$1M on way to tackle urban blight

SANDUSKY Neighborhood eyesores will soon get some salve. Sandusky, plagued with 240 a
Tom Jackson
May 24, 2010

SANDUSKY

Neighborhood eyesores will soon get some salve.

Sandusky, plagued with 240 abandoned houses, and Erie County, hit hard by the mortgage foreclosure crisis, are getting help from Washington D.C.

The housing crisis bill President George Bush signed last week will send about $1 million to Erie County to help local governments rescue neighborhoods by restoring or tearing down homes abandoned by residents who couldn't keep up with their loan terms.

Erie County is supposed to receive the money in about three months, with much of it expected to be earmarked for Sandusky.

The Housing and Economic Recovery Act of 2008, as the bill was dubbed, also provides $15 billion in tax breaks, including a $7,500 tax credit for first-time home buyers.

U.S. Sen. Sherrod Brown, D-Ohio, has called particular attention to the neighborhood stabilization projects money, which allows local governments to buy, renovate or tear down foreclosed homes. Critics of the program have said it uses taxpayer money to bail out imprudent lenders.

Brown's office estimates Ohio will get about $150 million of the money, with about $943,000 going to Erie County, $768,000 to Huron County and $376,000 to Ottawa County.

Those aren't official numbers, cautions Brown's spokeswoman, Meghan Dubyak, but are the office's best effort to estimate the money that will become available under the bill.

The neighborhood stabilization projects money will be distributed through the U.S. Department of Housing and Urban Development's existing Community Development Block Grant program.

That means the existing organizations that receive CDBG money will receive the new funds, said Brian Sullivan, a HUD spokesman.

Two organizations in Erie County receive CDBG grants: Sandusky and Erie County. Last year, Sandusky got $804,000 in CDBG money, while Erie County got $176,000.

Congress put $3.91 billion into the program with the bill and ordered HUD to use three criteria for figuring out how to distribute the money: The number of foreclosures in each area, the number of subprime mortgages and the number of loan defaults and delinquencies.

Congress told HUD to figure out the formula in 60 days and award the grants in another 30 days.

"In 60 days you'll know how much," Sullivan said. "In 90 days the money hits the street."

Carrie Handy, chief planner for Sandusky, said she's been trying to get more details about the program. She printed a copy of the housing bill last week and gave it to city manager Matt Kline.

Handy said she thinks it's likely Sandusky will get most of the neighborhood stabilization money.

"I haven't received any official word from anybody about it, though," she said.

Handy expects to use the money to rebuild some houses and tear others down.

"We certainly have a number of vacant properties that were foreclosures, where the owners are nowhere to be found and the banks don't want the property," she said.

The city has had discussions with Habitat for Humanity and the Bay Area Neighborhood Development Corp. about ways to improve neighborhoods in the city.

Sandusky has not done a comprehensive survey on the number of vacant homes in the city, but Handy has tried to keep a running list.

"Our list is about 240 houses that are vacant," she said.

HUD also announced plans to sell the foreclosed homes it owns to cities for $1 if no one buys them after they've been listed for sale for six months. The offer is for homes bought with HUD loans. HUD has about 15 foreclosed houses listed for sale in Sandusky.

Tim King, a senior planner for the Erie Regional Planning Commission, handles Erie County's CDBG grants.

King said Monday he doesn't know enough about the new funding program to be able to discuss it.

"We haven't heard a thing," he said.