No single solution will repair the damage done by the lingering housing crisis. And “one-off” loan-by-loan solutions can’t happen fast enough to make an impact on the fragile housing stock that balances at a tipping point in cities across the country. Servicers and communities need a unified and comprehensive approach to address the broader needs of an entire targeted area—ideally those with properties valued in the $50,000 range.
Vacant properties valued at $50,000 present both a threat and an opportunity for the housing market. Left untended, these properties can quickly send a struggling neighborhood into a tailspin if damages strip what modest value they have. With swift and careful attention, they can spark a revitalization for first time homebuyers and lower income people.
A comprehensive approach that simultaneously addresses three main challenges is critical, and it’s needed now:
1. Identify and demolish unsalvageable properties. These low-value properties create a nuisance in neighborhoods across the country because they are vacant and abandoned and attract vandalism and other criminal activity. Because they are beyond repair, no one will invest in them or the properties surrounding them. Recovery cannot take place until the low-value, vacant and abandoned properties are demolished. Once they are demolished, the vacant land can be used for community gardens, parks or commercial development. Additionally, demolition will help protect the value of neighboring properties.
2. Rehabilitate vacant and abandoned properties that still have life. Private sector developers will invest in repairing or remodeling salvageable properties and either lease them or sell them to qualified homebuyers. Properties that do not require heavy remodeling can be sold “as is” to homeowners interested in “fixer-uppers.” This will create a new wave of affordable housing for people regardless of their economic background.
3. Keeping distressed homeowners in their properties is the most important step in a comprehensive approach to recovery. Providing homeowners with options to modify their loans or repair damages to their homes will reduce the number of vacant properties and restore property values in any community.
Once low-value vacant properties are demolished, salvageable ones are rehabbed and repaired, and distressed homeowners receive the necessary assistance to remain in their homes, the country can begin its journey on the road to recovery.
