December 26, 2012 [Kabir Bhatia, WKSU]
The Cuyahoga County Land Bank is looking for alternatives now that a federal pipeline of cheap properties is drying up. WKSU’s Kabir Bhatia reports.
Since 2009, the county land bank has bought abandoned or foreclosed homes from the U.S. Department of Housing and Urban Development, sometimes for as little as $100. Cleveland Development Chief Chris Warren says the program kept homes out of the hands of out-of-state flippers, who often bought up neglected properties and then let further decay. HUD transferred some 850 properties to the land bank over three years, and a third of those were rehabbed.
But HUD says now, with the housing market heating up, and the program facing a $16.3 billion deficit, it will have to resume selling the houses on the open market.
Warren says he understands why HUD can’t afford to keep the program as it was.
“To discontinue it, applying it across-the-board even to the worst-conditioned properties, seems to be penny wise and pound foolish. What we would like is to have a discussion with HUD so they might look at a way to maintain the program or some semblance of the program to deal with the worst properties.”
Under his proposal, Warren says the land bank would continue to take over the worst-of-the-worst.