Tuesday, Aug. 4, 2009 | 2 a.m.
- County, cities hammer out plans for foreclosure funds (6-16-2009)
- For lasting stimulus, parties have to play nice (4-6-2009)
- North Las Vegas eyes foreclosure solution (11-14-2008)
- Federal money might help fill valley’s empty houses (9-30-2008)
- Feds send $72 million to region to fight foreclosure (9-26-2008)
Area municipalities have banded together to create an unprecedented proposal to use nearly $370 million in federal money to help set right neighborhoods across the valley reeling from the foreclosure crisis.
If the federal government approves the grant, it would be the largest amount of money local governments have ever spent at one time on the issue of housing, experts said. The level of collaboration among Clark County, Las Vegas, North Las Vegas and Henderson also sets the project apart, they added.
Through rent or ownership, the proposal aims to put families in 4,200 abandoned or foreclosed houses. It focuses on neighborhoods that received the worst possible score in a federal system for rating the impact of foreclosures.
Mike Pawlak, who oversees the county’s community resources management division, called the plan “unique and exceptional,” adding, “you’re not going to see this again.”
Pawlak’s agency applied July 17 for the Housing and Urban Development money, but the federal agency may take until October to respond, he said.
The county would be the lead agency on the project but each municipality has put in for a share. Local governments will then pass most of the money along to nonprofit organizations. Across the valley, the largest amount — $133 million, or 36 percent of the total — would go to buying and fixing houses for rent. Another 27 percent would buy and fix houses for resale to families earning up to 120 percent of the area median income, or $76,680.
Mike Mullin, president of Nevada HAND, a nonprofit organization that builds affordable housing, said the $370 million plan is also unique because of the time frame in which it must be completed — three years. The money would come from the second round of a program known as Neighborhood Stabilization, a precursor to the stimulus. The first round was not competitive and brought about $64 million to the valley, money that arrived in March and must be spent within 18 months on projects similar to the ones described in the current proposal.
Normally, Mullin noted, new federal funding programs such as these can take up to three years just to roll out. But the dizzying foreclosure and unemployment rates have forced the government to tighten those timelines.
The challenge, Mullin said, is “how to get the money out on the street without doing something dumb or ineffective.” His agency will apply for some of the funds.
Pawlak said another challenge will be to stay ahead of the market curve driven by the checkbooks of investors, as they swoop into the valley to take advantage of prices from a decade ago. One stipulation of the federal program is that houses must be purchased for less than the appraised price. This may be hard, Pawlak said, if local governments find themselves “competing against pools of investors making offers.” He said 40 percent to 60 percent of the recent record sales of previously occupied houses — 4,700 in June — may be due to investors.
The key, Mullin said, may be getting banks to work with local governments, allowing agencies participating in the grant-funded project a “first look.”
Dan Goulet, president of the United Way of Southern Nevada, said this $370 million-dollar effort wouldn’t only affect real estate. Families in precarious housing situations need more help with other issues, such as stress and joblessness. So helping them secure housing “will help drive down the needs of families for other services.”
Pawlak said having all the pieces work together — private-sector banks, nonprofit organizations and local governments — is key to meeting a vital goal: “helping the hardest-hit, most distressed areas of the valley, so they can be up to par when the rest of the valley recovers.”