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Stimulus money gives city chance to fix up foreclosed properties

Staff photo by Teesha McClam Lynette Salyer talked about a foreclosure next door in her Kettering neighborhood.

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By Ken McCall, Staff Writer Updated 10:59 AM Monday, August 17, 2009

It’s no fun living next to a vacant or abandoned house.

Lynette Salyer paused from sweeping the sidewalk in front of the home she and her husband Ron own in east Kettering and looked at the house next door.

The lawn is raggedy. A side window has been boarded up, and the detached garage is festooned with plywood. Taped to the front picture windows are notices warning off intruders and announcing the house is owned by the U.S. Department of Housing and Urban Development. Also, a paper says, “mold is present.”

“It’s bad,” Salyer said. “For instance, right now the grass needs to be mowed, and HUD’s only going to come out twice a month to take care of it.

“It’s discouraging to neighbors. I mean, do you want to live next to a vacant house? What do you think that’s doing to your property values?”

Across the street from the vacant home at 2480 Bingham Drive, Richard Joseph said the downward spiral of the house and its former owners — one, a former Delphi worker who took a buyout — was a “sad deal.”

“It used to be real nice, one of the nicest ones on the street, actually,” Joseph said. “It made mine look terrible. I’m hoping somebody buys it and fixes it up.”

Luckily for Joseph and Salyer and their neighbors, that somebody could be the city of Kettering.

Their neighborhood just east of Woodman Drive and north of Dorothy Lane is one of two the city will target with its allocation of federal Neighborhood Stabilization Program money.

The city got $795,000 in the first wave of the HUD-administered program, and has applied as part of a regional consortium for $3.3 million more in the program’s second wave.

The stimulus dollars must be spent on abandoned or foreclosed properties. All of the money spent must help individuals and families whose income is no more than 120 percent of median income in the Dayton metropolitan area. For a family of four, that would be an annual income of $74,520. And at least a quarter of the money must go to help those with very low incomes that do not exceed 50 percent of the area median. That would be $31,050 for a family of four.

In addition, the money can only be spent in low- and moderate-income neighborhoods that have high rates of sub-prime loans, foreclosure and property abandonment.

The neighborhood around Bingham Drive has about 40 vacant and abandoned homes right now, said Angela Williams, Kettering’s community development manager. Also, according to HUD data, close to one-third of the mortgages there are high-cost, sub-prime loans. The expected foreclosure rate in the next year is close to 8 percent.

The neighborhood had 65 foreclosed homes sold at Montgomery County Sheriff’s auctions during 2008 and the first half of 2009, a Dayton Daily News analysis found.

The city is planning to use all of its NSP money for purchasing and rehabbing homes, helping qualifying buyers with down payment assistance and building five new homes on vacant lots. The new building will occur in the Wiles Creek neighborhood between Wilmington Pike and Acorn Drive. The city has no demolitions planned.

In all, there are about 70 vacant units in the two neighborhoods, Williams said, and the money will help them address about 45 of them.

“So we’re really addressing a big chunk of the problem,” Williams said.

Huber Heights

Montgomery County, which received $6 million in the first wave, identified eight communities that qualify for stabilization programs, but decided to initially concentrate efforts on a neighborhood in south Huber Heights.

The two census tracts between Old Troy Pike and Brandt Pike, south of Chambersburg Road, saw 89 foreclosed homes sold at sheriff’s auctions during 2008 and the first half of 2009, the newspaper’s analysis found.

“It’s our pilot area, where we are trying to flush out all the bugs from the program, especially in acquisition” of foreclosed properties, said Kiya Patrick, a community development specialist with Montgomery County. The county has hired County Corp, its nonprofit economic development arm, to coordinate the purchasing and rehab work, Patrick said, and plans to turn around 10 homes with some of the first wave money.

After the property acquisition process gets going, the county will turn to other communities. Certain neighborhoods in Miamisburg, Riverside, Trotwood, West Carrollton, and Harrison, Jefferson and Miami townships are eligible under the federal rules.

About a half million dollars is being earmarked for demolition of at least 75 properties in areas outside the city of Dayton. The programs have to be careful not to pick a neighborhood that’s too far gone to do the acquisition and rehabilitation, Patrick said.

“We’re looking at challenged communities that have some issues, but we think that with some intervention we can stabilize that area,” she said. “And once we do that, we can move to the next one.”

The southern Huber Heights neighborhoods are a good place to start, she said, because they are still in reasonably good shape.

“The neighborhood still looks pretty good,” Patrick said. “They have decent schools. There are still people willing to buy.”

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