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By Monica Brady-Myerov (WBUR)
Massachusetts is creating a first-in-the-nation statewide clearinghouse of foreclosed properties. The goal is to rehab them quickly and then make them available for sale to low- and middle-income buyers. It's seen as a way to rid neighborhoods of blighted homes and help meet the need for more affordable housing.
Officials announced the program yesterday in a New Bedford neighborhood that's been hard hit by foreclosures.
A state housing worker is leading Gov. Deval Patrick and Congressman Barney Frank down two city blocks to get a first-hand look at how multiple foreclosures affect a neighborhood. New Bedford Mayor Scott Lang is with them. He points to a half-burned house with broken windows and says it highlights how difficult it is for a city to tear down blighted properties.
MAYOR SCOTT LANG: This house has to come down and it's gotta come down tomorrow.
But the owner is fighting the city over plans to demolish it.
Four more houses along Tallman Street are boarded up. They are among the houses that will be part of the new statewide clearinghouse, connecting banks that own foreclosed properties with organizations that create affordable housing around the state. Coordinating the clearinghouse will be the non-profit Citizens' Housing and Planning Association, or CHAPA. Aaron Gornstein, the executive director of CHAPA, explains the concept to the governor.
AARON GORNSTEIN: The basic idea is to get ahold of the properties early, get them purchased, stabilized, fix them up and back on the market.
Fifty community organizations around the state are qualified purchasers. Major lenders who own most of the foreclosed properties have agreed to give these organizations a first look at a foreclosure and allow them to buy in bulk. The money will come from the Federal Neighborhood Stabilization Fund, the stimulus package and other state sources.
Standing across the street from an abandoned boarded-up house, the chairman of the House Financial Services Committee, Congressman Barney Frank, defends the use of federal funds to rehabilitate foreclosures.
REP. BARNEY FRANK: There are complaints from people who say, 'Hey, I pay my mortgage. Why are various elements of the government — federal, state, local -- trying to help other people?' And the answer is these foreclosures don’t just hurt the person who lives there, the foreclosures hurt the whole neighborhood.
After the tour, a local business owner spoke to the lawmakers. Joe Pereira, who’s also a landlord in the neighborhood, says the value of his property has dropped because it’s next door to foreclosures.
JOE PEREIRA: Some of these properties are rundown, abandoned or vandalized. It is difficult to rent an apartment when the building next door or across the street is boarded up. I have a hard time keeping my buildings occupied.
Currently there are more than 12,000 foreclosed properties in the state. They won’t all go into the clearinghouse. But Gov. Patrick says the initiative is one option to turn some of this property into affordable housing.
GOV. DEVAL PATRICK: This project and this clearinghouse meets a need for affordable housing, a need for options for homeless families and a need for neighborhood stabilization here in New Bedford and all across the Commonwealth.
There have been similar pilot programs, but the Massachusetts Foreclosed Properties Initiative is the first statewide effort in the nation to revitalize foreclosed homes.
This program aired on March 17, 2009. The audio for this program is not available.
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