The Annual Action Plan Substantial Amendment - City of Pontiac

etween the 19 th and 20 th percentile of the most needy census tracts in the State of
Michigan. USPS 2010 data indicates a vacancy rate of 10%. Of the 1226 mortgages
made between 2004 and 2007, over 37% or approximately 460 were considered to be
high cost and high leverage mortgages by the Home Mortgage Disclosure Act (HMDA
data) and over 20% or approximately 250 of these homeowners were severely delinquent
or were in foreclosure as of June 2010. From July of 2009 to June of 2010, it is estimated
that another 127 homes started the foreclosure process and another 108 had completed
the foreclosure process.
The data source estimates that the number of dwelling units that must be renovated to
make an impact would be 24. The percentage of persons whose income is at and below
120% of the Area Median Income in the target area is estimated to be 72.11. The
percentage of persons at and below 80% of AMI is 49.66. The unemployment rate in
June 2010 was 29.5. The drop in housing values in June 2010 was 31.1 %. A map from
Oakland County provides a color representation the location of foreclosures occurring
from January through December of 2010. There the reader can see concentrations of
foreclosed properties, showing that during 2010, a total of 619 Sheriff Deeds were
recorded in the City and 101 or 16% of these were in the targeted area. The map shows
that the foreclosures are still continuing in our target neighborhood.
Market Analysis
An effective NSP 3 program responds to and reflects the local market conditions. The
following were those factors taken into account while analyzing the target areas market
conditions:
• Analyze market supply conditions as they relate to foreclosed and abandoned
home in the target neighborhoods.
• Understand demand characteristics, trends and what are the appropriate responses
• Comprehend the interplay of supply and demand to design a successful project.
There are several factors or conditions at work in the target area contributing to the
conclusion about the current marketplace for affordable rental and homes for sale.
1. The target community has persistent high unemployment. Therefore, serious
consideration will be given to a lease with option to buy strategy in the marketing
of the thirteen (13) homes.
2. Those of us who have lived in southeast Michigan have seen several spikes in
unemployment due to the struggling auto industry and those dependent upon that
industry. This has undoubtedly contributed to the increase in foreclosures and
falling housing values. However, there is a relatively low vacancy rate, which is
at 10% in comparison to other areas of Pontiac. Therefore, our strategy of
providing a lease with an option to buy and down payment assistance to the
buyers when they buy should be a viable program.
3. As mentioned, the vacancy rate continues to be low. It is believed, that the low
vacancy rate is due to investors buying up foreclosed Bank REO’s and turning
4