CDC's line up to buy foreclosed properties
Boston's community development corporations (CDCs) were on the forefront of rejuvenating city neighborhoods in the 1970s, 80s, and 90s, and the push is on to innovate new tactics to address the foreclosure crisis.
Dorchester and Mattapan's CDCs are gearing up to take advantage of millions of dollars in new federal funding designated for turning foreclosed properties into rentals and affordable home-ownership opportunities, and the challenges are many.
On Hendry Street, Boston's poster-neighborhood for the foreclosure crisis, the city turned down the Dorchester Bay Economic Development Corporation, a CDC, and awarded Bilt-Rite Construction, a private developer, the right to redevelop and sell four three-deckers to owner-occupants. The lost opportunity for Dorchester Bay highlighted the competition CDC's will face from the private sector as they move into the foreclosure rehab arena.
But in the last six months or so Dorchester Bay, as well as Codman Square NDC, Nuestra Communidad, Mattapan CDC and others have been meeting with the Department of Neighborhood Development to stake out territory and describe their goals for rehabbing the foreclosed and bank-owned properties.
The CDCs proposals are expected as early as this week.
"We're just starting now to go look at some properties," said Spencer DeShields, executive director of Mattapan CDC. "We have a foreclosure initiative so we don't end up with blighted neighborhoods."
The U.S. Department of Housing and Urban Development recently doled out $54.8 million to the state to address the foreclosed properties, with $4.2 million for Boston and $43.4 million directly to the state to be sent to the areas most in need. Earlier this year, the Massachusetts Housing Investment Corp. and the quasi-public Mass. Housing Partnership also designated $17 million for such projects.
The city's Department of Neighborhood Development wants to help streamline the way in which the federal money will be used by giving a 'rubber stamp' to the game plans each CDC proposes. This way, the non-profits can avoid going through lengthy applications to fund each individual house they buy and other funders will know that DND backs the CDCs' general plans. This pre-approval of sorts will also help secure funding in a timely fashion.
To aid the process, the city may even help CDCs and other groups, such as Habitat for Humanity, negotiate with the banks that own foreclosed properties, said Evelyn Friedman, director of DND.
"The city is hoping that most of this stuff would go back to homeownership," said Friedman. "But we recognize because of the current climate for buyers that some of the property will be held as rental property."
Despite the low prices some properties are going for in certain areas of Dorchester, Friedman said rehabbing them would not likely be a windfall for CDCs. Because the amount of documentation CDCs must produce to satisfy their federal, state and city funders, and the difficulty of managing many small properties instead of large multi-unit buildings, they may be lucky to just break even.
"They'll be looking at the long-term for their neighborhoods," she said.
As the proposals from the CDCs roll in this month, so will regulations on how the HUD money can be used. The city will then have 18 months to spend it.
Over 1000 foreclosure deeds have been recorded in Boston so far this year, according to the Suffolk Registry of Deeds, nearly double the amount for the same period in 2007.