Three Capital Region communities will receive more than $6 million in federal grants to purchase, renovate and resell homes shuttered by the foreclosure and subprime mortgage crises, Gov. David Paterson announced.
Albany will receive $5 million to target 57 housing units in the Arbor Hill neighborhood. Schenectady will receive $935,000 for projects in the Vale and Hamilton Hill neighborhoods and Troy will get $53,000 to fix up 13 units in the Griswold Heights housing project.
Paterson announced grants totaling $59 million for 29 projects across the state at a news conference on Long Island. The money is part of $100 million in Neighborhood Stabilization Program funds the state received through the U.S. Department of Housing and Urban Development.
Schenectady Mayor Brian Stratton said the city plans to build three or four energy-efficient homes under the program. “This is a program where we demolish blighted houses and replace them with green, affordable, state-of-the-art homes,” he said.
The city already has built and sold three homes under the city’s Universal Green Affordable Housing Program and has 10 more under construction. Stratton said the latest grant will bring the total to 16 to 17 homes.
“These are wonderful, award-winning homes,” Stratton said. The homes have received platinum LEED and ENERGY STAR designation. The city sells the homes to households earning no more than $63,280 for a family of four, though it is expected that the homes will be targeted for households earning slightly under the income ceiling. Applicants will be selected on a first-come basis.
Albany plans to purchase and rehabilitate five single-family and five two-family structures in Arbor Hill and create a rental housing program involving 17 abandoned and foreclosed properties containing 47 units.
Ellie Pepper, assistant director for Better Neighborhoods Incorporated in Schenectady, which is working with the city to build the new homes, said the Vale and Hamilton Hill neighborhoods are the lowest income areas in the county. The Hamilton Hill area in particular is especially hard-hit by foreclosures.
Citing statistics from the New York Federal Reserve, Pepper said approximately 30 percent of owner-occupied and nonowner-occupied homes in Hamilton Hill were in foreclosure or 90 days past due on paying their mortgages in 2007. In the 12306 ZIP code, near Princetown and Curry roads, by contrast, the percentage was about 6 percent for 2007, she said.
This percentage could be even higher in Hamilton Hill this year, as approximately 15 adjustable rate mortgages in the neighborhood were scheduled to reset, and ARM rates never go down, Pepper said.
Harold Miller, ACORN’s upstate director, said low-income families, such as those who live in Vale and Hamilton Hill, are sensitive to changes in their mortgage rates. “Predatory lending has been affecting poor communities for 10-plus years,” he said. “You have families who bought homes with ARMs, or at bad rates, and when the economy soured, they were the first to be affected. When rates change and when someone is poor, it is harder for them to pay,” Miller said.
Phil Lentz of NYHOMES, a state agency administering the federal grants, said communities will use the money to buy abandoned homes from lenders, renovate them and sell them to low- and moderate-income families. They may also use the money to subsidize the purchase price for these buyers, he said.
“The neighborhoods most affected are working-class neighborhoods, neighborhoods of color. They are sometimes called emerging neighborhoods. We have spent years building them up and now they are threatened by the foreclosures,” Lentz said. “We can’t help the people who have already lost their homes, but we can try to help the neighborhoods where these people live.”
Paterson said, “The shuttering of homes has devastated too many of our communities, but with these awards through the Neighborhood Stabilization Program, we have the opportunity to revitalize New York’s villages, towns and cities.”
Miller said ACORN supports the Neighborhood Stabilization Program but that it should also include an education component. “We think it is a good thing as long as low-income families go into counseling and learn how to manage the process of owning a home,” he said.
Lentz said communities should start receiving the federal money in a couple of months. The state is also providing more than $30 million to local nonprofit organizations to provide foreclosure prevention services, for consumer credit counseling and legal services and to provide counseling and legal assistance to homeowners at risk of foreclosure.
The federal government will provide additional grants through the Neighborhood Stabilization Program later this year.