City, state announce blight elimination program<
By Jared Boyd
The Tennessee Housing Development Agency and Mayor A C Wharton held a press conference in front of a dilapidated home near Lamar and Semmes on Wednesday to announce a $6 million Blight Elimination Program.
The program allows nonprofits to use forgivable loans to purchase foreclosed, abandoned homes. The nonprofit organizations may then demolish these properties and turn them into community parks, affordable housing or other public spaces.
“You’re going to see that when it comes to neighborhood improvement, there really is such a thing as addition by subtraction,” said Ralph Perrey, executive director of the THDA.
“We think that Memphis will get the majority of the $6 million we can commit for that purpose. Obviously, there’s great need here, but Memphis has a head start,” Perrey said, adding that some eligible properties have been explored for areas in Knoxville and Chattanooga. “Because we’ve been working with the mayor and many others in city government, this is a city that has identified and mapped where a lot of these problem properties are.”
According to the City of Memphis there are approximately 350 to 450 properties in Memphis currently going through the process of condemnation.
“Fighting blight is key to fighting crime,” Wharton said at the podium. “You know that. You don’t have to be a criminologist to understand the correlation between blighted structures and crime.”
He cited the arrest this week of Jimmy Lee Woods, who is accused of sexually assaulting a woman on the porch of a vacant building.
Starting Nov. 1, nonprofit organizations with a history of successful construction and housing development activities may apply for program loans up to $25,000. The city says that applications must include a specific plan for each acquisition for eligible property, as well as expenses and a list of licensed, bonded and insured contractors and subcontractors.
State Rep. Raumesh Akbari and District 4 council member Wanda Halbert stood beside Wharton as he made his statement on the project.
“I have neighborhood groups, I have churches, I have community leaders, their constant complaint is, ‘We have houses that are well taken care of on one side and the other side looks like a war zone. How are we supposed to keep crime out of our neighborhoods? How are we supposed to maintain our property values when we have these abandoned pieces of property that are bringing us down, despite our best efforts?’” Akbari said.
Minutes later a construction company began demolition of a house just behind the press conference in a residential area at Lounette Street and Wildrose.
“I’m excited that we’re standing in District 4,” Halbert said. “This is part of an area that very few would venture into. You think about all the other areas that are similar to this, and we’re venturing into them to make sure that we let these residents know that we know these problems exist, and we’re here to do something about it.”
Sheila Jordan-Cunningham works with Neighborhood Preservation Inc., a nonprofit interested in developing a property under the program. “A lot of these houses, you could buy for $10-20,000. If you can get the property cleared and back on the tax rolls, then you can get income coming back in to the state and city again,” she said.
“You have the ability now for a developer to come in and develop that property. So, it clears away a lot of the road blocks.”
Girtha Phillips, who lives near the now-demolished home, said that a family lived there for nearly four years until a fire last February. Since then, she said it has been an eyesore, an attraction for crime and a dumping site for visitors. “That’s wonderful if they’re getting rid of all these vacant houses,” she said.
THDA will issue a short-term Phase 1 loan with zero interest to a nonprofit on the front end of the project. THDA has allocated $1 million for such loans.
After the site’s construction, the U.S. Department of Treasury authorizes THDA to issue a Phase 2 loan which allows the nonprofit to pay off the Phase 1 loan, so the state can reissue funds to other nonprofits. Phase 2 loans will come from money recaptured from THDA’s federally funded foreclosure prevention program, the Hardest Hit Fund.
Nonprofits are required to maintain the property for three years. Phase 2 loans will then be completely forgiven. They may be forgiven earlier if affordable housing is built on the property.
Potential properties for the program must be located in targeted areas identified by high vacancy, among other criteria.
Wharton said this program will work in conjunction with the city’s Blueprint for Prosperity, which sets a goal to reduce poverty by 10 percentage points in 10 years. He thanked Gov. Bill Haslam for his quick response to his initiative after a meeting with the state a few months ago.
“At that time, some of the cynics and the skeptics said, ‘The governor’s just talking. Where’s the beef?’” Wharton said. “Folks, I think $6 million is a hell of a lot of beef.”
The program will continue until the end of 2017, or until the $6 million is depleted, Perry said.
This article originally appeared in the August 5, 2015 edition of the Commercial Appeal.