The blue markers indicate rundown homes the city of Racine is buying with $1.9 million in stimulus money it received from the federal government for "Neighborhood Stabilization." All of the homes are in disrepair and are now unlivable. Seven will be remodeled and sold for less than $75,000. Two will be demolished. Click on the map above for an interactive map showing the addresses, the city's purchase price and which home will be demolished. The city is set to buy nine homes east of Ohio Street to rehab or demolish.
The Loan Board of Review agreed Tuesday morning to use a portion of the city's $1.9 million in "Neighborhood Stabilization" stimulus money to buy the homes and, hopefully, turn the distressed properties into owner-occupied homes. The city already has accepted offers on all nine properties.
The homes purchases include:
1706 Maple St. - The city bought this home near West Sixth Street for $24,900. It's assessed at $64,000. The city hopes to rehab the home to protect its investment in the West Sixth Street neighborhood in recent years.
1537 Thurston Ave. - This West Racine home was the city's most expensive purchase at $58,000. But it's also the nicest home on the list, according to Jean Wolfgang, of the city development department. Wolfgang coordinated the purchases of all nine homes. The city is buying the three-bedroom house from US Department of Housing and Urban Development.
2026 Orchard St. - The city bought this home just east of Ohio Street for $45,000. Located in a good neighborhood, this home should sell, Wolfgang said.
826 Forest St. - Another HUD foreclosure, Wolfgang described this home as the "tiltin' Hilton" because the inside is such a mess. The city is buying the home for $15,100 - the value of the land - and tearing the house down. (The home was assessed at $80,000, based largely on its exterior appearance, officials said. The interior is unlivable.)
1317 Albert St. - The city bought this home for a $14,900 and plans to spend $30,000 to rehab it. They're buying the home from Wells Fargo bank. (The city gave priority to working with local lenders, including Tri-City Bank and Bank of Elmwood, but didn't have luck with either of them. Deals with Tri-City fell through, and Bank of Elmwood didn't respond to offers.)
1124 Irving Place - This home just east of Washington Avenue off of 11th Street is a big house with a new kitchen. The city bought it for $30,000.
630 Hagerer St. - Located north of High St. just off of N. Main Street, this is a two-family home the city bought for $35,000. HUD had listed the duplex at $64,000. Housing Technician Bill Bielefeldt said this was a home worth investing in. "The neighborhood is on the edge," he said. "We don't want to see this sitting there too long."
1100 MLK Drive - Located near the King Community Center and Julian Thomas Elementary School, Assistant Development Director Joe Heck said this home was "awful 30 years ago. I have nothing good to say about it." The city bought the home for $10,600 and will tear it down. The lot, located near the former Homeward Bound site, will hopefully be used for new construction.The nine selected properties are part of 14 homes - 10 for rehab and four for demolition - the city plans to buy with the stimulus money, Heck said. Once these purchases are completed, Wolfgang will start work on the next properties.
All of the rehabbed homes will be sold as owner-occupied properties with restrictions on the loan or deed to ensure people don't turn the buildings over to landlords for rentals. The stimulus bill requires the home to sell for the amount of money the city puts into the homes. (Meaning the city can't make money on the sale.) The city capped its commitment to any one property at $75,000.
All of the buildings are abandoned, with most in foreclosure. Federal law prohibits the city from buying occupied homes. It also limits sales to 95 percent of the homes appraised value. (Meaning the city can't buy a home for more than its worth.)
The purchase process began in January when the city applied for the Neighborhood Stabilization stimulus money. The City Council approved the grant in April, and turned over approval of all purchases to the Loan Board of Review, which is made up of city legal, development, building and finance staff. No City Council members sit on the board, which has existed for 30 years.
Alderman Greg Helding attended the Tuesday meeting because he was surprised the council didn't get final approval over the purchases properties. But he also acknowledged the council handed over that approval to the Loan Board of Review in April. "Shame on me for not reading the entire grant application," he said. (Helding added it made sense for the Loan Board of Review to handle the program because the right experts sat on the board.)
Helding also asked that, in the future, the council be given a heads up on the criteria used to select the properties. (Wolfgang began the meeting by laying out a point system she used to score properties reviewed for purchase.) City officials said they will put the scoring system, along with all properties review for purchase, on the Department of Development's website.
These investments makes loads of sense. Good job. I think investing like this will work fine.
ReplyDeleteIt's unfortunate that local government is getting involved in the housing market. I understand if the city wants to purchase them to demolish them, but they should not be the ones rehabbing and flipping properties. Nobody wanted these properties to begin with, now the city will purchase them, fix them up, and let them sit for many more months--on the taxpayers dime.
ReplyDeleteWhen is this good for nothing city council going to realize that the city does not belong in the real estate speculation business? STOP THIS YOU IDIOTS!!!! You continue to place yourself in direct competition with property investors and real estate markets when you do this kind of crap! Not to mention, WE DON'T HAVE THE MONEY FOR THIS KIND OF FOOLISHNESS. The next time you ask for money to pay the police or firefighters or for the schools, the answer is going to be an emphatic NO! If you have money to spend on this kind of idiocy, then you don't need any more taxpayer dollars to pay for the the things we REALLY need. This city council, and its one-time-half-term mayor are finished in this town.
ReplyDeleteLet me see....The City Assessor's Office sets the assessments. The homeowner hits hard times and becomes unemployed or underemployed and loses the home to the city's development department with the assistance of the development department....
ReplyDeleteI can see this because of owning a building on downtown Sixth Street. Why are many of our buildings on downtown Sixth Street assessed higher than Main Street? Why are there such things as $100,000 water hook up fees and a alcohol licensing policy which now prohibits the downtown from the very thing we need downtown, some groceries from those of us who cannot dine out every night.
sorry,
ReplyDeletegroceries for those of us (especially the shop owners) who cannot afford to dine out nightly.
Funny how more and more of this is occurring ever since the Realtor took office. Please resign.
ReplyDeleteOkay all you paranoid real estate agents, relax. This is a good thing for Racine to invest in. Hiring people to rehab the house and sell at a profit and get it back on a tax base. Kenosha tears down trashy houses as one in Racine will be trashed. It's a good thing.
ReplyDeleteKeep it up, it makes sense, it's an affordable venture that will pay off. People have discussed this for years and years PRIOR to our present Mayor.
Racine Resident - she needs to put down her video cam, stop snooping on her neighbors, get therapy and simmer down. Good grief woman, work out or take a walk. Get some of that fat off and get on with your life. Your false alarm buttons that always go off are bad for your mental and physical health.
ReplyDelete1) The money for this is being provided by the ARRA (stimulus). You may disagree with the stimulus - I disagree with a lot of it - but it is out there. We could refuse because we don't like the concept, but that doesn't mean the money will not be spent. It just means it will be spent for the benefit of some place else. If we don't take our share, other cities will.
ReplyDeleteThe money ($1.9M) was offered for "Neighborhood Stabilization" to rescue foreclosed homes before the further damage a neighborhood. It was not offered for police, firefighters, or any other purpose. The question we were asked was "Would you like $1.9M to remediate blight caused by foreclosures?" It was a "yes or no" question. We either take the money for that purpose or we don't. Given the impact of foreclosures on the City of Racine, I was happy to accept any money that could help.
2) While there is some risk involved in any real estate transaction, this effort could hardly be called speculative.
For one thing, financial speculation is done to make a (usually) big profit. The city is not allowed to make a profit on these homes. We sell a house for what we have into it.
In addition, the city is doing everything it can to use this money wisely.
a) We are using criteria make sure rehabbing/removing the house will have a positive impact on the surrounding neighborhood.
b) We have a per-house limit on spending.
c) We are trying to purchase for the least possible price.
d) We are taking into account the likelihood of selling the rehabbed home when making purchase decisions.
3) There are a glut of foreclosures on the market right now. Based on what I saw at this meeting, the competition is not too heated. We are participating in the real estate market, not competing with it. Nothing forces the banks to take our offers. If they feel we are low-balling them, they can take a pass, as some have. So far, we have purchased 9 properties. Considering the number of properties that are abandoned, in tax trouble, or in foreclosure - this is a drop in the well. One could not seriously think it would have a significant impact on the market.
That being said, if we are in direct competition with a potential absentee landlord, I have no problem with that.
Sorry to sound like a snot, but they can rehab most of these houses and they will still ultimately be occupied by the same kinds of folks who let them go to waste in the first place. It's all about location.
ReplyDeleteFine, tear down the really horrible ones. But the others - with the exception of the one on Orchard (maybe) - they are all in neighborhoods where it isn't going to matter.
When home prices have tanked in good neighborhoods - and potentially undesireable elements might be able to afford to buy in the good neighborhoods - why would anyone buy in the neighborhoods being discussed here?
Holly
Rehab work for Becker ?? Or for other unemployed ??
ReplyDeleteHelding's response was far to rational and concise to be understood by many of the readers of Racine Post.
ReplyDeleteGreg Helding this is a question directed to you. Dose the Republican Party view you as a full fledged member or a babbling idiot? Do they support you or ignore you? If the party that I believe, is the party that makes the most sense time after time, considers you a good bet I will start to focus my energies on the liberals. Really Mac get rid of this moron is this the best you could do for Alderman in this district? This is the same guy that said we should repo proerties from owners and demolish them, what a dork! RINO at its best!!!!
ReplyDeleteGreg, Too bad you are a republican. Really, it is a shame. You make sense on this topic and making sense is something republicans don't ever do.
ReplyDeleteGerg is not a Republican, he is a RINO.
ReplyDeleteGreg, is this just another set up for you special interest jerks to fix up more properties so you and Wisneski and McCarthy can offer them to city/school employees for seriously discounted prices?
Quit wasting our tax dollars and get back to governing. Real estate speculation is not the city's business!
Shrubber-
ReplyDeleteThere's need to insult RacinePost's readers. Your comment is pointless and just plain wrong.
We need police officers to move into them. I really want us to do something to change the resident requirement for officers. You want a pay check from the city then live there. Then they will care more about the crime in the city when their child is playing on the block.
ReplyDeleteYep this is why I am moving to Kenosha, where social stratification is in full effect.
ReplyDelete