Skip to content

Local officials in US introducing initiatives to stem growth of foreclosure blight

One reason is that boarded up buildings and a general unkept look pulls down the price of other properties and encourages crime. There is also concern about the growing number of speculators making money out of the misery and a rise in fraud.

In New Bedford, Massachusetts, for example, government officials and housing advocates have launches a programme to reclaim foreclosed properties and turn them into affordable housing.

Citizen's Housing and Planning Association, a non-profit housing agency is operating a clearinghouse to help community organizations purchase foreclosed homes and upgrade them for low and moderate income families.

'Our goal is to stabilize neighborhoods affected by this crisis by reducing vacant and abandoned units and by providing property tax revenues to municipalities, who need it now more than ever,' said Aaron Gornstein, executive director.

'We are also aiming to ensure that the sales of these properties are done in a sustainable manner that does not set the stage for a future cycle of foreclosure or property decline,' he added.

The programme, he said, will try to keep the properties out of the hands of speculators, who might be tempted to do limited renovations or keep homes vacant while waiting for the market to recover.

CHAPA will liase between banks and other lenders and local housing organizations and municipal agencies in a bid to reduce the number of foreclosures which have more than tripled since 2006.

The community agencies can tap into $54 million in federal foreclosure aid to buy the properties, or other public development funds. The organizations will either rent out or sell the homes to qualified people at affordable prices.

A prime example of the kind of activity they want to stamp out is apartments in New Bedford's historic waterfront that were purchased, renovated, and refinanced at the height of the market by an investor who left with the profits. The apartments have been empty for more than a year, boarded up and plagued by illegal activity.

'It is going to get rid of a lot of these abandoned houses and put people into them. You will get more people living here, more people fixing up their homes and it will be good for the local economy,' said Joe Pereira, a local window and kitchen businessman.