U.S. Reps. Steven C. LaTourette (OH-14) and Marcia Fudge (OH-11) today unveiled the Restore our Neighborhoods Act of 2012. The bipartisan legislation provides $4 billion for states and established land banks to issue 30-year demolition bonds to demolish vacant, foreclosed and abandoned homes across the country.
"The intention is to halt a tsunami of blight that is ruining once-stable neighborhoods one home and one street at a time by focusing on properties that are beyond repair," LaTourette said.
He said if uninhabitable, ravaged properties are demolished it can stabilize and increase property values for responsible homeowners who have maintained their homes and do not want to move from their neighborhoods where they've raised families and worked for decades.
LaTourette said the legislation is needed because under an existing federal program only 10 percent of funds can be used for demolition of boarded up and abandoned properties. He said our area's needs are very different from problems in Florida and Las Vegas, where almost new, upscale homes and condominiums are vacant.
"We have areas around the country, including Cleveland, where once lovely neighborhoods are just rotting, decayed shells of what they used to be and the only viable option is to demolish and start anew," LaTourette said. "These are not homes where you slap on some paint, replace windows and restore them to their former glory. These vacant monstrosities are stripped bare, are magnets for crime and are causing surrounding property values to plummet."
A recent report says there are 26,000 vacant homes in Cuyahoga County alone, and in Akron there are reportedly 2,300 vacant, abandoned homes. Further, a Federal Reserve report indicates there are 19 million vacant homes nationwide, while 2010 Census data shows about 15 million vacant housing units.
He said the bill tackles the problem so every state is helped, and some states get more help. Qualified Urban Demolition Bonds (QUDB) will be used for qualified demolition projects, with $2 billion divided equally among all states (roughly $40M per state) and $2 billion focused on states that have been "hardest hit" by the foreclosure crisis, also known as "qualified" states. Under the legislation, Ohio and several other states would qualify as hard-hit states based on unemployment, increases in vacant housing, foreclosure rates and other factors. The legislation will be paid for.
He said states will have two years after enactment of the bill to use their bond allocations, and states without existing land banks may participate. Funds not used within two years will be redistributed by the Secretary of Treasury to hard-hit states, like Ohio and Michigan.
LaTourette said the bill also contains an important provision that will allow greater flexibility in how federal Neighborhood Stabilization Program (NSP) funds are used. Currently, just 10 percent of funds can be used for demolition purposes in states, but this bill gives hard-hit states like Ohio the option to use all their NSP funds for demolitions.
He said certain areas in Cleveland have deteriorated horribly and are often featured in news reports about blight and the foreclosure crisis. However, the problem doesn't just affect large urban centers, but other areas, including communities in his district.
Eastlake: 17 homes were demolished in last two years and there are currently 280 vacant homes out of 7,000 units; the city spent $110,000 in the last two years to maintain vacant properties.
Mentor: no demolitions, but the city has spent about $100,000 in the last few years to maintain vacant homes.
Conneaut: 24 properties demolished with 100 more on a waiting list.
Painesville: 10 homes awaiting demolition.
The Restore our Neighborhoods Act of 2012 should get a bill number later today after the lawmakers return to Washington, DC.