Neighborhood stabilization effort aims to limit vacant housing
stock
The News to You
With foreclosed homes dotting the community, a Hollister
Redevelopment Agency program aims to identify, purchase,
rehabilitate and re-sell foreclosed homes . The program’s goal is
to put low- or moderate-income families into the homes, providing
them with a place to live while also preventing properties from
sitting vacant, which can affect the value of other homes in those
neighborhoods.
Looking for a way to combat the effect foreclosures have on
local neighborhoods, Hollister’s Redevelopment Agency is extending
a program that funds the purchase, rehabilitation and resale of
vacant or foreclosed homes to low-income families.
Neighborhood stabilization effort aims to limit vacant housing stock
The News to You
With foreclosed homes dotting the community, a Hollister Redevelopment Agency program aims to identify, purchase, rehabilitate and re-sell foreclosed homes . The program’s goal is to put low- or moderate-income families into the homes, providing them with a place to live while also preventing properties from sitting vacant, which can affect the value of other homes in those neighborhoods.
Looking for a way to combat the effect foreclosures have on local neighborhoods, Hollister’s Redevelopment Agency is extending a program that funds the purchase, rehabilitation and resale of vacant or foreclosed homes to low-income families.
The Hollister Neighborhood Stabilization Program this week received a supplemental appropriation of $400,000 to continue its efforts. Since it was formed in October 2009, the program – in partnership with the Community Housing Improvement Systems and Planning Association (CHISPA) – has purchased five homes.
Using an initial $600,000 allocation, two of those homes were rehabilitated and resold, and the other three are in escrow.
The two-year extension of the agreement between the RDA and CHISPA continues a program that Development Services Director William Avera said in a report to the City Council “has proved to be very beneficial to existing neighborhoods” even though it is “not generating huge numbers of affordable housing” units.
“The idea behind the program is to take advantage of the foreclosures that have been sitting around on the market for awhile in some dilapidated state,” Avera said in an interview. “We provide the financing to the local nonprofit, CHISPA, which purchases and rehabilitates properties which are then sold to low-income families.”
Under the terms of the agreement, the two agencies identify properties within the redevelopment project area that are prime candidates to be acquired, rehabilitated and sold or leased to low- or moderate-income families. While only houses have been acquired through the program so far, condominiums, townhomes and manufactured homes on a permanent foundation are also eligible.
The RDA then lends money to CHISPA to acquire and rehabilitate the housing units, with the goal of providing potential homeowners “with a healthy, safe, sanitary and code-compliant home,” according to the agreement. CHISPA solicits bids from local construction professionals for the rehab work and handles the permitting process for each property. The association’s overhead costs cannot exceed 20 percent of the overall rehabilitation cost.
In conjunction with the city’s first-time homebuyer program, the RDA markets the program in an effort to identify and potential purchasers for the properties, with a goal of ensuring that local neighborhoods do not have an abundance of vacant and potentially devalued homes.
“We don’t want a bunch of vacant houses sitting around, because that doesn’t do a neighborhood or a community any good,” Avera said. “We want to get the houses not only into a state of good repair but to provide additional affordable housing options.”
Properties that are not resold within six months of the completion of the rehabilitation work will be leased to low- or moderate-income families through CHISPA, which would receive no more than 6 percent of the rental amount.
The five homes purchased as part of the initial one-year, $600,000 agreement were on Jacaranda Circle, Rustic Street, Primavera Drive [two homes] and Monica Drive. Purchase prices ranged from $130,000 to $197,001, with per-home rehabilitation costs ranging from approximately $28,000 to just more than $50,000.
The final sales price of the two homes sold so far were $223,000 and $225,000, respectively. Two of the other rehabilitated homes are being sold for $216,000 and $230,000.
“We’re not buying homes at more than their appraised value or selling them for more than the appraised value,” Avera said. “We’re not in the business of competing with private buyers. We’re trying to focus on properties that they aren’t interested in. our goal is not to pay more than someone else. We’re not getting into bidding wars.”
Proceeds from the sale of the properties don’t go directly back into the program, but rather into the RDA’s housing set-aside funds. Funding is then re-allocated to the neighborhood stabilization program with approval from the City Council, in its capacity as the RDA board.
