SCHENECTADY, New York — Once a bustling manufacturing center, this city on the banks of the Mohawk River had fallen on hard times by the dawn of the 21st century, having lost about a third of its population over the previous 70 years.
These days, Schenectady, the ninth-largest city in New York with a population of 67,000 people, is enjoying a renaissance.
At least part of the reason, according to local real estate experts and Mayor Gary McCarthy, has been a concerted effort to knock back blight by addressing distressed properties and using a strategy aimed at getting new owners who want to both live at those addresses and improve them.
A COMPETITIVE PROCESS
Over the past month, reporters from CNHI News nationwide have sought to examine the issues surrounding affordable housing, who is most impacted by a lack of it and what solutions states and communities have implemented in this multipart special report.
In 2012, after recognizing that auctions of tax-foreclosed properties were not uprooting the grim image of some neighborhoods, McCarthy said it was decided to have local real estate agents help the city market the distressed properties acquired by the city.
“If you look at the studies, the communities that auction properties tend to defer the problems,” McCarthy said. “It’s a competitive process. For you to get the house, you have to outbid me. But you might be paying too much and may not have the financing” to make the needed repairs.
Having had previous involvement in real estate, McCarthy said he recognized the real estate agents all craved more listings in their portfolios. He invited them to a meeting where they were asked to put their business cards in a fishbowl. From that, the agents were presented with specific addresses of properties the city had acquired and wanted to sell.
Meanwhile, he said, a local financial institution with a mortgage department, Key Bank, assisted the city by devising a new program called Key to the City.
KEPT CHIPPING AWAY
Mortgage applicants had to meet more stringent benchmarks in the wake of the 2008 recession, with banks insisting on down payments approximating 30% of the principal, interest and property taxes. But Key Bank offered prospective owners flexibility by agreeing to lend as much as $50,000 above the appraised price, the mayor recalled.
“You would then have some money to fix up the kitchen, put a new roof on,” McCarthy said.
The effort did not yield a major windfall to the city in the first year it began selling tax-foreclosed homes through agents, “but we kept chipping away” through the negotiated sales, he said.
Soon, the deals lured eager buyers to the program.
The program was formalized at City Hall with a new homeownership program, H.O.M.E.S. — Home Ownership Made Easy in Schenectady. Members of the City Council are involved in reviewing the finances of applicants and approving the sales. By this year, the city has moved some 800 houses with a boost from real estate agents.
Veteran real estate broker Susan Sommers, former president of the Greater Capital Association Realtors, said Schenectady’s push to market homes to people yearning for a chance to become homeowners has yielded dividends.
“The price of a house is often too expensive for many people,” Sommers said. “So this program is one angle on expanding the affordable housing that we so badly need all across this country.”
REBUILDING JOPLIN
The city of Joplin, Missouri, also has had success in innovative housing programs, albeit due to unusual circumstances.
The Joplin Homebuyers Assistance Program was created after a massive EF-5 tornado wiped away thousands of homes in the city in May 2011. The grant-funded program was originally established with the expectation that it could help up to about 250 people with down payments and closing costs, but it became so popular that by the time it concluded, it helped about 600 families buy homes, said Troy Bolander, the city’s director of planning and development.
Now, more than a decade later, the city aims to launch a similar program. It has received $3.5 million in community revitalization grants, awarded by the state of Missouri via the American Rescue Plan Act, to promote homebuying by providing financial assistance — up to $40,000 in forgivable funding. The city will contribute at least $3 million toward the program.
“This should be a strong opportunity for building and investment in the community,” City Manager Nick Edwards said. “It sends a message that we want to improve the housing stock in the community.”
The city of Pittsburg, a small college town in southeast Kansas, is using housing vouchers from the U.S. Department of Housing and Urban Development to provide services to residents needing affordable homes.
The Pittsburg Housing Authority was awarded five stability vouchers to assist individuals and families who are homeless, at risk of homelessness, fleeing domestic violence, or recently homeless. These vouchers are in addition to 15 emergency housing vouchers awarded in July 2021.
“The newly awarded stability vouchers are significant to the Pittsburg community, as they give the Pittsburg Public Housing Authority additional tools we need to help five individuals or families obtain permanent housing,” said program manager Megan Keener in a statement.