In a show of hope amid dour economic news, city officials and fair housing advocates celebrated a program Monday that they believe will boost one neighborhood ravaged by the mortgage crisis.
They also suggested that if the program is successful, it could be replicated with the help of some new federal grant money.
“This represents, really, our first effort in our neighborhood preservation strategy,” said Mayor Pro-Tem Susan Burgess, who called the initiative “one of the bright spots in our city today.”
The city is working with Self-Help, a Durham-based community development organization, on a $3.4 million effort to stabilize Peachtree Hills, a starter-home subdivision that has been one of the worst-hit by foreclosures. It's an unusual concept, housing experts say, and the city's boldest step yet to protect suburban communities from the side-effects of high foreclosure rates: elevated violent crime and vandalism, and plummeting property values.
Self-Help, which is paying for most of the project, aims to buy up to 25 bank-owned houses in Peachtree Hills and start a lease-purchase program for low-income buyers. As of Monday, the group had purchased eight homes, had one under contract and another two close to a deal, officials with the organization said. They have identified five strong candidates for the lease-purchase program out of a pool of about two dozen applicants.
“We are pretty confident we're going to do a good job and that this is going to be something that can be replicated across the state,” said Evan Covington Chavez, Self-Help's director of real estate development.
The city is contributing $449,000 for a range of improvements, including up to $10,000 per house for renovations, as well as lighting, sidewalks and landscaping in the neighborhood.
The lease-purchase program will include a strict screening process and homeowner counseling services. Officials hope it will build ownership and investment in the neighborhood, which is in one of 10 “hot spots” where foreclosures are concentrated in northeast Charlotte, according to an Observer analysis last year.
As of June, 42 of the 147 homes in Peachtree Hills had either gone through foreclosure or had been owned by a bank since 2003, according to county property records.
The goal of the effort is not to bail out those undergoing foreclosure, but to save existing residents from the damage caused by their neighbors' financial woes. Covington Chavez cited a study showing that when a bank forecloses on a house, all the homes within an eighth of a mile lose $5,000 in value.
Across the city, foreclosures numbered more than 8,000 this year and are expected to rise to 9,000 next year, said Stanley Watkins, Charlotte's neighborhood development director.
He said he would be talking with the City Council about applying for money the federal government has designated for rebuilding high-foreclosure neighborhoods. He said that Charlotte has access to $5.4 million, but must apply for it, following specific rules.
“There may be an opportunity through that particular program to take on different neighborhoods,” he said.