The national foreclosure crisis is like a nightmare, from families losing their homes on a personal level, to once-thriving streets with overgrown yards and unkempt, abandoned houses. While many homeowners are struggling to hold on to their homes, governments are trying to revive deteriorating neighborhoods, stimulate the local economy, create more jobs and secure better housing for their lowest-income residents.
This may seem like an impossible mission but local governments are rebuilding communities using the Federal rescue package, the Neighborhood Stabalization Plan (NSP).
The NSP program enables local governments to purchase foreclosed or abandoned homes from banks at 15% below market rate, rehabilitate the homes, and resell or re-rent them to low-income residents. A program of the Federal Department of Housing and Urban Development, NSP’s mission is to create affordable housing: the rehabilitated homes are dedicated to residents that earn between 50% and 120% of area median income (AMI), most of them families. Because the areas most affected by foreclosures are typically low-income neighborhoods, the income caps on rehabilitated homes will help communities retain citizens, preserving ethnic and cultural identity.
As a first step, rehabilitation endeavors must render homes “decent, safe and habitable” according to HUD’s Housing Quality Standards. Efforts are being made to exceed these basic standards, by promoting greater durability, energy efficiency, water conservation and indoor air quality…green building. Adding these green retrofit elements may present opportunities for job training, apprenticeship programs and greater community development.
Under the first round of NSP under the 2008 Housing and Economic Recovery Act, California received $530 million out of the $3.92 billion nationwide, much of this funding disbursed directly to hard-hit cities and counties. The American Recovery and Reinvestment Act, or Federal stimulus package, allotted another $2 billion in NSP funds, to be awarded competitively. NSP could provide an unique opportunity for governments in economic, social and environmental fronts.
