10 yrs after US housing crash, remnants accompany recovery

0

NEWBURGH: Boarded-up homes became a ubiquitous symbol of the US housing crash, with once-prosperous neighborhoods left to decay as mortgage defaults soared and no new buyers emerged.

Advertisements

Some 10 years later, the national picture has improved and many places have boomed. Although the bricks and mortar of abandoned properties scar the streets of many states, suitors are lining up in some places where tumbleweed long ago outgrew the market.

Newburgh, in the Hudson Valley two hours north of New York City, is a minnow compared to cities in Florida and California that fell apart when the subprime mortgage bubble burst, culminating in a global recession.

The once thriving area of 30,000 people succumbed to rising interest rates, falling prices and local tax hikes all the same. Many families upped sticks without warning in 2007-08.

Rows of vacant properties remain, but Newburgh is on the up.

“It hit Newburgh particularly hard,” says Stuart Sachs, an artist originally from Brooklyn, who bought a home close to his new city’s main drag 14 years ago.

“Before the great recession most of these buildings were inhabited. All of them, from here to the corner, have been seized, which is truly terrible.”

More than 700 homes are still empty — about 10 percent of those in the town. Leaks, fire risks and rising crime exemplify the vast collateral damage.

To make matters worse, about 200 properties are so-called “zombie” homes, which are not only vacant, but have no real owner and sit in limbo.

Banks may have already started the long, drawn-out foreclosure process, but are yet to take ownership. Unattended, the homes fall into disrepair and are no longer habitable, a deadweight on a fully-fledged revival.

“Very often the banks start the process and realize that they’re going to make less by selling the house,” explains Helene Caloir, director of the New York State Housing Stabilization Fund.

“They don’t really have an incentive to finish. They’re in foreclosure but it never gets resolved.”

The city is leading a revitalization effort to fight the vacant home problem, with the help of subsidies managed by Local Initiatives Support Corporation, a non-profit organization.

A hipster haven?

The cash comes from banks who reached a deal with the state attorney general’s office to cope with the after-effects of the crisis and avoid prosecution.

Newburgh city hall and Newburgh Community Land Bank, an independent but subsidized local entity, are working together. The city currently owns about 150 of the vacant properties and the bank around 80.

Together they are trying to breathe life back into the abandoned streets and put the empty homes back on the market.

Newburgh Community Land Bank has already sold 60 of its homes to buyers whose finances have been thoroughly investigated, says executive director Madeline Fletcher.

A few have been bought by people wanting to live in them, but most by investors, private companies or non-profit organizations. In 80 percent of those cases, investors charge moderate rents in exchange for a low purchase price.

“We feel that it’s also part of our role to ensure that people here have opportunity that their quality of life improves,” says Fletcher.

Fortunes can change quickly. Hipsters are starting to appear in Newburgh.

While the city suffered job losses from a decline in manufacturing, new interest is drawn by the area’s architectural riches and pretty — if old — brick homes.

“Every weekend we do get people in here from Brooklyn that can’t believe they can buy a townhouse for $40,000,” says Mikey Jackson, co-owner of the 2 Alices cafe, which he opened three years ago.

“Business has been good. It’s been growing,” he says. “There’s a very fancy restaurant, a couple of hip bars.”

‘Killing zombies’

The average price for a home in Brooklyn is almost $1-million.

But Fletcher wants to avoid the rampant gentrification that transformed the New York borough, even if the brick
homes are similar.

“I started in 1981 and this is the first time it’s going in the right direction,” says William Horton, deputy head of the fire department called out to a number of blazes at abandoned homes.

But the difficulty remains trying to track down whoever could claim ownership of the “zombie” homes.

The city hall has created the role of investigator, a first, who scours every avenue, through the courts or online, for the name of a lawyer who could be a starting point, says city planner Alexandra Church.

“Killing zombies in Newburgh is the same as in ‘The Walking Dead,” she says, drawing a comparison with the popular television series. “You literally try every tool that you have.”

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.