New Haven Independent

Housing and Urban Development (HUD) Secretary Shaun Donovan (at left in photo) came to town accompanied by Connecticut U.S. Sen. Chris Dodd (at right in photo) for a field visit with one of the nation’s most established not-for-profit urban housing developers, Neighborhood Housing Services (NHS). NHS is based on the Sherman Avenue block, where it has also rescued and renovated fading gems and helped working-class families become homeowners. NHS has also been on the front lines of helping struggling homeowners keep their properties during the current mortgage crisis.

With foreclosures mounting, houses in city neighborhoods are at risk of falling into the hands of out-of-town speculators the way they did during the last recession, which led to blight.

In fact, the house on Monday’s stop on Sherman Avenue just met that fate.

That’s why Jim Paley brought Donovan and Dodd there Monday morning. Paley, NHS’s executive director, was their tour guide for the event. He told them that the way out of the foreclosure crisis is through the purchase of homes by neighborhood nonprofits like NHS, not private investors.

The senator and the secretary were on the second stop of a day-long trip through three Connecticut cities. Monday’s events — in Hartford, New Haven and Bridgeport — focused on the foreclosure crisis. They were part of Dodd’s “Banking on Change Tour,” a public relations blitz meant to highlight the senator’s work as Banking Committee chairman at a time when his popularity ratings have collapsed and Republicans sense an opportunity to grab his seat in 2010.

Standing in front of the boarded-up house at 334 Sherman Ave, Paley (at left in photo) explained that private investors don’t make good property owners for neighborhoods experiencing foreclosures. Neighborhood housing organizations do a better job with rehabbing and property management than investors, who are often looking to flip houses for profit, he said.

“What do you recommend?” asked Sen. Dodd, chewing gum.

“We recommend that we get neighborhood stabilization money,” Paley said. Funding for NHS will allow the organization to buy more foreclosed properties that the organization could rehab and sell to first time homebuyers.

“We need to have control,” Paley said. “We don’t have it. The investors have the upper hand.”

Dodd asked if they could get into the house and take a look around.

NHS doesn’t own it, Paley said. “Another investor picked this up,” he said. “We put in a bid, they outbid us.”

“That’s why the recovery bill is so important,” said Donovan, mentioning $25 million coming to the state of Connecticut to help buy up foreclosed homes for resale. Of this money, $3.2 million is headed for New Haven.

Donovan said that home purchasing and rehabilitation can raise property values in a struggling neighborhood. “Do it right and the ripple effects are exactly the opposite of what’s happening now,” he said.

Paley agreed with the secretary. He spoke of how a recent home purchase by NHS had caused nearby For Sale signs to be replaced with painting scaffolding, as property value stabilization encouraged owners to re-invest in their houses rather than sell.

On a larger level, the housing sector was at the root of the current financial crisis, Dodd said, and we’re not going to get out of it without fixing housing.

Speaking to the press, Dodd said that he was pleased to have Donovan in Connecticut. “Having the secretary here increases our abilities to get something to happen.”

Asked if his tour was part of an effort to reconnect with voters in the face of decreasing public support, Dodd said, “You just have to do your job every day.” He then pointed the finger at the Bush administration. “These are not new issues,” Dodd said. “I regret deeply that the previous administration did not take these issues seriously.”

In addition to money to buy up, rehab, and resell foreclosed homes, the federal government is providing funding for foreclosure counseling to help homeowners work with lenders and stay in their homes. This is a technique that NHS has used successfully in New Haven.

NHS receives funding for foreclosure counseling through a national umbrella organization call NeighborWorks America. The director of this organization, Ken Wade, said that NeighborWorks America has received two supplemental appropriations for counseling from Congress of $180 million each.

Following their sidewalk conversation, Donovan predicted a “significant increase in commitment to counseling in the upcoming budget,” drawing a round of applause from the audience of local housing professionals.

“Help is on the way from this administration,” Donovan said.

Donovan and Dodd also took a tour of NHS’ Home Improvement and Energy Conservation Laboratory. The “green” building on Sherman Avenue features rooftop solar panels and alpine plants, tubular skylights, and a Combined Heat and Power unit in the basement. The CHP unit is an electricity generator powered by natural gas. In addition to providing power to the building, the unit harnesses the heat created by the generator to keep the building warm. Thanks in part to the energy efficient CHP unit, the utility bill last month was $1.09.

Following the green building tour, the senator and the secretary sat down for a discussion with local homeowners whose homes were saved through the intervention of NHS’ foreclosure counselors. Unlike at a similar housing foreclosure event at NHS with U.S. Rep. Rosa DeLauro, the press was not allowed to attend the conversation.

Previous Independent coverage of New Haven’s foreclosure crisis:

• Suburban Cop Finds A City Steal
• Absentee Banklords Thwart Foreclosure Sales
• Judge Forces WPCA To Give Mom A Chance
• WPCA Uproots Tenants, Too
• Home-Rescue Squad Ignores WPCA
• Sewer Agency Unloads House
• Foreclosure Evictions Halted
• Let The Bank Have It, This Time
• Hazel St. Sale Reflects Economic Climate
• Hill Foreclosure Triggers Memories, & Prayers
• Foreclosure Fee-Slashing Judge Leaves Town
• She’ll Be Watching Deutsche Bank
• A Last Pre-Foreclosure Look At A Lifetime Past
• New Yorker Snags Foreclosed-Upon Gem
• Foreclosure Dream Goes Sour
• Judge Slashes Foreclosure Bounty
• Tax Break Saves Woman’s House
• Bank Replaces “Gunshot Alley” Landlord
• Foreclosure Bill OK’d
• Singh Seeks Home For A Song
• Foreclosure’s Neighbor Worries More About Speeding
• Networking Replaces Foreclosure at Christy’s
• Foreclosure Bargain — & Renewal — Jeopardized
• Bank Outbids Akbar; Family May Keep Home
• “So Don’t Worry About Pablo”
• Bankruptcy Postpones Foreclosure
• Next-Door Foreclosures, 53 Years Apart
• They Met On Foreclosure Way
• Little Garage Draws Big Bids
• A 2nd Chance on Lewis Street
• Foreclosure Attracts New Breed of “Specialist”
• In Foreclosures, Judge’s Hands Tied
• Home Saved From Foreclosure. Cycle, Too
• A House For Precious?
• Deutsche Bank Grabs Dixwell Condo
• Reluctant Bidder Snags F. Haven Bargain
• Well, There’s Always Powerball
• Neighbors Retrieve Home From Bank
• Somebody Has Plans For Bassett Street
• Foreclosed, the Khennavongs Leave the Santanas
• Foreclosure Steal May Be Too Good
• 2nd Foreclosure in 3 Months Dims Bright St.
• After Foreclosure, W’ville Owner Still Hopes To Sell
• He’s Not Buying, Yet
• Quiet Foreclosure on Porter Street
• 3 Minutes Too Late
• Historic Gambardella Property Foreclosed
•2 Homes Lost, 1 Gained
• “Everybody’s Got To Eat”
• More Foreclosures, More Signs
• Foreclosure Sale Benefits Archie Moore’s
• Rescue Squad Swings Into Action
• A Bidder Shows Up
• Bank Beats Tanya’s Bid
• Westville Auction Draws A Crowd
• DeStefano: Foreclosure Plan Ready
• Can They Help?
• “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
• WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
• Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
• Renters Caught In Foreclosure King’s Fall
• She’s One Of 1,150 In The Foreclosure Mill
• Foreclosures Threaten Perrotti’s Empire
•“I’m Not Going To Lay Down And Let Them Take My House”
• Struggling Couple Sues Over “Scam”

To learn about the ROOF Project, a community-wide effort to help New Haveners navigate the foreclosure crisis, click here.

The following links are to various materials and brochures designed to help homeowners avoid foreclosure.

How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.

For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.

Click here for information on foreclosure prevention efforts from Empower New Haven.