The Annual Action Plan Substantial Amendment - City of Pontiac

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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
them into low end rental houses. The selected neighborhoods have some of the most desirable properties in Pontiac, selling at “bargain-basement prices”. This creates a market where housing is already affordable. 4. The fact that most of the neighborhoods in the target area have traditionally been stable has establish a base from which to stop the decline in housing values with strategic interventions to eliminate a build up of blighting influences. Stabilization through home renovations for new buyers could succeed in the current market. 5. The current market could be characterized as having moderate demand and a moderate supply of housing that is not as yet considered substandard, requiring substantial renovations to make them marketable properties. Such a market in the more up scale sections of the target area could attract buyers whose income is between 80% and 120 % of AMI. When renovated the selected properties on those blocks will have more appeal especially if buyer subsidies are offered. The City will be focusing its efforts on stabilizing the selected neighborhoods areas by purchasing foreclosed upon homes and investing funds to bring the homes up to current codes including energy efficiency to bring up the overall quality of the housing stock in these areas, and to get a family into the home to keep the population of these areas up and to stop the constant turnover in some of these homes by keeping the family in the home for the period of affordability. DEFINITIONS & DESCRIPTIONS As with HERRA, there are certain terms that are used for NSP3 that are not used in the regular CDBG program, or the terms are used differently in NSP3 and the Housing and Community Development Act. The following terms are defined as such under NSP3: Abandoned: A home is abandoned when mortgage or tax foreclosure proceedings have been initiated for that property, no mortgage or tax payments have been made by the property owner for at least 90 days, AND the property has been vacant for at least 90 days. Blighted structure: A structure is blighted when it exhibits objectively determinable signs of deterioration sufficient to constitute a threat to human health, safety, and public welfare. A blighted property is a blighted/abandoned/uninhabitable property that meets any of the following criteria: • Declared a public nuisance in accordance with local housing, building, plumbing, fire or other related code or ordinance. • Attractive nuisance because of physical condition or use. • Fire hazard or is otherwise dangerous to the safety of persons or property. 5
Page 1 and 2: THE CITY OF PONTIAC NEIGHBORHOOD ST
Page 3: Target Area In focusing on the idea
Page 7 and 8: had a huge impact on the City overa
Page 9 and 10: the Federal Programs Division would
Page 11 and 12: 1. Stabilize property values in the
Page 13 and 14: (2) Activity Type: NSP Activity (B)
Page 15 and 16: North Border: Elizabeth Lake Rd. fr
Page 17 and 18: Households with income equal to or
Page 19 and 20: 248-758-3780, Fax # 248-758-3775 E-
Page 21: (9) Projected Start Date: June 1, 2

The Annual Action Plan Substantial Amendment - City of Pontiac

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