to tear down abandoned homes.
–Some foreclosed homes are simply too trashed to be sold, CNN reports:
The economy in southern New Hampshire is not by any means among the worst in the nation. Still, according to city records, there are 29 foreclosed homes on the books in Nashua — many of which are in deplorable condition.
This house is not livable right now,” Nelson Ortega, the city’s chief building code inspector, told CNN as he stood in front of a boarded-up single-family home on a residential street in Nashua.
The foundation of the house was fractured, Ortega said, and there were cracks and fissures in many of the supporting beams. At the side entrance to the house were broken windows, garbage and peeling paint.
In 2006, Ortega said, the property sold for $200,000. It’s anyone’s guess, he said, what price the home might bring now, if it ever sold.
That this foreclosed home might not ever sell was not news to a researcher who lives nearby.
“About a third of all of the foreclosed properties nationwide have been so damaged, either by the previous owners or by criminal gangs coming in after the foreclosure, that they no longer qualify for standard mortgage financing,” Thomas Popik told CNN. “So there is going to be all kinds of government programs to help, but if they don’t qualify for standard mortgage financing, there’s no one to buy these properties.”
Popik says responses from thousands of real estate agents nationwide to the questionnaires he sends out quarterly indicate that badly damaged foreclosed homes — so-called “distressed” properties in real estate jargon — are a much bigger element of the national housing picture than officials in Washington have acknowledged.
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Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.