The College Park City Council voted earlier this month to spend thousands of dollars to purchase, rehabilitate and re-sell some of the city’s foreclosed homes.
Seventy properties in College Park are now under foreclosure, according to online database RealtyTrac.com. Council members said foreclosed homes in the city are potential havens for crime, which lowers the property values throughout a neighborhood.
“Foreclosures are a very severe problem in our city,” District 3 Councilwoman Stephanie Stullich said. “They can lead to a downward spiral if the properties are not maintained well.”
Abandoned homes can pose other problems for the city, as well. Director of Public Services Bob Ryan said burst pipes that go unnoticed in empty houses can let water accumulate and spill out, flooding other areas nearby.
The city had to deal with an ice-covered parking lot in January when water spilled from a Pontiac Street house and ran down a hill toward Route 1, Ryan said.
The city will provide $82,000 in funding and up to $250,000 in loans to the College Park Housing Authority over the next five years if the Housing Authority secures a grant of nearly $1.3 million from the federal Department of Housing and Urban Development, according to representatives from the Housing Authority.
The grant would cover the cost of buying five to 10 homes and rehabilitating them with environmentally friendly building materials. The homes would be sold below market value to lower-middle class individuals who work in College Park, Housing Authority representatives said.
Under the terms of the plan, mandatory financial counseling would be provided to the buyers of the homes to reduce the risk that the homes would go back into foreclosure.
Detailed contracts would also prevent the rehabilitated housing from being sold to investors who would rent them out or re-sell them, representatives from the Housing Authority assured the council.
The money the Housing Authority earns by re-selling the houses would be re-invested into buying additional foreclosed homes, the representatives said.
The city will find out later this year if it is entitled to any grant money. District 1 Councilman Patrick Wojahn said he was confident the city’s program would get funded, in part because of College Park’s high profile.
“Being a college town, it’s one of the most prominent cities in the state,” Wojahn said. “It’s an opportunity to highlight a positive program in the state.”
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