New York City Launches Better Way to Restore Foreclosed Homes

In a news conference held together with HUD Secretary Steven Preston, he said he will spend his city’s share of the HUD’s Neighborhood Stabilization Program to prevent what happened in the 1970s and 1980s when the housing crisis during those years filled the city with abandoned properties and blighted neighborhoods.

Bloomberg said he is going to solve the foreclosure problem differently this time. Instead of taking over foreclosed homes, which has been done by past administrations, he has chosen the nonprofit group Restored Homes Housing Development Fund Corporation to manage the rehabilitation.

The nonprofit will buy most of the 115 foreclosed properties, rehabilitate them with subsidies from the city and then sell them to families earning between $80,000 and $90,000 a year at prices that they can afford. Restores Homes was chosen because of its good record in the acquisition, rehabilitation and reselling of foreclosed houses previously owned by the federal government.

Most of the foreclosed homes that will be repaired are in South Jamaica, which is part of Queens, and in 12 other neighborhoods identified as the neediest and the places with the biggest number of foreclosed homes and adjustable-rate mortgages.

According to PropertyShark.com, New York City’s foreclosure rate increased by 50 percent from last year’s figures, with 12 of the top zip codes with the most foreclosures located in Queens.

The HUD money received by the city is part of the $54.5 million given to the state of New York to address New York foreclosures. According to RealtyTrac, New York State posted an increase in foreclosures by 29.3 percent from 2007 levels.

By Cassiano Travareli