Tacoma is one of the top cities in the state for home foreclosures brought by the Great Recession of recent years, leaving more than 200 derelict homes with unkempt lawns, boarded up windows and unofficial dump sites dotting its neighborhoods.
Faced with that landscape, the City of Tacoma’s Community and Economic Development Department is championing a program that would have the city getting into the real estate business known as “house flipping.” The city would essentially buy the derelict properties, renovate them to meet current building codes and sell them to qualified buyers.
This Single-Family Blight Abatement Program would provide a way to address run-down, single-family homes around Tacoma - and generate income from the sale of each renovated home. That income could offset the long-term decline of federal funding for affordable housing, the city report stated.
“There is a real economic development twist to all of this,” CEDD Director Richardo Noguera said during a City Council committee presentation last month.
The program would boost employment opportunities by hiring local building contractors and real estate professionals such as realtors, appraisers and title companies to facilitate the purchase and quick sale of the properties some six months later, the report stated. The program would also return the properties to the tax rolls and remove troubled properties from the surrounding communities.
“Oftentimes, these properties sit idle for months without the benefit of occupants. This tends to create other negative effects such as deteriorating and poorly maintained structures, refuse dumping, graffiti and other unwanted criminal activities,” the staff report stated. “Targeting this standing inventory of homes will reduce the number of police, fire and code enforcement service calls thereby reducing further financial and staffing burdens on city resources.”
A roster of 23 “flippable” houses has been targeted in a pilot effort if the program moves forward. About $800,000 in federal affordable housing grant dollars from the Community Development Block Grant system and HOME Investment Partnership Program would be used to buy, rehab and sell these previously abandoned properties to eligible home buyers through partnerships with Habitat for Humanity, Tacoma Housing Authority and The Home Ownership Center.
These contractors have already been tasked with acquiring eligible properties in targeted locations throughout the city as part of their programs. The new abatement effort would have the city entering the house flipping business directly rather than just facilitating funding. City officials fear that expanding that effort would overwhelm those programs, however.
Habitat for Humanity is rehabbing five houses with grant money this year, for example, and would partner with the city’s efforts to connect Tacoma officials with qualified, low-income buyers, CEO Maureen Fife said.
“We have a whole pipeline of qualified buyers,” she said.