LANCASTER COMING TO THE RESCUE ANTELOPE VALLEY: CITY TAKES OVER VACANT PROPERTIES TO PREVENT BLIGHT, AID BUYERS.
LANCASTER -- Seeking to strengthen neighborhoods hit hard by the foreclosure crisis, the city of Lancaster is snatching up vacant houses to fix up and sell to families.
The program aims to reclaim abandoned properties to prevent blight, crime and a downward spiral in home values and provide affordable housing to qualifying low- and moderate-income buyers.
"We are doing outreach to turn around a lot of neighborhoods and create better housing, and provide housing to families that might not otherwise be able to own a home," said Elizabeth Brubaker, Lancaster's housing and neighborhood revitalization director.
The program is similar to one contained in a bill approved by the U.S. House this week that would grant some $4 billion to cities across the country to buy and fix up foreclosed homes.
But Lancaster officials have already set aside enough in city funds to start their own program.
The Lancaster Redevelopment Agency approved the Neighborhood Foreclosure Preservation Home Ownership Program in August 2007. Since May, the agency has approved spending more than $4.1million to acquire 41 homes.
The city now has title to six homes, and will soon award contracts to renovate three.
Foreclosures and default notices in the region are on track to double last year's rate, according to figures compiled by the Greater Antelope Valley Economic Alliance.
Through the end of June, Lancaster and Palmdale recorded 3,518 foreclosures -- already more than the 2,382 recorded in all of 2007. More than 6,000 default notices were issued to homeowners through June 2008, compared with 6,372 notices in all of 2007.
Local Realtors estimate there are 2,200 vacant homes in the Antelope Valley.
Statewide, foreclosures soared in the second quarter to the highest level in at least 20 years, and the number of default notices -- an indication of possible future foreclosures -- also jumped.
More than 63,000 homes in California were lost to foreclosure between April and June, according to DataQuick Information Systems, a real-estate tracking firm.
One of the homes purchased by Lancaster is on Foxton Avenue near Piute Middle School, where residents said they had lived in a quiet, nice neighborhood until the foreclosure crisis hit.
Now several homes have been lost to foreclosure and have remained vacant for too long, falling victim to vandals and squatters.
Neighbor Melissa Mudd, 36, recalled a recent incident in which sheriff's deputies surrounded a vacant house where people had broken in.
"It would be nice to see families and kids living there instead of it being boarded up and vandalized," Mudd said.
Eric Parry, 25, echoed Mudd's sentiments, noting the many foreclosed and for-sale homes in the neighborhood.
"It's a crisis right now. It (the city's program) will benefit families," Parry said.
Other cities around the country have been pursuing similar programs to address neighborhood decay triggered by the foreclosure crisis.
In Minneapolis, where foreclosures doubled in a year to 3,000 in 2007, the city set up a fund to buy and rehabilitate more than 70 foreclosed homes to draw in homeowners. The city also offered small, forgivable loans to help with down payments in targeted neighborhoods.
In need of repair
In Providence, R.I., Mayor David Cicilline said the city six months ago began offering no-interest loans to families to buy foreclosed homes that needed repairs.
"Some of the foreclosures have been the subject of vandalism -- boilers and pipes were stolen," Cicilline said. "Purchasers were ready to close but found out they needed repairs and didn't have the $5,000 or $6,000 to do them."
Los Angeles County does not have a program to buy foreclosed homes but officials said they are now interested in starting one to capture some funds from the congressional bill if it becomes law.
"We are waiting for more specific information and see what our role will be," said Lois Starr, acting director of housing development and preservation in the Los Angeles County Community Development Commission.
"If we are designated to get money, we will start a program and the information will come out."
Officials with the Los Angeles Housing Department said they are working with the city's Housing Authority and Community Redevelopment Agency on a plan to use the federal funding to acquire foreclosed properties and stabilize neighborhoods with high foreclosure rates.
Best for neighborhood
Housing Department General Manager Mercedes Marquez said the program could involve rehabilitating houses and selling them to families, or renting clusters of homes in project areas.
"It could be acquiring a series of homes, and if the best thing to do is build multifamily housing, we could do that," Marquez said. "It's what is the best thing to do for that neighborhood."
State officials also are stepping in to assist communities reeling from rising foreclosures. Gov. Arnold Schwarzenegger this week launched a program that offers low-interest loans to first-time homebuyers who purchase foreclosed homes in areas with the highest foreclosure rates.
In Los Angeles County, those communities are Lancaster and Palmdale, as well as the Baldwin Park/Crenshaw and Hyde Park areas of Los Angeles.
He has also announced $69.5 million in permanent low-interest loans to jump-start 14 affordable multifamily projects throughout the state.
More cities may follow
Ken Wade, chief executive officer with Washington, D.C.-based NeighborWorks America, said there will likely be more cities moving in Lancaster's direction.
"Cities come at this for two reasons. One is they are concerned about the impact of abandoned properties on local communities," said Wade, whose nonprofit organization was created by Congress in 1978 to provide financial support, technical assistance, and training to affordable-housing community groups.
"Oftentimes, they have a negative effect, being crime magnets and detracting from the overall quality of the neighborhood. (Cities) also have this other challenge of wanting to ensure there are affordable housing opportunities."
The homes being acquired by Lancaster are in five of 11 neighborhoods the city is focusing on -- based on crime, income levels, rental and Section 8 housing, and code violations -- as part of an effort to revitalize distressed areas.
The city has been paying between $80,000 and $110,000 a home, and will sell them for the cost to buy and rehabilitate them. In exchange, buyers must attend financial training and keep their homes up to code.
Depending on the lender, the city could also provide financial help to the homebuyer in the form of down-payment or closing-cost assistance or buying down the interest.
"We don't want to put them in a position where they can't afford to put food on the table," Brubaker said.
The renovation work on city-acquired properties will include making homes more environmentally friendly. That means tankless water heaters, less sod, and more drought- tolerant landscaping, Brubaker said.
"And it creates jobs for subcontractors and contractors, increases sales tax through contractors buying supplies," Brubaker said. "It's a win-win-win for everybody."
Officials with United Way of Greater Los Angeles praised Lancaster's program.
United Way has its own program that helps first-time homebuyers jump-start their savings and earn matched funding.
"I think that's intelligent as far as screening people that move into low-income houses," said David Menchaca, United Way regional director for the Antelope and Santa Clarita valleys.
"To make sure they are part of a group that's working to create pathways out of poverty."
BY THE NUMBERS
Source: Greater Antelope Valley Economic Alliance, Daily News research