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Bold plan aims to put families in foreclosed homes
County, cities together ask for nearly $370 million to revive neighborhoods
Tuesday, Aug. 4, 2009 | 2 a.m.
Sun Archives
- County, cities hammer out plans for foreclosure funds (6-16-2009)
- For lasting stimulus, parties have to play nice (4-6-2009)
- North Las Vegas eyes foreclosure solution (11-14-2008)
- Federal money might help fill valley’s empty houses (9-30-2008)
- Feds send $72 million to region to fight foreclosure (9-26-2008)
Sun Topics
Area municipalities have banded together to create an unprecedented proposal to use nearly $370 million in federal money to help set right neighborhoods across the valley reeling from the foreclosure crisis.
If the federal government approves the grant, it would be the largest amount of money local governments have ever spent at one time on the issue of housing, experts said. The level of collaboration among Clark County, Las Vegas, North Las Vegas and Henderson also sets the project apart, they added.
Through rent or ownership, the proposal aims to put families in 4,200 abandoned or foreclosed houses. It focuses on neighborhoods that received the worst possible score in a federal system for rating the impact of foreclosures.
Mike Pawlak, who oversees the county’s community resources management division, called the plan “unique and exceptional,” adding, “you’re not going to see this again.”
Pawlak’s agency applied July 17 for the Housing and Urban Development money, but the federal agency may take until October to respond, he said.
The county would be the lead agency on the project but each municipality has put in for a share. Local governments will then pass most of the money along to nonprofit organizations. Across the valley, the largest amount — $133 million, or 36 percent of the total — would go to buying and fixing houses for rent. Another 27 percent would buy and fix houses for resale to families earning up to 120 percent of the area median income, or $76,680.
Mike Mullin, president of Nevada HAND, a nonprofit organization that builds affordable housing, said the $370 million plan is also unique because of the time frame in which it must be completed — three years. The money would come from the second round of a program known as Neighborhood Stabilization, a precursor to the stimulus. The first round was not competitive and brought about $64 million to the valley, money that arrived in March and must be spent within 18 months on projects similar to the ones described in the current proposal.
Normally, Mullin noted, new federal funding programs such as these can take up to three years just to roll out. But the dizzying foreclosure and unemployment rates have forced the government to tighten those timelines.
The challenge, Mullin said, is “how to get the money out on the street without doing something dumb or ineffective.” His agency will apply for some of the funds.
Pawlak said another challenge will be to stay ahead of the market curve driven by the checkbooks of investors, as they swoop into the valley to take advantage of prices from a decade ago. One stipulation of the federal program is that houses must be purchased for less than the appraised price. This may be hard, Pawlak said, if local governments find themselves “competing against pools of investors making offers.” He said 40 percent to 60 percent of the recent record sales of previously occupied houses — 4,700 in June — may be due to investors.
The key, Mullin said, may be getting banks to work with local governments, allowing agencies participating in the grant-funded project a “first look.”
Dan Goulet, president of the United Way of Southern Nevada, said this $370 million-dollar effort wouldn’t only affect real estate. Families in precarious housing situations need more help with other issues, such as stress and joblessness. So helping them secure housing “will help drive down the needs of families for other services.”
Pawlak said having all the pieces work together — private-sector banks, nonprofit organizations and local governments — is key to meeting a vital goal: “helping the hardest-hit, most distressed areas of the valley, so they can be up to par when the rest of the valley recovers.”
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NAR just posted today that pending home sales are up 3% in June, sales have risen for five straight months.
Isn't the federal government broke? Tax receipts the lowest since 1932 with an anticipated 18% decrease this year.
http://news.yahoo.com/s/ap/us_plummeting...
Tax receipts are the lowest because rich people have so many loopholes and tax rate cuts due to republican irresponsible tax cuts.
1/3 of all pay is now going to rich people -according to IRS records, yet they are pay the smallest percent tax rate.
It is not the 10% retraction of the economy that is reducing tax income- it is too many tax breaks for rich people.
This is a good idea. Keeping unoccupied homes to a minimum is an imperative to finally stabilize home prices, as well as to prevent homes from becoming run-down from neglect. But I wonder that with the down-turn in the economy and people leaving LV, will there be enough people with jobs around to rent or buy these refurbished homes.
I'm slightly confused.
I'm sure I probably missed something.
Dan Goulet from United Way said, "Families in precarious housing situations need more help with other issues, such as stress and joblessness. So helping them secure housing "will help drive down the needs of families for other services."
If they need help with joblessness, how can they earn 120 percent of the area median income, or $76,680?
I'm confused too... If they're earning $76,680, they should be able to afford many of these houses anyway. Why does the govt. have to get involved? If someone earns that much money and doesn't want to buy a house, how is this going to encourage them? And why do they need to be encouraged? Perhaps the writer could be more clear....
Mr. Pawlak mentions competing with investors and getting ahead of their checkbooks. I suppose with taxpayer money it's best for counties to buy, sell and rent these homes as opposed to those greedy private investor dollars.
Is it the jobless moving into these homes, or people earning 120% of the areas median income?
To readers who say they're confused: First, the story says "up to 120 percent." So people in the program will fall along that continuum -- 50 percent, 75 percent and so on. Second, a family can need help with joblessness because one member of the family is out of work, while another still has a job. Hope that helps.
- Timothy Pratt
This is specifically for Bob365 - you need to educate yourself about who is paying taxes in this country before making these kind of statements. You don't know what you are talking about. 40% of this country's taxes are PAID by the top 1% of earners (people earning over $400,000. 70% of taxes are paid by folks earning $113,000 of more a year. See below from the IRS :
Percentiles Ranked by AGI (means adjusted gross income)
AGI Threshold on Percentiles
Percentage of Federal Personal Income Tax Paid
Top 1%
$410,096 +
40.42
Top 5%
$160,041 +
60.63
Top 10%
$113,018 +
71.22
Top 25%
$66,532 +
86.59
Top 50%
$32,879 +
97.11
Bottom 50%
<$32,879
2.89
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service
Source: IRS
Timothy,
Thanks for joining the thread. In your 7th paragraph you wrote the following:
"The first round was not competitive and brought about $64 million to the valley, money that arrived in March and must be spent within 18 months on projects similar to the ones described in the current proposal."
Can you elaborate? In what sense was the first round "not competitive"? Has any of the money been spent? Is there something about this second proposal that will make it competitive where the first round wasn't?
Thanks.
Timothy,
Another questions occurred to me as I reread Mr. Millin's comment quoted by you above as follows:
"The key, Mullin said, may be getting banks to work with local governments, allowing agencies participating in the grant-funded project a 'first look.'"
Why would these non-profits need a "first look"? Unless they are trying to buy these foreclosed houses at below even their current low market values what do they gain by getting a shot at these houses before everyone else that can be so critical to the program's success?
Every little helps, people just need a hand to get going, nothing wrong with that.
I'd rather see my money helping someone making the effort than someone who wasn't.
Remember, this is real life, no one has it easy!