Renovations progressing on county-purchased foreclosed homes
A look at how work is progressing with 20 bought
Published: Sunday, January 16, 2011 at 3:38 p.m.
Last Modified: Sunday, January 16, 2011 at 3:38 p.m.
In a northeast Gainesville neighborhood, three homes in varying states of repair stand within a few blocks of one another.
On the 2900 block of Northeast 11th Terrace, construction workers were laying tile at a home in the midst of renovation. One block north, there's a home that still has the old crank-out windows. Inside, piles of wood and insulation cover areas of the floor. To the east, a home on the 3100 block of Northeast 12th Street stands renovated with visible changes that include new floors, tile, cabinets, doors and a rebuilt screen porch.
The homes have one thing in common: Each was purchased out of foreclosure by Alachua County with money from the federal Neighborhood Stabilization Program. Rooted in the Housing and Economic Recovery Act of 2008, which former President George W. Bush signed into law in July of that year, the program allocated more than $3.9 billion nationwide for the purchase, renovation and resale or rental of homes nationwide in neighborhoods where U.S. Department of Housing and Urban Development statistics showed high levels of foreclosures.
The intent, said Tom Webster, Alachua County's housing programs manager, is to "stabilize" neighborhoods by fixing up abandoned properties that could become an eyesore or pose health or code enforcement issues.
The county received approximately $2.9 million through the program in the spring after a slow process of money being first disbursed from the federal government to the states and then, in Florida, from the Department of Community Affairs to eligible governments.
Of Alachua County's allotment, nearly $1.84 million has gone toward the purchase of 20 homes. Fifteen of them have Gainesville addresses, including nine in northeast Gainesville. Four have city of Alachua addresses and one is in Hawthorne.
Under the federal program's rules, all purchase prices had to be below appraised value. The rehabilitation costs, in many cases, have been substantial. For example, the home in the 3000 block of Northeast 11th Terrace was purchased for $51,480, more than 20 percent below appraised value. The budget for rehab work, including a 20 percent contingency for change orders, eclipses the purchase price at $63,940. Some items in the contractor's work order for that home included a brand new roof, drywall and ceiling repairs through much of the house, new tubs, sinks, toilets and showers in the bathrooms, new floors, doors, energy-efficient windows, electrical and plumbing upgrades, a new water heater, washer, dryer, and air conditioning and heating units.
For a home on the 1400 Block of Northeast 20th Avenue, county commissioners approved a change order last Tuesday that more than doubled the contract amount with the private firm doing the work from the original $36,331 to $74,789. Because of mold and mildew damage from a roof leak, the entire inside of the home had to be gutted essentially "down to the studs," Webster said.
He said that because the county only had a matter of months to purchase homes — money had to be spent by Sept. 1 — and had to buy in specific ZIP codes, the full extent of renovations necessary often were not known at the time of acquisition. Given the substantial amount of work some homes needed and the associated costs, Webster believed the private sector would have considered them unsalvageable and they would have eventually have become a code enforcement issue.
In total, the rehabilitation budget for 18 homes is in excess of $760,000. Contracts on two homes have yet to be awarded because it's unclear if there will be grant money left over. Otherwise, Webster said the county plans to put money from the sale of nine of the homes to low- to moderate-income home buyers into that work and potentially additional purchases.
Beyond purchase and rehab costs, consulting firm Meridian Community Services Group receives 6.8 percent of the grant funds, approximately $192,000, to administer the program.
County Commissioner Susan Baird believed the entire program had "good intentions" but could bring "unintended consequences." Her concerns were that government's entry into the marketplace could lead to competition with private citizens who were struggling to sell their homes in the down economy or leave the county responsible for the homes' upkeep if they do not sell in a timely fashion.
The plan is to have 11 homes used as low-income rental properties with six deeded to the Alachua County Housing Authority, which nearly cut its ties with the program in April because of a lack of control over the purchase of homes and the selection of contractors.
ACHA Executive Director Gail Monahan on Friday expressed frustration that nonprofit organization had not yet been given the homes it would rent out and questioned if county government would indeed be able to sell the homes it owned.
Webster said those sales will be handled through area Realtors and the program required fixed-rate financing.
Meanwhile, a DCA audit of the county's progress released in December and based on a site visit in October reported no areas of concern with the county's financial management, acquisition procedures or the program administration.
Contact Christopher Curry at 374-5088 or firstname.lastname@example.org.