Help Is on the Way
Help Is on the Way
The communities most battered by the foreclosure crisis may soon receive some much needed federal assistance, providing Congress and the president stay the course.
Congress and the president this week will be working out the final details of a comprehensive housing finance bill intended to stabilize U.S. housing and financial markets. One key component of the plan is inclusion of Community Development Block Grant funding to help communities purchase and renovate foreclosed and abandoned homes. These grants, proposed by the Center for American Progress and Enterprise Community Partners in its January 2008 Great American Dream Neighborhood Stabilization, or GARDNS Plan, are designed to turn around communities that have been devastated by the foreclosure crisis.
Here is a by-the-numbers look at the state of play of this key legislation, and the importance of this funding for Community Development Block Grants to communities struggling with foreclosures:
$3.9 billion: Amount made available to CDBG program by the Senate version of the bill.
84-12: Voteby which the Senate passed The Foreclosure Prevention Act of 2008 on Friday.
120,000: Number of properties the Center for American Progress estimates would be purchased and rehabilitated if the Senate’s language becomes law.
1,180: Number of state and local government units to which the Department of Housing and Urban Development already provides some type of CDBG funding.
Local governments could use the grants to purchase, renovate, and resell foreclosed homes, and then use the proceeds from these sales to repeat the process. These grants would help reverse the current downward spiral in which foreclosed homes fall into disrepair, reduce neighborhood property values, drain municipal resources, and encourage more foreclosures.
88,195: Total number of foreclosures in June 2006
164,644: Total number of foreclosures in June 2007
252,363: Total number of foreclosures in June 2008
13,194: Number of foreclosure filings in Ohio in June 2008.
1 in 72: Houses receiving a foreclosure filing in Stockton, California.
11: Rank of Denver among metro areas with the highest foreclosure rates per household.
Approving Community Development Block Grants would spur the economy. By funding renovations, the grants would stimulate the construction industry, which has been hit hard by the fact that people are purchasing fewer new homes:
857,000: Number of new, single-family homes sold in May 2007 (seasonally adjusted annual rate).
512,000: Number of new, single-family homes sold in May 2008 (seasonally adjusted annual rate).
80,000:Number of full-time equivalent jobs expected to be created by the purchase and renovation of foreclosed homes through CDBGs.
$8.6 billion: Amount of economic activity which would be generated by these activities
The foreclosure crisis is a result of policy failure at the federal level, but the results are hitting home in hundreds of localities in dozens of states. Foreclosures are a serious drain on local resources, as municipalities must cover rising costs ranging from trash removal, grass cutting, and boarding up vacant properties to more serious problems of vandalism, increased property and personal crime rates, and arson. The Community Development Block Grants would help local governments cope with the crisis:
$1.2 billion: Costs associated with foreclosed properties that local governments would avoid if the CDBGs are enacted.
$200 million: Minimum property tax revenue from the renovation and resale of foreclosed properties made possible by the grants.
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