In July 2008, the Housing and Economic Recovery Act passed and included $3.9 billion for a Neighborhood Stabilization Program. State and local grantees have already submitted their initial plans to the U.S. Department of Housing and Urban Development as to how they will utilize those funds, but much planning and implementation work still needs to be done at the local level to make this program successful. While the funds are intended to buy up properties that are foreclosed and abandoned, a larger plan for re-envisioning communities needs to be developed around these funds. Besides the very large challenge of buying, rehabilitating and renting or selling foreclosed properties, there are other secondary consequences of foreclosures that must be addressed at the local level. How does a community help those who have lost their homes to foreclosure? How can localities help renters whose landlords have been foreclosed upon? How can localities pass ordinances that will stop properties from staying vacant too long?
In order for neighborhood stabilization plans to make an impact, the federal government must: 1. Supply additional dollars targeted to hard-hit communities in the upcoming economic stimulus package to rehabilitate foreclosed properties; 2. Provide assistance to help build the capacity of local groups to implement plans and forge partnerships with the private sector; and 3. Most importantly, develop a realistic strategy for reducing the number of foreclosures this year. If a large scale plan to mitigate the number of foreclosures that involves most mortgage servicers is not adopted soon, our communities will continue to suffer despite coordinated neighborhood stabilization efforts.
Sharon Price is NHC's director of policy. Price leads the National Neighborhood Stabilization Foreclosure Prevention Task Force, which is comprised of nearly sixty organizations dedicated to ending the housing crisis and stabilizing communities.