Atlantic County may be at ground zero for people losing their homes, with the nation's highest foreclosure activity, but it is not alone in facing scores of abandoned properties.
The was clear this week at the New Jersey State League of Municipalities meeting in Atlantic City, when a workshop called "Creative Solutions for Vacant Properties" attracted more than 500 local government officials from all over the state.
The huge crowd forced organizers to move the session from a regular room to a cavernous conference room in the Atlantic City Convention Center.
"In all my years of coming here I have never seen anything like this," said Michael L. Zumpino, chairman and CEO of the consulting firm Triad Associates, of Vineland, a member of the panel.
With a foreclosure rate four times the national average, Atlantic County has been grappling with the issue recently. Just this week, the Atlantic County Improvement Authority announced it had signed with a firm to help municipalities keep foreclosed properties from becoming eyesores and crime magnets.
Zumpino’s firm helps communities get grants to deal with housing and other issues. Attendees listened intently as he described programs to help towns acquire vacant and/or foreclosed properties, to rehab them to meet their affordable housing obligations.
Zumpino spoke about his experience helping Woodbine, Buena Vista Township, Vineland, Bridgeton, Burlington City in Burlington County and Paulsboro in Gloucester County get funding to renovate 43 vacant and abandoned homes for resale as affordable units under the state's Neighborhood Stabilization Program, or NSP, five years ago.
"We had to demolish two or three and build new," he said. "Conditions in the (other) properties were so poor they were a gut rehab," taking everything down to the studs.
Houses that are abandoned tend to fall into serious disrepair fast, he said.
"Those are huge costs to deal with," Zumpino said.
The bottom line was it cost $50,000 to $100,000 more per housing unit than could be recouped through sale at prices required by low-income families. The difference had to be made up by grants, other assistance or outright subsidy by the municipality.
It also took a long time to find eligible buyers who were both low-income and had high enough credit scores to qualify, he said.
The NSP has ended, and now Triad is helping towns use the Market to Affordable Program, a similar initiative that allows towns to buy distressed vacant properties, renovate them and rent them to low income families at a discount. The MAP program is implemented by the Council on Affordable Housing and administered by the Department of Community Affairs.
Members of the audience asked about dealing with foreclosed properties in everything from blighted urban areas to historic districts and upscale second home communities.
"This large crowd shows it's not just an urban city problem, it's a problem for all of us," said Walter Denson of Trenton's Housing and Economic Development office.
The nonprofit Isles, a community development and environmental organization based in Trenton, led an effort to survey Trenton's housing stock and found 4,000 abandoned properties, he said.
Trenton has started a Vacant Property Initiative to deal with the problem, Denson said.
It includes a registration ordinance requiring owners of vacant properties whether they are banks or individuals -- to register and pay an annual fee. That fee has generated about $300,000 so far, he said.
Another program Trenton is using entices people to buy vacant city-owned properties for as low as $1, if they can show the ability to rehabilitate the property with the help of a federal 203K loan, which allows buyers to borrow the cost of renovation as well as purchase.
Denson said his city is moving to acquire vacant properties, but only those that can be bundled for redevelopment by a developer, or that can otherwise be resold. The city does not want to be responsible for maintenance and liability on a large number of properties, he said.
Diane Sterner of New Jersey Community Capital, of New Brunswick, a nonprofit that helps struggling communities finance housing and other construction, encouraged towns to adopt an abandoned property ordinance, to require owners of abandoned properties to register with the municipality and pay an annual fee. Often that one act will get owners to begin maintaining the property or move to sell it, she said.
State law also gives towns that adopt an abandoned property ordinance other tools, such as the right to use eminent domain to acquire particularly troublesome properties, she said. Municipalities can pay be as low as $0 if the cost of rehabilitating the property is greater than its post rehab value, she said.