Paul Bass Photo
NHS’s Paley (at right with a potential financial backer) outside one of the two Winchester Ave. houses he sought to buy.
The Harp administration has decided to sell five city-owned properties to five different kinds of buyers representing five different approaches to rebuilding neighborhoods.
The Livable City Initiative (LCI), City Hall’s neighborhood anti-blight agency, revealed its choices in a submission to the City Plan Commission, which this past Wednesday night voted to recommend approval of all five sales. Now the proposed sales go before the LCI Board of Directors and the full Board of Alders for final approval.
The Not-For-Profit Anti-Gentrification Strategy
609 Winchester.
Prospective builders competed for the chance to buy three of the five properties, which LCI had obtained through tax foreclosures. (Click here for a story detailing the three properties and the proposals from eight prospective buyers.)
Neighborhood Housing Services (NHS) bid on two of the properties, near each other on Newhallville’s Winchester Avenue. The not-for-profit builder was looking to expand on its two-fold strategy for reversing blight without promoting gentrification:
• Try to work on many rundown properties in one concentrated area (it already is doing lots of work in that part of Newhallville);
• And use tax credits and other help to enable lower-income working families to buy (for below-market prices) and live in extensively refurbished homes that won’t require new roofs, boilers or other costly maintenance for years to come. NHS also trains homeowners in home maintenance. The subsidized price, along with no early costly repairs needed in early years, increases the chances that families can stay in the homes long term and pass them on to their children. NHS’s extensive gut-rehabs also improve housing stock in the neighborhood. So does the presence of homeowners with a stake in the area.
LCI agreed to sell NHS the abandoned, boarded-up three-bedroom, one-family house at 609 Winchester Ave. for $11,000. In its proposal to LCI, NHS promised to spend $275,000 overall on gutting and rebuilding the house. That would cover hard construction costs, lead abatement, and soft costs (like permits and legal fees). Yet NHS would be able to then sell the finished three-bedroom house to a lower-to-moderate-income owner-occupant for only $140,000, it claimed, largely by making use of housing tax credits. The proposal stated that NHS would be able to use an existing revolving line of credit to finance the project (a promise it made in both its Winchester Avenue proposals), which it promised to complete in 2015 assuming it gains title in 2014.
“The house that requires the most extensive renovation work went to the organization that has the resources to complete it to the standard that was acceptable to the neighborhood,” reasoned LCI chief Erik Johnson. “We tried to make decisions based on who had the capacity to complete it.”
The Turn-Tenants-Into-Homeowners Strategy
679 Winchester.
LCI turned down a second bid by NHS, for an abandoned three-family at 679 Winchester. NHS wanted to fix it up and then maintain ownership, renting out apartments.
LCI instead chose a proposal by Outreach Realty, a for-profit firm run by Roberta Hoskie (pictured). Hoskie promised in the proposal that in addition to paying the city $15,000 for the property, her firm will spend another $75,000 fixing it up, then make it part of her company’s first-time homebuyer program. The program, entitled “Transitioning Tenants to be Better Landlords,” offers tenants formal “homeowner training, credit repair and budgetary classes” so they can eventually buy their houses.
“One of the future tenants of our Winchester property will ultimately become the owner of the property,” Hoskie said. “Upon the tenant’s purchase the remaining tenants will pay rent to the new owner this will create an additional source of income. The program creates a win-win for the new owner [previous tenant], because not only does it create a new stream of income, but the money the tenant was paying for rent now stays in the household.”
Hoskie said it will take between one and two years to transition a tenant to homeowner. “One real estate transaction made the difference in my life,” she said, “and I hope to afford someone else the same.”
The Direct Make-A-Homeowner Strategy
The third property in the competition, at 381 Grand (pictured), is in better shape, thus needing less work. So in this case LCI looked at people who wanted to buy it and move in right away. It chose Frank R. and Frank A. Landolfi, who offered to pay $28,000 and “update” the property as a two-family residence they would occupy.
The Sliver Strategy
The other two properties did not involve competition. At one of them is a 2,187 square-foot vacant lot at 19 Winthrop Ave. The lot is next door to a one-family house that used to belong to a notorious slumlord in town named Michael Steinbach. A man named Adelberto Alicea has bought that house out of foreclosure; now he’d like to buy the adjacent sliver lot for $544 to use as a driveway and a side yard, according to Evan Trachten, the LCI staffer handling the five property sales. New Haven pursued that strategy in a big way when it first created LCI in the mid-1990s, with the idea of luring more homeowners to neighborhoods by offering them more land to work with, for gardens or parking or running-around space. Trachten said this sale is taking place under a sliver-lot program that gives the buyer a 10-year tax abatement on the side property, followed by a five-year tax phase-in at 20 percent a year.
The Habitat Veterans’ Strategy
LCI plans to sell the fifth property, a 17,294-square-foot vacant lot at 201 E. Grand Ave. for $1,000 to Habitat for Humanity. The not-for-profit group enlists volunteers (sometimes churches or synagogues or other communal organizations) to build a new house for a low-income family to own. Habitat proposed to construct a single-family home at 201 E. Grand under its “Veterans Build” program, backed by Liberty Bank. Habitat has identified a U.S. armed-forces veteran for whom it will build the home, according to Trachen.
@NHI -- I'm surprised you refer to the City's distributing, (or gifting) of foreclosed properties as "sales". The dollar figures on all these transactions are nominal at best, and not indicative of market value. Fwiw.
Also, how much profit will Hoskie make off her first-time homebuyer? Where is the public good that justified the City giving her, or the Landolfis, these homes without simply putting them on the market?