Cities purchase vacancies to help

Jeff Tyler Feb 7, 2008


Scott Jagow: The recent wave of foreclosures in this country is hurting more than just individual homeowners. Whole neighborhoods and cities are being affected. Vacant homes don’t look so good, and real estate prices drop even more. So some cities are stepping in and buying these houses. Jeff Tyler reports.

Jeff Tyler: From Nevada to Florida to the Midwest, the number of vacant houses is on the rise.

In San Diego County, each month, about 2,000 homes go into foreclosure. So says Jim Bliesner, director of the City-County Reinvestment Task Force.

Jim Bliesner: We see a correlation between the high numbers of foreclosures and rapid decrease in property values.

San Diego is considering a land trust that would purchase foreclosed properties. The trust could then re-sell the houses while keeping the land underneath, making prices affordable for lower-income buyers.

Bliesner expects such owners will invest more in the properties than real estate speculators.

Bliesner: They just sit there without getting repaired. And we’d like to see the homes improved, if it’s needed.

To pay for the houses, San Diego may use municipal bonds or federal block grants. It’s a challenge facing cities across the country, as the national vacancy rate approaches levels not seen since the Great Depression.

I’m Jeff Tyler for Marketplace.

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