One of the biggest centers on the cost. To be effective, the program would need millions of dollars to refurbish hundreds of houses. Local leaders hope to raise money through grants and contributions from nonprofits. Yet, a lot of entities are competing for those limited dollars.
A second issue concerns whether the potential buyers, who likely wouldn't qualify for traditional mortgages, would receive the type of support services they would need to stay in the homes. The U.S. Department of Housing and Urban Development repossesses about 80 houses a month in the three target areas. Most foreclosures are driven by factors such as high credit card debt, personal bankruptcies and lost jobs. Those challenges won't disappear simply because the city has a new program to fix up houses. Without training for potential homeowners, especially in financial management, the cycle of foreclosures won't truly be broken.
City leaders also need to consider how the program would affect the private market. It's true that a part of Indianapolis' foreclosure epidemic has been triggered by speculators trying to make quick profits by "flipping'' houses. But others who operate legitimate businesses and take a long-term approach also are attempting to fix up rundown houses for resale. What would the city government's intrusion into the marketplace mean for them?
As for the costs of the program, I've said it before and I'll say it again. Instead of raising $25 million from the local business community to pay for a Super Bowl party four years into the future, those same businesses could do much more good for the City by putting that money towards a program to fund the initiative to combat abandoned homes. As for the Star editorial's concern about the program having a negative impact on the private market, those concerns are simply misplaced. The fact is that these abandoned homes are driving down the value of surrounding homes and breeding crime in the neighborhoods where they are. Mayor Peterson had a survey of the City done earlier in his administration and discovered an abandoned housing stock of over 8,000 homes. That number has no doubt grown in the wake of the subprime mortgage meltdown. We cannot afford to wait any longer to address this problem.