Local Video
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| From foreclosed to first-rate |
By: DAVID HENKE, Staff Writer
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Posted: Saturday, October 17, 2009 12:39 am
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A home in your neighborhood goes into foreclosure.
The occupants move out, the lawn grows too long and the leaves are left where they lie. Before too long, the home falls into disrepair and becomes an eyesore.
Then nearby property values begin to drop.
It’s called neighborhood destabilization, and these days, it’s not uncommon, thanks to the collapse of the housing market and the subsequent rash of home foreclosures — including approximately 236 foreclosures in Rice County in the first nine months of 2009.
Three Rivers Community Action, Inc., a Zumbrota-based nonprofit group that primarily serves low-income families, hopes to head destabilization off at the pass. The group is rehabilitating 20 vacant homes in southeastern Minnesota — including five in Northfield — with up to $50,000 of energy-efficient, environmentally friendly features as part of their Home Matters project. Once the renovations are done, the nonprofit will resell them at their appraised value to low-income buyers, using zero-interest deferred loans, downpayment assistance and gap financing to make the homes more accessible to qualifying buyers.
“These homes tend to be the ones in rather rough shape,” said Three Rivers Community Development Director Jennifer Larson. “We’re going to fix these things, and we’re going to turn them into an asset for the neighborhood.”
Three Rivers, working in collaboration with the Northfield Housing & Redevelopment Authority and RENew Northfield, among other partners, has already gutted one property, a foreclosure at 311 Cherry St., and plans to turn it into a model home. By next spring, the home will be outfitted with a new windows, low-flow shower heads, an air-source heat pump, an energy efficient furnace and a solar-powered water heater and numerous other renovations.
Not all those features will make it into the other renovated properties, Larson and project manager Barbara Dolan said. But up to $50,000 worth of green renovations, like new insulation and energy-efficient appliances, will go a long way toward reducing utility payments.
That, in turn, will make the homes more affordable for low-income families in the long-term, and reduce the ikelihood of another foreclosure, Larson said.
“If you look at projections for energy costs in the future, it’s going to go up very quickly,” RENew Northfield board member Charlie Stark said. “If you reduce the amount you use and can afford energy efficient appliances up front, your payments will stay much flatter.”
The homes, Larson added, will also be healthier places to live. As part of the renovations, Three Rivers will remove much of the carpeting — which can trap allergens and chemicals —from the homes. It will also install improved air exchange systems and use paint with a low level of volatile organic compounds, known to cause eye, nose, and throat irritation and damage to the liver, kidney, and central nervous system. Three Rivers will also make aesthetic renovations to the interior and exterior of the homes.
Converting empty foreclosures into occupied and renovated homes can have a substantial impact on a neighborhood, said Northfield Housing Manager Michele Merxbauer. Vacant homes, Merxbauer said, become a magnet for potential crime and break-ins and a haven for animals. Homes that are unoccupied also fall into disrepair faster, Merxbauer said.
Both factors can drag neighborhood property values down substantially, Merxbauer added.
In addition to the model home, Three Rivers has already purchased a second property at 400 Eighth St. West. Eventually, the model home will be sold to a low-income family, along with the other five Three Rivers is rehabilitating in town.
The first homes in Northfield could be available for families in early 2010, Larson said. Other foreclosed homes will be rehabilitated in Rochester, Zumbrota, Faribault and Montgomery.
Three Rivers will only sell the home to families or individuals at or below 80 percent of the state median annual income. For a family of four, Dolan said, that amount is $58,400.
In order to purchase one of the rehabilitated foreclosures, potential purchasers will also have to take a home buyer’s education class.
“It’s not just about the construction, but it’s about the families that are moving in there and doing everything we can to make them successful,” Larson said.”
— David Henke covers city, business and youth issues. He can be reached at dhenke@northfieldnews.com or 645-1100.
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8RICE COUNTY HOME FORECLOSURES
2005: 74
2006: 150
2007: 237
2008: 298
So far in 2009: 236
— source: Rice County Sheriff’s Department |
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