Sacramento city officials gathered Monday around an abandoned, shopworn home in Oak Park to describe how they plan to use millions of dollars in federal stimulus money to transform foreclosed eyesores into gems.
The property on 34th Street is the first single-family home purchased by the Sacramento Housing and Redevelopment Agency on behalf of the city under the Sacramento Property Recycling Program.
The effort is funded by part of the $13.2 million the city of Sacramento received from federal legislation aimed at shoring up foreclosure-battered neighborhoods.
"If we can rehabilitate these homes and get buyers into them, it helps the whole neighborhood," said Chris Pahule, assistant director of SHRA.
He noted that the 34th Street house had been broken into previously, and that vacant houses "are a magnet for vandalism and crime."
The 34th Street property was once appraised for $60,000, but it was foreclosed upon by Wells Fargo Bank. SHRA subsequently purchased it for $38,000.
Renovation on the house will begin later this year. SHRA plans to put it on the market in early 2010.
SHRA has allocated $3 million of the city's $13.2 million in federal funding to the Property Recycling Program, which will be run in partnership with nonprofit and for-profit partners that will actually make the needed repairs.
The rest of the money is going to programs that make loans to developers who rehabilitate distressed single-family homes for sale and multi-family properties for rent to low-income tenants.
SHRA officials hope to rehabilitate 50 to 60 homes with the $3 million allocation. Proceeds from the sales will be plowed back into the program to buy additional houses.
Sacramento County received $18.6 million from the federal housing bailout bill, and through SHRA also will spend part of that money to buy and fix up foreclosed homes.
In addition to Oak Park, SHRA plans to target portions of Meadowview, North Highlands, Del Paso Heights, North Sacramento, south Sacramento and Galt.
SHRA is seeking an additional $20 million under the second version of the federal Neighborhood Stabilization Act. If it gets that money, the agency envisions rehabilitating more than 300 foreclosed properties throughout Sacramento County.
City Councilwoman Lauren Hammond, in attendance Monday, said she wants to see the bleeding stop in the Oak Park neighborhood, her entire district and countywide, and hopes the federal money will help.
She said there were 252 notices of default and 134 foreclosures in her district in the first quarter of this year alone. Last year, the county recorded 17,221 foreclosures, more than 7 percent of California's total.
"Just before the recession, we had gone from 85 percent rentals to 60 percent, with 40 percent homeowners (in Oak Park)," she said. "I was really hoping to reach a goal of 50-50, because homeowners tend to be more dedicated to taking care of their homes and property. ...
"And then (the recession) hit. Now, I'm hoping that this program will get us heading in the right direction again."
Right now, the house on 34th Street doesn't look like much. It needs painting, and the lawn is dead with bare patches. Inside, the floors and walls need work.
To illustrate its potential, SHRA officials on Monday showed off a nearby home renovated by a developer using a loan from the agency. That 950-square-foot home, with new carpet, gleaming features, a separate garage and a basement, is on the market for $86,000 and has a pending sale offer.
While one spruced-up home may not seem like much amid a sea of foreclosures, Sergio Barajas, West Coast community development manager with the National Community Stabilization Trust, a new national nonprofit working to fight foreclosure blight, said surgical rehabilitation of a relatively small number of houses can make a difference.
"When you look at a home like this, we look at the potential to stabilize the neighborhood as a whole, not just one home," he said.
Source Sac Bee
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