Tomorrow night, Wednesday Jan. 14th, the Fayette County Commission is holding a special public hearing on the "Neighborhood Stabilization Program". I hope that at least a few of our concerned citizens will take the time to go to the meeting and ask questions.
Here's an overview of the program:
The Neighborhood Stabilization Program (NSP) is an emergency assistance fund
authorized under Title III of Division B, section 2301 of the Housing and Economic Recovery Act of 2008 (HERA) that is being provided for the redevelopment of abandoned and foreclosed homes and residential properties for the purpose of stabilizing neighborhoods. Unless HERA provides otherwise, the grant is considered a special Community Development Block Grant (CDBG) allocation.
Sounds OK, doesn't it? Basically, the government is going to give Fayette County funds to redevelop abandoned or foreclosed homes.
Unfortunately, long experience has told me that with the government, there's usually a nasty string or two attached, so I pulled up the six-page "Housing and Economic Recovery Act of 2008" that deals with the NSP.
There is at least one potential nasty string that's attached to the NSP: Not less than 25% of funds available to each grantee must be used for housing activities that benefit individuals whose incomes do not exceed 50% of area median income and that all funds be used to benefit individuals at or below 120% of area median income."
Click here to read the Guide to Neighborhood Stabilization Program Eligible Uses
If I'm understanding what I'm reading correctly, the government is going to require that at least 25% of the foreclosed or abandoned homes be sold or rented to people who make less than 50% of the median income of their neighbors.
Call me crazy, but isn't that how we got into this mess with foreclosed homes to begin with? People who couldn't afford to buy the houses they wanted got great deals, then couldn't make the payments?
I can understand the 120% requirement. The government doesn't want speculators and investors to buy up all these great deals just so they can flip them and make money.
In addition to my concern about potentially putting people into houses they can't afford, I don't particularly care for the idea of having our government sticking its fingers into forcing upward mobility. I don't know what my neighbors make and don't want to know. Maybe they bought down, maybe they opted to buy less house so they could spend more on vacations. Who knows and who cares.
Here's a hypothetical situation: Say there's a house in Whitewater or a similar neighborhood that I covet. If I could figure out a way to buy it, I'd be there in a heartbeat. However, for the sake of argument, let's say my income is 40% of the median income of the neighborhood. Then, continuing the scenario, "my house" goes into foreclosure and all of a sudden I can buy the house with the help of the NSP. Wow. Great deal, huh?
But then I have to buy furniture. I have a huge power bill. I have neighborhood dues I have to pay. The pipes freeze and burst. The hot water heater goes out. I have to pay for lawn service because I'm working and can't keep up the grooming. The lake behind the house overflows into the yard ruining the landscaping. You get the idea, it's more house than I might could afford, even though the monthly payment is well within my ability to pay.
Pretty soon I'm wondering how I got myself into this mess.
I don't know enough about the details of the program, even after reading the Act and looking at other counties and states who've grabbed the funds. I'm not sure that someone who couldn't afford neighborhood dues, insurance, lawn service, etc. as I hypothesized above would be allowed to buy the home.
And, I don't know what will happen when Fayette County takes the money, if they ultimately decide to do so. I "assume" that since they're holding the public hearing tomorrow night, they've pretty much decided to go for it.
In past years Fayette County has stayed away from holding their hand out to the government. We've been very, very selective about the programs we've bought into. I hope we're not looking at short-term gain to the detriment of the long-term quality of our county.
The HUD Official Documentation: Housing and Economic Recovery Act of 2008
Minnesota's explanation / write up: http://www.mnhousing.gov/idc/groups/homes/documents/webcontent/mhfa_007646.pdf
PUBLIC NOTICE FOR A SPECIAL CALLED PUBLIC HEARING
THE FAYETTE COUNTY BOARD OF COMMISSIONERS WILL HOLD A SPECIAL CALLED PUBLIC HEARING AT 7 PM ON JANUARY 14th, 2009, IN THE PUBLIC MEETING ROOM OF THE FAYETTE COUNTY ADMINISTRATIVE COMPLEX LOCATED AT 140 STONEWALL AVENUE WEST, IN FAYETTEVILLE. THE PURPOSE OF THIS HEARING IS TO RECEIVE COMMENTS REGARDING THE NEIGHBORHOOD STABILIZATION PROGRAM (TITLE III, SECTION 2301 OF THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 (HERA).