BUFFALO, NY – In a month or so, the City of Buffalo will be embarking on a new affordable housing initiative.
Though in the works for most of the past year, its launch follows a series of 2 On Your Side original reports on how the city spent $5 million to renovate just 11 homes.
The program utilized grants from the U.S. Department of Housing and Urban Development (HUD).
Our stories regarding Buffalo’s renovation of abandoned, demolition worthy homes for hundreds of thousands of dollars, and then selling them for a fraction of the cost to low income, first-time homebuyers caught the attention of the HUD Regional Administrator (who then spoke to Mayor Byron Brown about it) and Congressman Brian Higgins, who vowed to investigate the matter.
The money was through a HUD program called HOME. However, there are a variety of ways those dollars can be spent, and not necessarily the way the City of Buffalo has.
Niagara Falls Helps Current Homeowners
Community Development Director Seth Piccirillo said he was familiar with the Buffalo program and said that the way the City of Niagara Falls uses its allotment of HUD dollars through the HOME program is indeed different.
“The way our program works is that homeowners can use the grants to renovate their homes,” said Piccirillo. “We work with them to eliminate code violations to set up things they want equity wise in their house. But we are capped at $32,500 per structure. That’s a hard cap, and so at no point do we ever exceed that dollar amount."
That also obviously means that Niagara Falls does not take on homes which are so far gone in their disrepair that they may need hundreds of thousands of dollars of work, as has been the case in Buffalo.
“$32,000 is not enough to renovate a vacant house in many situations, but there's also something called self-help where the owner makes a commitment to do renovations on their own before our money kicks in," Piccirillo said.
Another key difference, according to Piccirillo, is that rather than fixing homes and then hoping to attract a qualified buyer like in Buffalo, there is always a buyer already associated with the property.
“To put $100,000 into a structure before there’s a buyer or an owner…you’d have to make sure the market would support that, because in many cases you could build a brand new home for that amount.”
Buffalo Making Changes
Mayor Byron Brown continues to defend the expensive program which raised many eyebrows after it was detailed by 2 On Your Side beginning in March.
“Everything the city has done is within the guidelines of the federal program," Brown recently told us.
However, changes are coming in the way business is being done.
“We are thinking about a number of different approaches," Brown confirmed.
Chief among them will be a program which may allow the city to renovate up to three times as many homes for approximately half the money it had spent on the federally funded program.
Brown alluded to the new effort in his state of the city address early in the year, and is now providing additional details on the eve of the program’s formal launch this summer.
It will be primarily state funded, and according to Brown, will be unencumbered by some of the federal regulations which he claims drive up costs.
Perhaps most importantly, it will allow the city to acquire homes earlier in the foreclosure process.
“This will allow us to get to them before they become so dilapidated and before conditions become so adverse in a neighborhood,” he said.
Up until now, according to city officials, the city had to sell homes at foreclosure auctions to any bidder with enough to pay the back taxes - regardless of whether they had actual plans, or the money needed to rehab them.
Often times, they had neither the intent nor the means to do so, and so the homes would continue to rot as part of a seemingly never ending cycle of neglect.
The new program, according to sources, will allow the city to partner with an agency, such as the Land Bank which would have the status as a “super bidder, and be able to pluck targeted homes off the foreclosure list before they are auctioned to the general public.
The partner agency would come armed with state grants and a commitment to actually renovate the homes.
“Now that we have gotten permission from the state to do this, we have already been able to secure a number of homes which need much less repair from the foreclosure list, which we can then rehabilitate at less cost,” Brown said.