L.A. as landlord
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Los Angeles is joining the movement by other cities around the country to buy up foreclosures and turn them back into viable residences. Fed Housing Secretary Shaun Donovan and others toured some of the homes Wednesday that L.A. plans to buy with its share of the funds under the Neighborhood Stabilization Program. From latimes.com:
The city intends to use its $33-million piece of that money to turn some of the homes into low-income rental housing. Others it will refurbish and sell to low-income and moderate-income families.’We want to bring real families into these neighborhoods, not more investors,’ said Mercedes Marquez, the head of the city’s housing agency....The aim of the federal effort is to reduce blight and add affordable housing. There has been some grumbling among housing programs about the formula that was used for the funding allocation, with some agencies saying that big cities like Los Angeles and Cleveland gobbled up more than their fair share. Some real estate brokers and private investors also have been critical of the program, saying it could force prices down even further.The funding itself is a small dose of medicine for a massive problem. Los Angeles saw more than 21,000 foreclosures in 2007 and 2008, and many of them are still on the market. Even if it spent every cent of its funding on buying homes and bought them at an average price of $100,000, the city would be able to buy only 330 homes.
It’s hard to imagine 300 or so homes would have much impact on housing prices in a city as big as L.A. If there’s a vacant house on the block that’s becoming a public nuisance, having the Feds buy and fix it might make the neighbors happy. But this certainly sounds like a drop in the bucket.
-- Lauren Beale
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