NEIGHBORS INVEST IN BROADWAY. Neighbors Invest in Broadway: A Slavic Village Renovation Program

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Ernest Terry
5 years ago
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1 NEIGHBORS INVEST IN BROADWAY Neighbors Invest in Broadway: A Slavic Village Renovation Program

2 Broadway Slavic Village Housing Market SUB-PRIME EPICENTER = 1,200 VACANT HOMES IN SLAVIC VILLAGE TODAY

CHALLENGES WITH PAST PROGRAMS Tax credits are extremely competitive Full gut rehabs sold at market rate have required up to an overwhelming $90,000 in subsidy per home Heavy federal subsidy (like

3 CHALLENGES WITH PAST PROGRAMS Tax credits are extremely competitive Full gut rehabs sold at market rate have required up to an overwhelming $90,000 in subsidy per home Heavy federal subsidy (like NSP) is not available. Weak market makes sales and financing (appraisals) of high end rehab difficult Many buyers cannot afford, cannot qualify for, or don t want to be saddled with more expensive homes

4 SVD S VARIETY OF HOUSING PRODUCT TODAY TRAILSIDE HOMES: 90 unit new development, top of market, moderate income, Project Cost: $110,000 per home SLAVIC VILLAGE RECOVERY: 200 moderate plus rehabs, affordable homeownership, Project Cost: $55,000 per home NEIGHBORS INVEST IN BROADWAY: 40 homes (and ongoing), code to code plus standard, Project cost: $35,000 per home

5 NOT EVERYONE WANTS A FULLY REHABBED HOME. Do-It-Yourselfers revealed themselves as a missed target market in Slavic Village. Could we provide homeownership opportunities that didn t cost over $100,000? How to cut costs but ensure the scope of work continues to meet our standards?

6 NEIGHBORS INVEST IN BROADWAY: THE IDEA Use low value, lightly distressed homes as an opportunity for truly affordable homeownership. Use sweat equity to keep rehab costs down. The goal? House payments as low as $250 a month!

7 CONT Encourage Do-ityourselfers, or contractors in the family Can accommodate the cash but no credit situation. Scope of work is bring the home up to decent, safe and sanitary condition.

8 BUT HOW DOES IT WORK? We offer homes as cheaply as possible to motivated buyers ready to invest sweat equity and cash. In the event a buyer has good credit, purchase-rehab loans are encouraged. Market these homes via list, our CDC & neighborhood papers, and our website Use deed restrictions to keep the buyers on track after closing.

9 DEED RESTRICTIONS: HOW DO THEY WORK? Breach clause SVD has the option to take back the home in the event the contract terms are breached. Repairs are completed and inspected. A Certificate of Occupancy is acquired, and deed restrictions are satisfied and released.

10 WHERE DO WE GET OUR HOMES? Donations are key. The sources are: private owners, REO s, HUD, and the County Land Bank. Low cost means low risk Fall Back Strategy Identified: If a home doesn t sell, gut rehab or demo may be the right answer.

11 KNOW YOUR MARKET Determining Market is Key Examples: Enjoys Urban Environment Do-It-Yourselfers Connections to Neighborhood Local Workers Credit Issues

12 BUYERS MUST AGREE TO: Provide proof of funds (this can be a loan if they qualify) Bring the property up to code per specs written by a third party spec writer Deed restrictions A time of performance

13 BUYERS MUST AGREE TO: (CONTINUED ) Accept the house as is.. Pull all necessary permits Use licensed contractors when required Occupy the home for at least 3 years.

14 EXAMPLE 1

15 EXAMPLE 2

16 EXAMPLE 3

17 NIB RESULTS (IN 4 YEARS) 44 Homes acquired, 37 homes completed 22 new owner occupants, 9 investors from the neighborhood, 4 additional reputable developers

18 NIB RESULTS CONT Average Sale Price: $5,000 (up from $3,000 in year 1) Average Estimated Repairs: $45,000 Average Actual Repairs: $30,000 Average Sweat Equity Savings: $15,000 Average Total Project Cost: $36,000

19 ADVANTAGES No subsidy needed! Creates truly affordable homeownership Provides an opportunity for cash no credit buyers Brings homes up to code Another tool available to help get houses fixed up and occupied.

20 OTHER RESULTS A moderate rehab standard paired with sweat equity equals TRULY AFFORDABLE HOMEOWNERSHIP Vacant home returned to productive use Less waste and more recycling of materials than the gut rehab model Creates new homeownership and pride in community Opens up opportunities to target market previously unqualified

21 NEIGHBORS INVEST IN BROADWAY Neighbors Invest in Broadway: A Slavic Village Renovation Program Thank you!

NSP Program Overview. Daniel Blanchard COJ Management Consultant

NSP Program Overview. Daniel Blanchard COJ Management Consultant NSP Program Overview Daniel Blanchard COJ Management Consultant 904 237 7781 daniel.blanchard@comcast.net NSP Basics Neighborhood Stabilization Program Housing Economic and Recovery ACT of 2008 (HERA)