City Received Almost $20 Million to Rehabilitate Vacant or Foreclosed Homes in Targeted Neighborhoods
Philadelphia, December 22 – Today Mayor Michael A. Nutter visited 3333 Wellington St. in Northeast Philadelphia, the location of the first vacant or foreclosed home rehabilitated with Federal Stimulus dollars. The City of Philadelphia received almost $20 million from the Neighborhood Stimulus Program (NSP,) via the US Department of Housing and Urban Development, which is administered by the Redevelopment Authority. Philadelphia’s NSP focuses on reviving houses in select neighborhoods throughout the City. The house at 3333 Wellington Street was foreclosed on by the Bank of America and was sitting vacant when the RDA identified it as a possible NSP project. In September, the RDA made a loan for $241,000 to the developer (Innova Services Company) to cover the cost of the renovation, which took just under four months. Innova has found a buyer who will purchase the home and move into it in January 2010.
“Today we celebrate the beginning of a stimulus program that is eliminating vacancy in our neighborhoods and creating stimulus jobs,” said Mayor Nutter. “This block has one less vacant house and a new homeowner has a new place to live in this neighborhood. This is the first of 200 homes that we will renovate in the next year using federal funds.”
The neighborhoods targeted by the NSP were identified by the City’s Office of Housing and Community Development based on historic foreclosure data, indications of predatory lending, and the impact of vacant foreclosed homes on the value of residences in the surrounding neighborhoods. Eligible homebuyers cannot have an income exceeding 120% of the area median income – $65,400 for a single person and $93,360 for a household of four.
The NSP program hopes to accomplish four important goals:
Reducing Blight: Every time a house is rehabbed, NSP eliminates a blighted property in a neighborhood, preventing further neighborhood deterioration. Research by the Wharton School has found that a single blighted property decreases the value of each surrounding property by more than $3000.
Providing Jobs: The Program provides construction jobs for workers who are hired by the developer – providing much-needed employment in a slow economy.
Improving the Accessibility of the Housing Stock: NSP provides a homeowner with a renovated home in a neighborhood of their choice.
Sustaining Small Business: The program provides a $20,000 developer fee to the CDC or the developer in charge of the project – giving them an extra source of operating income during this recession.
“HUD is committed to helping to improve lives and strengthen communities recovering from the blight and vacancies that have become visual symbols of difficult economic times,” said HUD Deputy Regional Director Brenda Laroche. “It’s partnerships with federal, state, and local governments, and collaborations with non-profits and for-profits that put the NSP dollars to work in local communities, creating jobs and homeownership opportunities, and stabilizing a neighborhood.”
Innova Services Company, headed by Jeff Allegretti, was the developer of this property. Currently, Innova has six properties under construction and an additional two pending acquisition. The property received approximately $85,000 worth of improvements including the installation of an energy efficient heating and air conditioning system, an energy efficient hot water heater, insulated windows, Energy Star appliances, and an insulated roof. The property is currently under an agreement of sale for $159,900.
