The city looks to save distressed homes News, sports, jobs
The Altoona Redevelopment Authority is working on an agreement under which a local bank will forego a mortgage on a blighted home that was headed for foreclosure and slated for demolition — so the city can renovate it.
It’s the first attempt at what officials hope will set a model for saving blighted housing before it disappears for too long.
PennCrest Bank has informally agreed to forgo the mortgage as a charitable donation to the pilot project, officials said at Friday’s meeting.
Mortgage relief won’t happen until after the city takes possession of the property in the 1300 block of 21st Avenue from the owner, who is said to be willing to give it up to get out of the law and mortgage obligations, according to Authority and City Council member Ron Beatty. .
The house has “good bones,” but needs to be torn down and rebuilt with new utility systems, Beatty said.
It’s a bad house in a good neighborhood, which adds to the importance of the project, Beatty said.
The city will manage the 21st Street renovation, Beatty said, because the extensive work necessary means there won’t be enough “spread” between project costs and resale value to attract the private sector.
There are many other bad homes in good neighborhoods officials have identified that may be ripe for similar interventions, Beatty said.
With the help of recently passed state laws and the city’s new land bank, which is run by the same board as the Redevelopment Authority, the city plans to step in to prevent demolition when rehabilitation is possible, Beatty said.
The new policy is a correction to a policy the city has had for decades: using Community Development Block Grant funding to demolish buildings that the City Planning Commission has declared blighted, according to Beatty.
The blight declarations occur after the Department of Codes and Inspections reaches an impasse with that property.
Often, owners die without heirs or with heirs who don’t want to be bothered, Beatty said.
After demolition, the resulting vacant lots are usually saddled with liens, including a city lien for the cost of demolition, along with liens that accrue from city workers mowing the properties, Beatty said.
These concessions can discourage potential buyers who might be considering redevelopment.
He said demolition reduces the tax base. Rehabilitation builds it back up.
In cases where the profit is sufficient, Beatty said, it would be better for the city to shift the work to the private sector.
In some cases, the city may be able to make rehab profitable if it pays for preparatory work up front, such as remediating asbestos or lead, he said.
In other cases, churches, civic groups and nonprofits are enlisted by Councilman Dave Ellis to make modest repairs for homeowners who can’t afford them.
Likewise, title searches could enable the city to alert banks that hold mortgages on properties that run afoul of code management. Beatty said this could lead to banks taking action to protect their mortgage collateral and prevent further deterioration.
Banks can pay for strategic repairs, such as roofing, or foreclosure if necessary, he said.
Mortgage holders are obligated to maintain their property.
When a house becomes so damaged that it needs to be torn down, it’s not a win for the bank, as a vacant lot isn’t typically a big asset here, according to Beatty.
Notifying PennCrest about code enforcement efforts at the 21st Avenue property over the past four years might have prevented that home from falling into disrepair — and eased the burden on the codes department, Petty said.
Ultimately, Beatty wants to reclaim the position of executive director of the redevelopment authority/land bank, so that the professional can manage the types of activities he envisions.
“We’re trying to create a flexible system to save homes that need it,” Beatty said. “This (incident at the 21st Avenue home) is a potential experiment.”
Mirror staff writer William Kibler is at 814-949-7038.
(tags for translation) Local News (R) The city looks to save damaged homes