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Economy and Business


An alternative to the demo squad
Program helps distressed homeowners buy back homes, keeping people in foreclosed homes rather than tearing them down
by WKSU's KEVIN NIEDERMIER


Reporter
Kevin Niedermier
 
A backhoe starts tearing into one of the more than 50 apartment buildings and houses in a 2 block section of East Cleveland. The city hopes the Cuyahoga County Land Bank project will lead to productive use of the land.
Courtesy of Kevin Niedermier
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People are pushing land banks as one solution to the foreclosure crisis. Land banks buy abandoned homes, tear them down and find someone to redevelop the land for new uses.  But another approach tries to keep people in their homes and avoid foreclosures in the first place.  WKSU’s Kevin Niedermier reports.

 

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Nearly an entire street once filled with vacant, dilapidated buildings has been cleared.


Nearly an entire street once filled with vacant, dilapidated buildings has been cleared.

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A backhoe tears into one of the more than 50 abandoned apartment buildings and houses.  The Cuyahoga County Land Bank is spending $900,000  to try to transform the nearly 2 blocks stretch into something new. Beverly Krim watches the East Cleveland demolition begin.  She owns and lives in a well kept apartment building next to the dilapidated structures. Her red brick home, with its trimmed front lawn and neatly painted window frames, is a sharp contrast to the next door apartment building just a few feet away. The windows and door are busted out, and overgrown weeds and bushes that choke the trash filled lawn. This building looks the same as the rest of the abandoned apartments that line both sides of the rest of the street. Krim has lived here since 1966, and says she’s seen a lot of change in the neighborhood

 “Well, the changes have been for the worse. And I’m glad they’re being removed, all of the abandoned buildings and all of the debris and everything because it was a haven for dumping, a place for animals to come and live. And it’s been very, very hard to get tenants to come in and rent the property.”

Cuyahoga’s land bank is a model for about 40 others across the state. It matches funds from penalties and interest on delinquent property taxes with grants and other government funds to buy and renovate or demolish deteriorating properties. More than a thousand properties have gone into the bank in the program’s first three years. About 130 have been rehabbed and 175 are being evaluated…the rest have been torn down. Churches and businesses have bought some of the cleared properties for parking lots or expansions.

But in Massachusetts, a non-profit financial group is trying to keep people in their homes by avoiding foreclosure.  Elyse Cherry is CEO of Boston Community Capital has been helping provide affordable housing for 27 years. She says in 2009 the organization started the Sun Initiative with donations from individuals and foundations, and some state and federal government help…..

 “What we’ve been doing is buying up loans, or mostly the real property often post foreclosure at steeply discounted prices, and then turning around and selling that property right back to the owner who lived there. So the idea is to keep homeowners in their homes to maintain the stability of the family and the community.”

Cherry says her program would not work in all neighborhoods. In places like the swath of decay in East Cleveland, demolition is the only realistic alternative.  She acknowledges that the Sun Initiative only works for ten-to-twenty percent of low to moderate income people in the Boston area residents facing foreclosure. But the steep drop in home values has helped keep 135 Massachusetts families in their homes so far, and Cherry hopes to help about two-thousand more in the next three-to-four years. She says that will stabilize neighborhoods, property values and families.

 “You have a family that’s uprooted which means the kids can’t attend the same school, parents, if their working, have to figure out different routes to work. The question of where people live at all gets to be an issue because landlords now look at credit scores, and if you’re been through foreclosure you don’t have very good credit. So people end up bunking with friends and family or become homeless.  That obviously has a terrible impact today on the family.”

Mike and Monica Bassila of suburban Boston nearly lost their home of 30 years. In 2008 they got behind on their bills and missed a payment on their $330,000 mortgage. They filed for bankruptcy, and foreclosure proceedings began. Meanwhile, Mike had a heart attack, and they were waiting to be evicted. Monica says Boston Community Capital changed things earlier this year.

 “They bought the house from Fannie Mae and it just started happening. You go from not knowing where you’re going to go, boxes packed, ready to roll if they come to move you out of the house, you got no place to go, and my husband was in the hospital, it was just devastating. And then Boston Community Capital bought the house back, it’s an agreement Fannie Mae makes that if you sell the house back to the previous owner you have to rent for 6 months to see if we are actually, and we could afford the mortgage that Boston Community Capital gave us. And now my husband is retired on disability and we can still afford the house.”

Instead of paying $2600 a month, the Bassilas are now paying 1800.  But there is a caveat a program like Boston Capital’s to work. Tom Fitzpatrick is a community development economist at Cleveland’s Federal Reserve Bank. He says homeowner, like the Bassilas, must be committed to staying in the home long-term.

 “If they continue to treat it like a owner occupied home, they’re keeping up with the maintenance, there not letting anything go to seed, then it’s a good thing for the neighborhood, again, you get that stability, it depends on how you treat it.”

But, especially here in the Midwest, Fitzpatrick says old housing stock and population decline change the dynamics. 

“Even after foreclosure isn’t the issue it is today, vacancy and abandonment will continue to be an issue. The fact that we don’t have a constantly growing population to reoccupy it, and yeah, along with the age and everything that comes with that, the higher carrying costs, the one bathroom for the entire house, the small kitchens the small closets, those sorts of things.”

So back in East Cleveland, demolition crews are leveling the abandoned 100 year old houses and apartment buildings that fill almost two blocks.  Mayor Gary Norton says the city could only tear down a few houses until now…..

 “We just want to provide relief for out residents. But with infusion of capital today, we are able to get to these large apartment buildings. And frankly, these things have been havens for crime, and without the land bank, without Cuyahoga County this would not be possible.” 

East Cleveland recently lost its only hospital. Norton hopes a developer who can’t afford to build in Cleveland’s nearby University Circle neighborhood will use his space for a medical, educational or cultural facility. And at this point, using the land bank program to reclaim large chunks of devastated properties remains one of Norton’s best hopes for  changing the fortunes of his city.


Related Links & Resources
Cuyahoga County Land Bank

Boston Community Capital

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