Michigan Program to Buy Tax-Foreclosure, Foreclosed Homes HUD
Livonia Mayor Jack Kirksey told members of the city’s council that the program to purchase foreclosure properties and renovate them is designed to preserve home values in the area. He also defended why the city will use the federal funds from the Neighborhood Stabilization Program.
The request by the Michigan city to buy three properties, foreclosed due to non-payment of taxes, for $26,733 was later approved by the council. Similarly, approval was also given to buy foreclosed homes HUD from the U.S. Department of Housing and Urban Development (HUD) for only $1, with additional closing costs.
The requests for home purchase were proposed for council approval by Councilman John Pastor, and were opposed by Joe Laura. Pastor’s third motion was approved, requiring the city of Livonia to notify residents of the local government’s acquisitions until October of next year, the expiration of the stabilization funding program.
According to industry analysts, Kirksey, once and for all, wanted to put an end to the debate concerning the use of federal funds for the city’s program. The program proposal was usually opposed by council members Laura and Tom Robinson who indicated that Livonia needs to have an exit strategy in relation with its purchase of foreclosed houses.
Kirksey pointed out that the term, exit strategy, is only used in warfare and should not be applied to the almost $1.45 million federal Neighborhood Stabilization Program. He argued that the federal program is designed to eradicate blights that foreclosure homes have become and to alleviate the negative impact of abandoned and vacant properties on home values in neighborhoods.
The program creates positive situations and not negative, therefore an exit strategy is not necessary, said Kirksey.
Since 1976, the city of Livonia has acquired 42 houses using public housing grants, property tax revisions and community development block funds. According to Kirksey, no property was acquired using general fund dollars.
Kirksey told members of the council that properties which are not eligible for rehabilitation would be demolished while houses that can be renovated will be rented or sold.
Under the Neighborhood Stabilization Program, funds must be allocated to a certain area within one year and a half. Proceeds from the sale of rehabilitated houses would be added to funds that could help extend the initiative beyond the initial schedule of 18 months. Livonia could buy 29 houses, invest about $50,000 for the cost of repair of each home, spending nearly $1.4 million.
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