Racine likely to get $1.4 million to help neighborhoods; But where to spend?

The city of Racine is line for another $1.4 million to buy old homes and refurbish or demolish and rebuild them. The contentious question heading into 2010 is what old homes to buy?

Members of the City Council's Finance Committee previewed a future debate Monday night by questioning the strategy of targeting government money to a specific neighborhood in hopes of dramatically improving an area.

Alderman Mike Shields questioned city plans to focus on the neighborhood south of Downtown at the expense of other areas. "If we continue to build on the south side, we're going to have other areas suffer," he said.

Alderman Terry McCarthy backed Shields. "His advice is well taken," he said.

At issue is the complicated process of trying to maximize the effect of state and federal money in a city that has needs in all directions and neighborhoods. Clearly the central city, or Riverview, as the Mayor likes to call it, has the most distressed homes in the city. But the foreclosure crisis has hit neighborhoods hard throughout Racine.

The policy decision then becomes do you target poor neighborhoods in hopes of making significant improvements? Or do you go into poor or even wealthy neighborhoods and root out problem properties before they spread?

Without getting into specifics, I have family living in a traditionally middle class neighborhood in the city that happens to be in Shields' district. Three neighboring homes are in foreclosure or on their way into foreclosure, and two more are for sale. If you go down the block, another 5-10 homes are for sale. It's clearly an area on the edge. Sadly, this is just one block in a city with high unemployment in an economy with little hope of turning around in the next five years.

The $1.4 million that's available to the city is part of a surprise $6 million pot of state money. (WHEDA returned $4 million to the state it didn't need and the Department of Commerce had $2 million set aside for this type of program.)

Heck said the $1.4 million allows the city to buy 10 homes and refurbish eight of them; The other two would be demolished and rebuilt. The city is also using $1.9 million in federal stimulus money to buy another 14 rundown homes to refurbish or demolish. That gives city development two dozen opportunities to pull a problem home off the market, and, in theory, turn it around into an owner-occupied property.

Shields argued Monday night city development should look throughout Racine to find the problem properties, rather than focus on one pre-selected area. But Alderman Q.A. Shakoor II pointed out a targeted approach can work. He lives in the West Sixth Street area, which the city focused on and turned around from a high-crime area into a solidly middle-class neighborhood.

"It can work," Shakoor said in response to Shields.

Heck told the committee that the 10 properties the city would buy with the state money - Racine still has to apply for the grant, but is likely to receive the money - have not been selected. It won't be hard to find qualifying properties everywhere in the city, he said.

"Look out the window and you can practically find 10 houses that need work," Heck told the committee.

The city's grant for the $1.4 million is due on Jan. 14. The grant will include a list of 20 potential homes to buy. The list would be narrowed to 10 once the city receives the grant, Heck said.

A decision from the state should come quickly. Work on the homes needs to start by mid-June, he said.