City to purchase 50 foreclosed homes - Stamford News - The Stamford Times.
STAMFORD -- Stamford will receive nearly $3 million in state grant money to buy bank-owned foreclosed properties in its most affected neighborhoods.
The state Department of Economic and Community Development (DECD) will disperse $25 million in Neighborhood Stabilization Program funds to seven Connecticut cities for the purpose of stabilizing neighborhoods that have been impacted by bank-owned foreclosures.
The funds will be used to finance the home acquisitions and to rehabilitate or demolish and develop the properties. Stamford will target the funds to the West Side, East Side and Cove neighborhoods for their high concentration of foreclosures, bank-owned property, properties in foreclosure court process and properties that have sub-prime mortgages.
So what should they do with the homes? I propose that they buy them,
rehabilitate them, and sell off the homes -- not the land, just the
homes -- as affordable housing. Keep the land, charge the owners of
the homes ground rent, in proportion to the assessed value of the
land. Since most of the value is in the land, not the buildings, their
mortgages will be relatively small. And the city will have a revenue
source -- ground rent, at, say, 5% of the true market value of the
land. Currently, the town is collecting 1.187% in property tax on land
and buildings ($16.96 millage rate, on a value which represents 70% of
the 10/1/07 real market value). Under the scenario I propose, the town
would collect 5% on the land value, and 1.187% on the building, and the
home buyer would only need to borrow enough to pay for the building
itself, at its rather depreciated value, after rehabilitation.
A win-win-win situation ... except maybe for the banks. But the federal government is looking out for their interests, and I don't think they ought to be our highest priority.
Posted on 01/22/2009 |
By CHASE WRIGHT [email protected]
STAMFORD -- Stamford will receive nearly $3 million in state grant money to buy bank-owned foreclosed properties in its most affected neighborhoods.
The state Department of Economic and Community Development (DECD) will disperse $25 million in Neighborhood Stabilization Program funds to seven Connecticut cities for the purpose of stabilizing neighborhoods that have been impacted by bank-owned foreclosures.
The funds will be used to finance the home acquisitions and to rehabilitate or demolish and develop the properties. Stamford will target the funds to the West Side, East Side and Cove neighborhoods for their high concentration of foreclosures, bank-owned property, properties in foreclosure court process and properties that have sub-prime mortgages.
A win-win-win situation ... except maybe for the banks. But the federal government is looking out for their interests, and I don't think they ought to be our highest priority.
Comments