Around Tampa Bay, local governments are preparing to spend millions in federal dollars to redevelop homes that have been abandoned or foreclosed upon by mortgage companies. The money, part of more than a half-billion dollars sent to Florida under the Housing and Economic Recovery Act, is some of the most direct help Washington has sent to deal with the economic crisis. Now the key will be for local governments to spend the money prudently to stem the blight created by a rising number of unoccupied houses.
In Tampa on Thursday, the City Council approved Mayor Pam Iorio's plans to spend $13.6-million to buy 110 homes that have been abandoned or foreclosed, primarily in Sulphur Springs. But City Council members raised concerns about plans to tear down 40 of the homes and build new ones, questioning whether the money could be better spent on rehabbing homes. That's worth a closer look, but many of those buildings are not worth renovating.
In Pasco County, officials are reworking plans for more than $19-million that will be largely spent on buying and rehabilitating homes. And in St. Petersburg today, the City Council is expected to offer a ray of hope for a pair of economically challenged neighborhoods. The council will vote on its plan for spending $9.5-million of the $70-million in federal funds flowing to the Tampa Bay area to stabilize neighborhoods with high foreclosure rates. The money won't directly help homeowners who are under threat of losing their homes, but it has the potential to help stabilize home values in some vulnerable neighborhoods.
The U.S. Department of Housing and Urban Development has largely prescribed how and where the money can be used. Starting in January in St. Petersburg, the city will purchase bank-owned homes that have been vacant for at least 90 days for an average of no more than 85 percent of their market value. The purchases must be in neighborhoods where the majority of households collect less than 120 percent of the area median income — in St. Petersburg that's $67,800 for a family of four. The city will then make repairs, if necessary, and sell the homes to low- and middle-income residents who qualify for local homeowner assistance programs. One quarter of the money will be set aside for properties that will be sold to nonprofit landlords who will rehabilitate the properties as affordable rentals. And in other cases, homes that would cost too much to rehabilitate will be demolished.
All told, St. Petersburg officials expect the project could touch about 90 properties in Midtown and Childs Park neighborhoods, the two areas of the city hit hardest by foreclosures and the mortgage crisis. A federal analysis shows one area of Midtown has a 16 percent vacancy rate for residential property and that another 15 percent of properties are susceptible to foreclosure in the next 18 months. The idea is that stabilizing property values in that area, by filling empty homes, should help stem the loss in property values that has caused problems for homeowners who find they can't shed high-interest loans for cheaper ones because their homes are worth too little.
There's much work to be done. The city's housing department will identify the vacant properties, negotiate the purchases and determine what repairs to make. The city will hire outside contractors for reasonable prices to do the work. Then the city will market the homes to qualified buyers through homeowner assistance programs. Each step in St. Petersburg and throughout the Tampa Bay area will require fiscal discipline and common sense. The goal is to not hold any property for more than for a few months at most. In a time when financial problems seem to be constantly compounding, this is one federal program that ought to produce concrete results and directly benefit local neighborhoods.