Clear70° WeatherClear70° Weather

Pasco County spends millions repairing foreclosures

PORT RICHEY — Anthony LaGrutta remembers when the house two doors down on Gray Fox Lane belonged to another retiree.

"They were all old people like me," said LaGrutta, 84, "so they took care of things."

But the elderly neighbor died, investors took over, and LaGrutta watched renters come and go until late last year. That's when the Regency Park house fell into a bank's hands — yet another run-down home caught up in the foreclosure crisis.

Then in June, a new investor bought the home from the bank for $39,900 and put nearly $30,000 worth of work into it: new roof, floors, doors, windows and appliances. New appraised value? $70,000.

But the investor behind what is now one of the nicest houses on the block is a little different from the ones in years past:

It's Pasco County.

• • •

Back in March, Pasco County received $19.5 million in federal Neighborhood Stabilization Program money — the 17th highest allocation in the nation — to help deal with the record number of foreclosures.

County officials put together a spending plan, with most of the federal money going toward an existing program that funds not-for-profit agencies to buy and fix up foreclosed homes — and then try to sell them.

Unlike many other local governments, which have struggled to figure out how to spend the money, Pasco already has plowed through more than half of its funds.

So far, the county has bought, or has contracts to buy, more than 170 foreclosed homes.

Most of those houses are in west Pasco, including the one on Gray Fox Lane.

The total price tag for acquisitions so far is around $9.7 million, and the cost of hiring contractors to make repairs is about $4.5 million.

• • •

As the newly renovated homes have begun coming on line, about a half-dozen have sold, most of them close to the after-rehab appraised value, according to a report from the county.

One foreclosed home in Gulf Highlands, for instance, was worth about $45,000 when the county picked it up in April for $38,000.

County officials approved paying $41,000 to a contractor to repair the home, improvements that resulted in a new appraised value of $76,000.

The house sold last month for $77,000 — several thousand dollars less than the money the county put into it.

But the program isn't supposed to be a moneymaking venture, said Gregory Schwartz, president of Tampa Bay Community Development Corp., the Clearwater-based nonprofit agency handling the vast majority of the deals for Pasco County.

He said the premise is to at least fix up the houses so that they're not bringing down the rest of the neighborhood.

"My marching order is, 'Get out there and clean it up right now,' " he said.

Greg Armstrong, a New Port Richey real estate agent, had pushed the county to put more of the federal money toward down payment assistance loans. He and other Realtors wanted more emphasis on getting people into the houses. But so far, that program has not been much of a success.

Though $6.5 million was budgeted for those loans, only $550,000 has gone out so far to help five home buyers purchase and repair the homes. Officials say the problem lies in banks' unwillingness to provide loans on homes that need repairs.

Now that the overall program has had some time to work, Armstrong said he worries that the repaired homes are overpriced for their neighborhoods.

He said the federal rules that come with the money require too many improvements, including outfitting homes near Little Road with hurricane windows and replacing otherwise decent appliances.

But he credits the program with spurring private investors to jump into action. Many investors, seeing what the county has been doing, have been buying foreclosed homes, putting money into them and getting them on the market again.

With foreclosures moving more quickly, home prices in the area have been holding pretty steady over the last eight months — something he chalks up to the infusion of federal money.

"I'm thrilled and shocked it happened," he said.

• • •

The program works like this. The nonprofits, or their real estate agents, are constantly on the hunt for foreclosures. If they find ones where the rehab work isn't too significant, the deal can proceed.

Once the home is purchased, the repair work goes out to bid to a list of approved contractors. When the house sells to eligible buyers (they have to meet certain income requirements and attend county-sponsored homeownership classes), the nonprofit agencies get a $7,500 fee from the county.

The program is also providing a mini-stimulus project for the 10 or so contractors and their subs. The typical fix-up contract is around $30,000.

Wayne Allen Contractor, for instance, has picked up work on about five houses through the program. Vice president Rich Allen said the projects have meant work at a time when everything else is slow.

"It's definitely the 'trickle-down theory' at work," he said. "It's really the only thing going on now."

• • •

Over on Gray Fox Lane, the house that Pasco County bought and had repaired is hardly the only house that has needed work.

Scott and Cheri Harapat, who live next door, have seen one empty house on their street painted with graffiti.

Their neighborhood has its share of problems — run-down rentals, burglaries and speeding traffic — and, given high unemployment in the state, they fear the improved house next door will sit empty for a while longer.

But they said they were pleased that at least the place got fixed up.

"They did a nice job," said Scott. "They are trying to fix up the neighborhood."

Said Cheri: "I wish I had those windows."

Jodie Tillman can be reached at jtillman@sptimes.com or (727)869-6247.

Pasco County spends millions repairing foreclosures 11/21/09 [Last modified: Saturday, November 21, 2009 8:34pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...