D.L. Bennett of the AJC has an article that addresses what many of us have assumed — the intown building boom is hitting the skids. The rush to build homes to welcome the influx of new residents was broadsided by the foreclosure and credit and resulted in shuttered-up houses and dwindling property values.
Says Ben at Terminal Station:
The combination of factors hitting these areas is brutal. First, all the subprime mortgages that got people into these homes in the first place reset and foreclosures follow. Housing prices plummet, and you might think there would be a wave of people who could get into some infill homes for a great price. However, tighter credit standards are going to prevent people from getting loans, and the cratering economy will further depress things. So these homes will just sit empty for who knows how long.
The city has received $12 million to buy foreclosures, but it will barely make a dent in the problem. I don’t really know what sort of policy solutions are available. There needs to be an infusion of capital somewhere to buy these houses and get them occupied. I know some folks who are buying up cheap houses (~$30k), renovating them, and renting them to people with Section 8 vouchers. The problem is that this is not a recipe for revitalization. Instead, it can become a recipe for concentrated poverty and can prevent new residents from wanting to move in. I’m not enthusiastic about an infusion of capital of this sort, but it is probably the only sort of private capital available.
