This sounds like a great idea. Even though the initial costs of rehab are probably very high, I assume the idea is that, in the long term, you win by not having to pay a mortgage. And, long term homeownership = stability. Win-win. I hope there are people out there who have the interest and the skills or the cash to make this happen.
This is what the city needs more of, not vacant homes, but free... If people didn't have to spend 10k on fees, fines, purchasing price etc a lot more homes would become salvage able. Ok it needs new windows, plumbing etc. So lets say you sink 30k into the house to get the works, a really nice build out. What you would have left is a very nice home with almost a tiny mortgage. (assuming you get the the money upfront as a mortgage)
The problem is people spend 30k to get a home and then need to spend another 40k to renovate it becomes that much less worth it for a lot of people. And for someone looking to have a home more than an investment this is perfect, even those wanting to recoup some money can't tell me that isn't worth the risk.
If only this could be expanded into a city wide program. Partner up with banks to provide low interest loans to the rehab (potentially with underwriting from the City to guarantee loans).
Stick a list of available properties on the web, provide a list of lenders, put an ad in overpriced markers . . . what would it cost? and think of the potential returns!
please, im really begging here. Please mayor, please Common Council, PLEASE PLEASE PLEASE!
even add in title surrenders by banks and landlords in forgiveness for outstanding bills. forget the city auction, all those properties just go to absentee landlords - give them away to homeowners.
put an add in Stars and Stripes. PLEASE!
A homeowner could potentially rehab this house for no money out of pocket utilizing an FHA 203k rehab loan. Perhaps the owner would entertain selling/giving to the home to someone who could provide a bank commitment showing that they will be able to secure the funds for the rehab. The work has to be perfromed by a licensed/insured contracter, but generally all rehab and closing costs can be financed. Monthly mortgage payments are usually about $7 per thousand financed on a 30 year loan so it could be pretty cheap.
The house would be even better had the brick building not been shoehorned in so close to the right side. What is that, anyway?
This house is beautiful. If paddyO is correct, even if this house need $50K, your mortgage would be $350 and if you kept it as a multiple, it would generate enough income to cover that, the taxes, home owners insurance, and possibly even your utilities.
moneypit. why does the owner have to live there? If you can prove that you have the capital to renovate this old dump why should you not be able to rent out both units? I will give you a house but only if you do with it what I am not willing to do. Ridiculous.
It's listed at four units, sold in 2005 for $78,690 (obviously before the fire). Gross floor area is 3400.
The city property information on-line has a lovely photo from 1999 of the house in its former glory.
Instead of spending $240k on the 1 bedroom UB apartments on Elmwood, I would put $140k into this house. You get a fine, sturdy, (hopefully energy efficient), double house in the city. A lot of love can be done for $140 big bones, and would be a gem. You live on the top, and bring in a quiet family for the bottom. They pay their $1k/month rent, very fairly priced, and you get everything you need (including free heat) in your half. You and your wife making 40-50k/each/year, and your mortgage will be paid off in no time. (Plus you keep the 100k you save on UBelmwood)
Pass it on to your kids, who get to reap the real benefits when the city turns around (when politicians pull their heads out of their ass & taxes finally decrease) and you look back saying that was a pretty good investment.
Not a bad idea.
sleepl8 - don't h8. Its to prevent flippers. as much as I agree with you on the its my money i can do what I want, its a solid preposition to prevent people from putting 10k in and selling for 100k
I'll bet Harvey already thought of this but, I'll suggest it anyway. I hope there is a basic education aspect about the architectural style of that home and what renovations will help it retain character (therefore, increase in VALUE). Too often, a first-time home-owner will fall for whatever cheap, quick solution the contractor (or big-box store) suggests. Thus, the white vinyl trim window replacements and other out-of-context "improvements". From the photo, it looks like this hose still has excellent potential for period-appropriate "revival" — so long as the new owner is clued in on the style and learns as much as possible about it. Old House Journal (magazine) is an excellent house-warming gift for any new "old house owner"! Also, learn about architectural styles and details — IN BUFFALO! — here:
http://www4.bfn.org/bah/a/archsty/index.html
I could be wrong but, I think the house on Niagara would fall into "Dutch Colonial"???
I disagree. You can't justify a small trade-off like living there for receiving a free house? This is like the Homesteading program of the city... just looks like this has more potential since they actually want someone to receive the house. I'd be interested but can't presently guarantee the capital... maybe a year from now.
The instructions weren't very specific though. How long would the homeowner have to stay there? Until renovation is complete? a minimum number of years? until sale? Living there is a small price to pay, but the devil is in the details...
This is the kind of thing I am always advocating. This is awesome news!
Buffalo has an Urban Homesteading Program; unfortunately, it so deeply buried in the bureaucracy of the city’s politics that it has never functioned successfully since its inception in the mid-70s. If the City would only take a look at Baltimore’s Urban Homesteading program during the early seventies that had strict guidelines on the “who and how” aspects of $1 sales to homeowners, we would be on the path to red tape free homeownership in Buffalo. Instead, Baltimore is often looked to with envy over their Inner Harbor (which was only received a lukewarm response at first and took nearly 20 years to find its stride).
It’s really quite simple. The City takes all the homes currently in its roster, and, instead of demolishing them or letting them fall deeper into disrepair, they offer them to the public for $1.00. There would be no strings attached save for the basic requirements of qualification –
1. The prospective homeowner must show the economic power to renovate the home to at least code within six months of acquiring the property. 2. The prospective homeowner must live in the home as their primary residence for at least three years from the point of taking occupancy. 3. The homeowner must not have been convicted of a felony crime within the last five years before purchase. 4. The homeowner, if a first timer, must receive counseling on the ins and outs and responsibilities of homeownership provided by the City before the deal is closed.
Although there would be some cost to the City up front – staffing, administration, counselors – in the long run these would pay for themselves by placing these homes back on the tax roles, reducing the number of demos, and stabilizing neighborhoods by bringing people back in that have not only an economic tie to the well being of the neighborhood (the cost of renovation) but also the emotional tie that often develops in people that assumed they could never be a homeowner.
One of Baltimore’s worst neighborhoods – Otterbein – was turned around in the ‘70s by this program and now demands some of the highest prices in the city’s real estate market. This stability and the investment by homeowners trickled into the adjoining neighborhoods of Federal Hill and beyond. Dinky little rowhouses (about 1100 square feet) at the base of Federal Hill (where dockworkers historically resided) even in “non-renovated” condition (which usually means they have not been renovated since the seventies or eighties) start at about $280,000.
It's really time to put homes back into the hands of Buffalonians!
Nope, I'm wrong — that puppy is Victorian all the way! The hipped roof was what somehow seemed "Dutch" to me. Pride of architectural stewardship should be better supported by Buffalo "leadership". There should be programs in place (at city hall and county hall) that create pride in our old-stock housing. It is so much a part of what makes this city special.
You can DO SOMETHING TODAY, to help save 90 well-maintained old-stock houses (many, owner-occupied) from being demolished:
http://www.thepetitionsite.com/1/movetheplaza#signatures
tony....If a potential buyer/landlord can prove that they have a reputable past of buying and maintaining rental properties then they should be permitted to rehab and rent this house. Can you give someone a house and then tell them that they can't move out? What if this out of town owner gives me this house and I move in and do a bunch of work....then I choose to move. Do I have to give him the house back nicely renovated on my dime? It doesnt make sense. It's like donating money to the Roswell and putting restrictions on what they can do with it. Make the donation or keep your pile of shit.
This site truly is inhabited by a bunch of left-wing-nut-jobs. How is it a great thing that property, to be transferred, needs to be given away? If you have zero money, and little hope the city will rebound in the next ten years, sure, this is great. Good thing the majority of working people/investors don't have the time to hang around this site....they'd find the majority of these posts depressing.
FINALLY- some creative thinking about what to do with these empty houses. Here is a suggestion I made on this BR site last week in response to the Push Buffalo article about empty houses:
Mar 7th, 10:56 Lets sell these houses for 500 dollars to renters that are on public assistance (the city is paying for their housing anyway) and sign a contract that in -- lets say 5 years the rent benefit portion of their benifits will be cut off and they are expected to maintain the house on their own after that without public support. The city would save the millions on demolition costs - millions on rent welfare support - the houses would get fixed up (because homeowners are more inclinied to take care of their property) and neighborhoods would be slightly more stabilizied (I would hope).
Now I know that this isn't a perfect plan- but at least I am trying to think of something diffrent to do than forclosure and demolish-- and so is Mr. Garrett. Change has to statrt somewhere even if the first plan isn't perfect.
Owner-occupied homes stabilize neighborhoods. This has nothing to do with how good a landlord you are.
NACA provides low interest mortgages, including rehab costs, pays all your closing costs, nad requires no downpayment. You have to live in the home but you don't need good credit. All you have to do is show that you can make the monthly payments.
If you can show you currently pay $500 in rent and assume you can get $500/month here from a tenant (they'll count 75% or rental income because of vacancies) you could conceivably get approved for $110,000K loan. Tey make you get an inspection and get all your bids for the work ahead of time, but that can be a good thing, especially for a first time home-buyer.
I bought my house through NACA. The only catch is that you have to live in the house for as long as you have your martgage through them and you have to spread the word.
This is a fantastic opportunity and a great idea. I'm shocked at the negativity by some of these comments: "a moneypit"? "free is not a good enough deal"? come on, people! A free house! Talk about looking a gift horse in the mouth. For all you might put into it you could have a newly renovated, updated & energy efficient home--with its original style & charm-- for the same or less than what many pay to start with dilapidated HUD houses (which, by the way, also gives preference to owner-occupied buyers). The owner-occupant stipulation is simply to ensure that the place won't fall into wreckage by absentee landlords like so many in the city have. And this is not just a Buffalo idea either. HSBC's "first home club" is basically a grant for first time home buyers, which gives up to $5,000 towards closing costs ($3 for every $1 you save in the account). The only real catch is that you have to live there for five years; each year of residency another percentage of the grant is forgiven and after 5 years it is 100%. I've done this program and have lived in the double it helped me buy for about 3 years now. It just makes sense for such a gift, to make sure it is used as it was intended.
But we shouldn't be concerned with the few complaints... I'm sure there are plenty of people who recognize the incredible value of this offer, lining up at Harvey's door to be the ones who get this house. I can't wait to see who gets it and what they do to it. It would serve as a great testimonial for future similar city-wide programs. Good idea, Harvey.
benfranklin,
Doesn't this goes back to the fundamental concept of trade? Someone has a house that they don't want. They're willing to give it to you if you agree to fix it up and live in it.
I have something you want (a house) and you have something I want (a person to live in said house and take it off my hands). Getting rid of this house with no monetary value is valuable to me. Making this house a home is valuable to you. Let's trade.
Just because it doesn't involve money as the medium doesn't mean that there is no value being exchanged here. Both parties agree to a mutually beneficial exchange. That's basis of the "free market" isn't it? Where is the left-wing ideology in that?
I know I want to sink my hard earned private capital into an abandoned fire damaged home with mechanical issues! Especially when it is placed in a terrible neighborhood, sits on a heavily trafficked commercial street, will get steady wafts of sewage aroma from the treatment plant, looks over multiple empty industrial buildings and hundreds of parking spots from the empty and barren surface lots across the street.
On top of everything else, entitled "people" will be looking over your shoulder to evaluate how/when/where/what you will do with the house, you'll have to deal with housing court, fines, and an absentee landlord who has let the place rot and still seems to feel he is entitled to tell me what I can and can't do with the property. It deserves basic, bare bones renovations because if you dumped $100K into the house, it would still only have a market rate of about $20K.
Combined with the idea that all the junior Art Vandelays on this site will critique every move you make from the type of windows to the bushes you plant and you have one sweet recipe for misery.
Wait! Maybe STEEL can finally move home and really make a difference. Free house! He can use whatever capital he makes off the sale of his Chicago condo and start his own architecture firm in Buffalo. Come on, whaddaya say STEEL?
Light...A "free house" can end up costing a fortune to renovate. I know some of you think that I am just being a cinical prick but if you have ever purchased an older home you know that the cost to make repairs can add up by the thousands rather quickly. Yes it is nice to get a home given to you but it could easily cost tens of thousands just to update the utilities. Windows and a roof alone on this place could cost 15-25k. Disagree if you like but this place is gonna be a moneypit for whoever gets it. When the "lucky" recipient is done they will have spent twice what the house will be worth on the market.
Not only that, but they will not be able to get optimal return on the investment (in the form of rental income) because they will be stuck living in one of the units. I hope that whoever it is that does take the niagara street money incinerator is wise enough not to turn it into a single so that they can at least have some income potential with from the second unit. Nobody gives away a house unless it is not worth the cost of repairs. Harvey needs a bulldozer, not a "homeowner"
I love the concept but for it to take off on this project and around the city, the math has to be right.
We first have to ask if this house was in livable condition how much would it sell for or how much would the units rent for.
This statement "Because it's free, the ultimate investment will still be reasonable. If done right, the end result would be fantastic." is very dangerous. Show the math or do not make the statement.
How bad is the fire damage? How many windows are there. 3400 sf feet is a LOT of plumbing and mechanical. I get a feeling that if this was done with limited finishes and nothing fancy, the cost would be more then what the house is worth.
This does not mean it should not be done. It should be done! There may need to be some help. For example,
Have the owner get 3 quotes on what it will cost to bring the home up to code. For this house, say that is 125k. Then take the appraised amount of the home IF and WHEN it is up to code at the current market. Say 100k. There you have a $25k gap. This gap is why redevelopment is not happening. Nobody in their right mind would spend $125k to have something worth $100k.
Take that 25k and spread it out over 10 years. Give the owner a property a tax credit that is non transferable to cover the gap. In this case, $2500 a year for 10 years. This would prevent flipping under the program and encourage long term ownership in the city. It would also increase property values around the city, bring properties back to the tax base and if done right, would lower the overall tax burden of each property owner in the city.
Even with the generous programs, the city would still bring in more in terms of taxes with these new properties then if they sat vacant or in this case having such little value it can be given away for free.
This would also help the economy as it would place a lot of work in terms of contractors working on bringing up these homes. One thing that would have to be done is make sure the unions do not bully there way into this work. The math would have no chance of working then.
I have to agree with sleep8 on this one, yes, the concept sounds good to get someone in the house and occupied. Reality check is the cost of the rehab. If anyone on this site has done a real rehab, this place looks to be well over the 100k mark in costs. Being on Niagara, like it or not there will not be the return on it for a long long time if ever. Not to mention how much rent you would need to charge to help cover costs, how many well heeled renters want Niagara street?. If this was a good deal, the owners would renovate and make it income property themselves! Me thinks they just want to turn over court appearences to someone else.
Maybe Mike Hananel's buddy Gian should chime in on the potential, in spite of fire damage?
http://www.buffalorising.com/story/youve_met_mike_now_meet_john_f
To all of you out there that are being critical of Mr. Garrett's suggestion - I would genuienly like to hear your ideas/suggestions of what can be done with these empty houses (besides go on the demolision waiting list- that only makes them a haven for theft & crime).
SleepL8, I have purchased an older home (built in 1901), so believe me, I do know how quickly repair costs can add up. I've had to make emergency repairs to a boiler, replace hot water tanks, and even tear down and rebuild a dangerously collapsing chimney. And I know there is more work to be done-- like any house, improvements and repairs are an ever-present reality. Yet even with all of these problems, the benefits still outweigh the pitfalls. And since it is a double, I am able to live in one apartment and rent out the other. For me, and for many others like me, that was the only feasible way to own a home. After the rent is paid, I end up paying less for the remaining mortgage than what many people pay for rent each month--and in the process I'm improving my credit and increasing the equity of my home. Instead of looking at a situation like this as what you'd be losing (the possibility of another rent), look at the benefit of getting ONE rent, PLUS a home to live in, after repairs. Tens of thousands in repairs add up, yes, but when there is no cost to the house itself, it is more than a fair arrangement and presents great potential to someone willing to put in the effort.
Wouldn't this be a great place for an ambitious Manhattan resident to make a fresh start in life after a sudden job loss and intrusive press attention? The timing could be perfect!
The city if Buffalo website says that it is FOUR UNITS.
The article itself calls it a "multiple," not a double.
AtwaterLouse: LOL!!!! Maybe he'd press for a different solution to Peace Bridge expansion, from his new residential perspective, as well!
Light-Agree to disagree I guess. I understand your point but I stick by my opinion that this house will cost more to rehab than it will ever be worth on the housing market. In the long run, the total cost to own this home will be as much as purchasing a well maintained home at its market cost.
FYI Wright is a play on words....before the spelling police attack me. Sounded better in my head.
That's the point SleepL8 - this isn't a house to be flipped. It's a house to be rehabbed and lived in or you rent out the THREE other unit generate income every month. Also, there is the consideration of psychic income - the good feeling of becoming a homeowner and saving a house.
No one knows how much work it needs, whether is $50K or $150K. Obviously that makes a difference.
Someone who has to live in the house is more likley to invest in the neighborhood and work to turn it around. Maybe in 15 years this will be a great place to live, the house will be work lots, and you'll have had a free place to live all the while because of the rental income. Is that so bad?
Awesome news about the Freezer Queen conversion with two added floors and the 15 floor condo tower to be built next to it. Yet this site dwells on one abandoned shell. Incredible simply incredibl:)
Although I think the concept is admirable, I would suggest that the section of Niagara Street from Tonawanda Street to the QRS building be rethought for high-density residential or higher-quality office space. This house, unfortunately, no longer fits into the landscape and should be torn down. (By the way, can anyone get Rich Products to repaint their office complex exterior back to white?)
I hear there are some guys planning to rehab that old Larkin warehouse building on Seneca Street in to office space. How crazy is that? It is too far from downtown and too close to the projects. Who would ever move their offices into that Sh*thole? Next thing you will probably try and tell me they propose building new office buildings over there too. Hahah
Oh wait.....never mind.
Atwater,
That is some funny stuff. I think John Martin and Martin nailed the point. Unfortunately, it just seem to make sense to dump money into this house. If it did, the owner would have already done it. The numbers will not work for a rental; as someone said, you put 50k into it, and then its worth half the amount. Not a good idea for anyone.
I wonder if the new owner will have to abide by the same residency standards as our local politicians, police officers, fire men and women, and other public servants. I am confident that quite a few of them would like to rent out the address if you picked up the check from their real homes in the suburbs.
bfranklin-did you write that simply to be provocative, to be humorous, or were you actually serious? Either way that has to be the the dumbest most absurd thing ever written on BRO! Archive that one boys.
RonR- I think you were leaving your comment while I was typing mine- so I did see your suggestions and ideas for this house, which I think are good questions- until after I left my post. I like your ideas. I was not being critical. I own a home in this area and I have genuinely longed and dreamed of what the possible solutions might be to this horrible problem. Sometimes it really gets me down and I start thinking it's hopeless.
Seems like a stretch for me...
The neighborhood sucks. Imagine sinking all the money that'd be required for repairs in that house, living in it and having to settle for less than desirable tenants to occupy the other units...because we know this ain't like renting out a double in North Buffalo where you might be able to find decent tenants. Trying to get any "choice" tenants to rent in apt on this part of Niagara is beyond unrealistic.
Funny, a lot of people are saying that "this neighborhood sucks". I would have to disagree totally and I actually can since I have spent every day there for the past 8 months working to rehab an 8,000 square ft building on Auburn two blocks East. More on that later...This house is one house from the corner of Auburn and Niagara for those of you that didn't know that yet feel they can spew negativity regardless. The building on the corner(left of subject in pic) is a a three unit that needs work for sale right now for 29,900. Go ahead and run with that. The building to the right is beautiful but details have been covered up. Prime rehab. A couple more houses away at the corner of Breckenridge and Niagara sits a gorgeous old brick multi family just waiting to be rehabbed. The neighborhood within a couple blocks East of this house has a lot of home ownership and is very solid. You should already have read the stories regarding RiverKeepers and Barb and John on BRO but also maybe take a closer look and see all of the other specialty businesses in the vicinity of this house. Add to that the multiple prime river front buildings with great potential for business in the future nearby. Add to that, the number of good restaurants, chance for ethnic diversity in your life, ease of commute to all thruways, Squaw Island park and much more. Give it a try, take off the blinders, stray from your usual route home, go try a new lunch spot, or dinner. It is an amazingly diverse area and you will see that.. This house is a well built, architectually unique and in very good shape on the outside. How can you just throw rehab cost estimates out without any real knowledge of the condition of the interior. You would be surprised at what you can get done for your money if you are shopping around and comparing prices. I wont go on any more just to get blasted by you guys, anyway I just got home from working on my building a little while ago and I have to get up early tomorrow to work all day there again. You know, actually doing something to make my city better, oh wait a minute, forgot who I was responding to
There are rowhouses in Washington D.C. that were literally empty shells with rotting timbers and no roof that have been rehabbed into respectable homes. And they too were free. It's a huge challenge but with a guy like Harvey Garrett in your corner, this becomes the possible dream. There are people intrepid enough to take this on and there are more houses out there for the rest. Get busy.
You can't really compare depressed Buffalo to booming cities like Washington DC.
Here, outside a few select/choice city neighborhoods there is no culture nor critical mass of middle class city living in this region nor the type of economy to make such a niche lifestyle flourish. Almost all of WNY's middle class economy is that of suburban families and the jobs they work are mostly the more unglamorous types that don't exactly attract the so-called "creative class" that supports hip urban living.
For those with choice of where to live, city living has been relegated to a niche lifestyle. Those who seek out this lifestyle will almost always gravitate toward neighborhoods where there are plenty of exciting and useful stores/amenities to walk to. They want sidewalks filled with people like them. They prefer their jobs to be concentrated in a nearby downtown (or college/university setting) in quick commuting distance instead of scattered haphazardly throughout the suburban wastes. The neighborhood around the house featured in this post has almost zero of those qualities; besides being next to the river, what sort of unique urban amenities does this location really offer?? On top of that, the street (Niagara) itself is wide, ugly and filled with noisy traffic all the time.
Surely anyone who decides to sink their hard-earned dough into this place will be able to sympathize with this guy: www(dot)theonion(dot)com/content/node/51852
In Buffalo they'll life in those few choice neighborhoods and have little incentive to chance it in a risker area as long as prices in the nice neighborhoods remain affordable. In Buffalo there's just no pressure for those with choice to live outside their comfort zones.
Good luck.....
The urban homesteading movement in D.C. began in the early 1980's. At a time when that town was being given up for dead. Buffalo isn't even that bad, but it is close. The house is free, whose "comfort zone" is that?
The 1980s was still in the dark age for American cities. All big/former big cities in this country faced the same problems at that time. It's just some were able to rebound while others (like Buffalo) languished.
The house is free, whose "comfort zone" is that?
It's not exactly free when you have to sink 30-50K into making it habitable. The house probably won't be able to sell for that much when all is said and done.
And again, don't go comparing DC to Buffalo. Even then, the city and region had at least 10x more going for it than we do now.
DC had then and has now an expansive metro rail system, assloads of high-paying white-collar jobs in its urban core, a compact built environment that lends itself to vibrancy-enabling density when put at its highest use, and a collection a prestigious colleges and universities. Add the obvious fact of being the nations capital along with being in the center of a very populous and economically diversified metro area and you have the recipe for a vibrant urban center.
Can we say any of the same things about Buffalo?
D.C only turned it around in the last 10 years, and it's a combination of factors. Buffalo's turning around now. Maybe you're looking for a big statement, either by a developer or a major employer. That can happen at any time. But what matters most is that more people are discovering Buffalo and in time, that can be much more powerful than a single big statement. Either way, it's going to happen. Too many cities are closing in on rebirth...their wake might actually pull Buffalo in.
Is it a little weird that this story has drawn so many comments? I mean, it's a well meaning effort that doesn't involve any sort of public investment, yet there are dozens of posts debating whether it will work or not. I doubt that we can know how it will turn out. The only appropriate response I can think of is "good luck."
To all of those that support this idea / concept -- CONGRATULATIONS TO YOU! You're supporting an effort to help bring 'old homes back to life'..... It's sad that so many homes have fallen into disrepair, but it's great to see that there's an opportunity to bring some of these (historic) homes back to life... The homes may not be 'historic' on a "national registry', but they're historic to the neighborhood where they reside and they each have a 'unique' story.
To all of those that don't support this idea / concept - I HOLD OUT HOPE FOR YOU - perhaps someday you'll see the architecture, craftsmanship and beauty in these old homes and realize that they are a real treasure to the city of Buffalo. Let's leave 'politics' out of it, and admire the beauty and craftsmanship of these homes. A lot of the houses in Buffalo were built well over 100 years ago, and for the most part - - they're holding up exceptionally well -- as long as the owner(s) kept them up. There are a lot of homes that are in 'bad shape', but that's due to neglect, not poor workmanship!
Lets support those that trying to help out the community and offer our help, advice and 'contact information' to local resources that will assist them in revitalizing homes in our community.
Quote: "Mar 7th, 10:56 Lets sell these houses for 500 dollars to renters that are on public assistance (the city is paying for their housing anyway) and sign a contract that in -- lets say 5 years the rent benefit portion of their benifits will be cut off and they are expected to maintain the house on their own after that without public support. The city would save the millions on demolition costs - millions on rent welfare support - the houses would get fixed up (because homeowners are more inclinied to take care of their property) and neighborhoods would be slightly more stabilizied (I would hope). "
First, the city does not pay for Housing. Rent is supplemented by various means such as Belmont, Social Services, RAC and others.
Second. to have this supplementation, the property must go through various types of inspections depending on the host party that supplements the rents.
Third, since this property and many like it have a great deal of rehab to perform, where would the rehab monies come from, and if the new renters to owners had the wherewithall to perform that rehab, why would they need rental assistance in the first place?
@kevind: I don't think anyone's injecting "politics" into this. They're injecting simple economics into this. Simply put,
1. If it made great economic sense to renovate, it would have been done by now; and
2. It does not make economic sense if it will cost between $40k - $100k (various estimates by other commenters) to renovate a house in a commercial neighborhood where other homes sell for $20k - $39k.
When people actually start moving into Buffalo rather than moving out, then the values will increase and these projects will sell themselves.
It's a fundamental question of economics, not architecture.
Pundit,
The latter half of your post is correct, of course. When people start moving in, values will start to increase. And this is a fundamental question of economics.
But your points 1 and 2 are specious at best. This deal is economics. The current owner of the property is making an economic decision based on the value of the house. It is simple economics where the value of the house is not being defined by $$$. It is valuable to the owner to prevent this property from falling into complete disrepair or being flipped. And, to the future owner, perhaps the value is also not defined in terms of an investment. It's a chance to rehab a house, do something good for the city and get a place to live out of it. If I'm a person who has the skills to do this, I want to take a chance on project like this, or maybe I just have the cash, then the price could be just right after all.
It's like Sabres tickets. I can't go to the game. I'll give my tickets to my buddy just so they get used. Of course, I'm not going to pay for my buddy's beers, hot dogs, parking, commemorative DVD, etc. That's the deal. I can't go. He wants to go. I won't make him pay me for the tickets, but he's gotta pay his own way once he gets there. I could even write up a contract that says he has to wear an oversized novelty hat while he's there. If he doesn't agree to that deal, he doesn't get the tickets. If I charged him money for tickets I'm not going to use, I would probably end up looking like a jerk and making my friend mad at me. I don't want to do that. So, either way, it's a mutually beneficial exchange. That's economics.
Or, I could try to sell the tickets last minute on the internets and get the best price. But I might not even get what I paid for them (since the team is in the tank now - they would have been hot a while ago, but not anymore). I could do nothing and watch the tickets become completely worthless. Or, I could hope the game becomes a classic, has historical significance to someone and wait for years for their value to go back up. Now I'm trying to profit, or at least recoup my losses. That's business.
What do you think I'm most likely to do?
Generally,
Those of you who badmouth this deal only indicate that the project is not right for you. Fine. It's a bad investment...for you. But don't invoke the "economics" argument. This is economics. Whether Harvey gets 50 calls for the house or 0, that's the market speaking loud and clear. Who wants a "free house" in a transitional neighborhood that comes with potentially high rehab costs? Let's find out...
To MRogers
I know my sugesstion is an unworkable one - I only made it to introduce alternative thinking to what to do with these empty houses. As far as where people with no income or on public assistance will get money to fix the house - let me explain how it is done: My father came here from Italy, mother and us 4 children with 200 dollars, a sixth grade education, did not speak one word of English, no understanding of the American currancy, and no knowledge of the area, and quite frankly allot of pregudicial abuse (the neighbors made fun of our nationallity). He got a job sweeping floors in a factory and we moved into the projects. Brick by brick and 2 by 4 by 2 by 4 he saved garbage and scraps of materials so that he could fix up his own place someday. He bought a shack and little by little built a home - a very nice home. This does not work every time or for everybody - but perhaps if we work with the poor and these empty houses in some fashion we can come up with a solution for some. Isn't the city spending millions to demolish these houses anyway. All I am saying is - Are there more creative ways to spend this money whereby we would help people and the neighborhoods? Perhaps we need more dreamers like my father.
@reflip:
1. From the looks of it, the house is in total disrepair.
2. The owner wants to avoid it being flipped? Who's the owner? Why was the property permitted to reach this condition? Was it not insured against fire damage? The deal is, in essence, "Hey, I neglected my property and housing court hasn't caught up with me yet. You can have it. For free."
3. Your Sabres tickets analogy is faulty. The Sabres tickets have a face value and a real value. The face value is what you paid for them, and the real value is what someone on stubhub or on the street would pay for them. This house has potential value, but the potential, real value is much less than the actual cost of its rehabilitation. I'm sure someone will end up trying this because he/she has a big heart and an ability to get financing, but doing this only makes sense emotionally. Not in the pocketbook. Plus, we're not talking about $100 in tickets to a hockey game. We're talking about tens, if not hundreds, of thousands of dollars.
4. The "market" doesn't speak depending on how many calls Harvey gets. The market has already spoken.
How many of the vigorous proponents of this proposition have actually signed up? If not, why not?
Sorry I was planning on being more interactive with this post yesterday but I ended up being in meetings all day and evening.
First in response to Pundit:
1. I disagree. It was in the wrong hands and it had a mortgage making it a tougher lift. The mortgage is gone and we have access to it now. Mortgages hold back a lot of our vacant structures. This is why the City Auctions are helpful on the West Side - they clear titles. If we didn't step in and get creative this would have continued sitting there with a mortgage.
2. I agree that it needs to make economic sense. If the cost of rehab is greater than the values in the neighborhood it will be a tougher sell. The numbers need to be crunched - it's too early to tell. The first step is to make the property available at a reasonable price, then to attract interest (about 10 people so far), then we'll go through the property and see who is still interested enough to bring in contractors who can accurately assess costs.
"When people actually start moving into Buffalo rather than moving out, then the values will increase and these projects will sell themselves" - I agree here to, except that we have this starting to happen on the West Side already. In a region that is still losing population, and a City that is still seeing vacancies increase, vacancies are actually decreasing on the West Side. People are moving back in and property values are increasing. I'd like to give you a tour Alan so you can see it for yourself.
We reported in the Chenago post that we analyzed all the streets between Richmond and 15th street and could show property values increasing almost across the board. We just finished analyzing the rest of the WSCC area and we can show, with actual real estate sales, property values going up from Richmond to the River on every street but 2. In fact, the rate of increase exceeds that of the Elmwood Village and Allentown (but with much more affordable houses). We'll be posting more on this soon but I'd be happy to send the data and analysis to Pundit if he'd like to see it.
This is a waterfront neighborhood with a lot of cool brick buildings - it will be avery desirable neighborhood in the future. Although I still think the Lower West Side is the coolest neighborhood in the City and I encourage anyone looking for a house to check out the West Village, Fargo Estate, Days Park, Johnson Park, and Kleinhan's area - for someone looking to be near a site with a great deal of Buffalo's canal, river, underground railroad, and even war of 1812 history - this is worth looking at.
This is a cool neighborhood. It's still challenged and it's a mix of housing, older industrial brick buildings that date back to the canal, and it's on a very busy street. Not the right house or neighborhood for everyone - but it is a neighborhood that's coming back and for someone this could be a great project. We'll see. I'd rather try than just assume that "If it made great economic sense to renovate, it would have been done by now" and just let it sit there rotting or knock it down without trying.
Last thing for now - this isn't a new idea for us. We've taken dozens of vacant / abandoned properties and brought them back to life (about half of them were on the City's demo list at one time). We used to get a lot of free houses thrown at us - this doesn't happen to often now that interest has been increasing in the area. But we've probably done the free house thing at least 6 times where it was successful. I can post example where it's already been successful if anyone is interested.
I understand the pessimism and frustration in this City - I really do. But we need to start working towards a positive vision of what things could be like rather than always wringing our hands about why things will never work. I see this holding us back every day - sometimes in small ways, sometimes in big ways, but I see it and it's up to us to change (including who we elect and what we let them get away with).
Harvey
This house in in Housing Court and there was insurance - the insurance was used to pay off the mortgage.
The market has spoken - 7 straight years of property value increases based on actual sales data (I'll try and get this posted in the next couple of days -the Data comes from the Buffalo Niagara Association of Realtors - the analysis was conducted by LISC).
The West Side could start going to hell tomorrow (although I don't think it will) but for the last 7 years the property values are going up - after decades of decline. Crime is falling and so are vacancies. Homeownership is increasing and private investment is coming in. It's pretty far from perfect but it is coming back and the momentum is increasing rather than lagging.
Again, I understand and respect the pessimism, I'm trying not to make any claims that I can't back up, and I'm trying to use objective outside parties to do the analysis and report results. I'll bring anyone on a tour of the area and I'll do my best to provide supporting data - but sometimes these discussions appear to be more about emotion that facts and I honestly don't know what to do about that.
Harvey
The owner lives in NYC. He's owned it for around a year and a half. The fire just happened last summer. I'm working through his local attorney.
Harvey
Pundit,
I'm just going based on the information provided in the article, which says, "By the way, the reason that it is free is that the current owner is out-of-state and is having a tough time in housing court. So Harvey and the owner have hatched a plan to get the home into caring hands."
I agree with you on points 1 and 2.
As for my analogy being faulty, the fact that I was comparing hundreds of dollars to many thousands of dollars doesn't negate the analogy. The principle is the same. Simple SAT analogy. The words aren't exactly the same but the relationship is. The house is worth nothing to the owner. It could be worth something to the recipient, despite their having to sink money into it. It makes no economic sense for me to go to a Sabres game - ever - because I lose money on the deal every time. Yet, people continue to go.
Regardless of the "seller's" motivation, this is an economic decision. Market forces are at work and this project could have value to some buyer. Even if that person takes a bath on this financially, they still made an economic decision. Whether it is a good one or a bad one is not my place to suggest, and I never did say one way or the other.
We agree. The free market is at work. Let's see what it does.
Mine is the first post on this topic. In it, I said "it" seems like a good idea (not to buy it, just to offer it up as such). I said that I hope that someone out there has the skill, time, effort, money, desire, etc. to make this work. I can advocate for the concept without buying the house myself. If the deal falls apart, oh well. Again, let's see what happens. I'm not playing with other people's money. I'm just rooting for the free market to work for the good of the City of Buffalo, as opposed to the detriment. How could anyone disagree with that on principle?
If there was a pool of low-interest money from local private lenders that could be used by employed people to rehabilitate existing homes in order to strengthen neighborhoods, this would work. Termini and others who rehab buildings downtown repeat over and over that it would be economically unfeasible to do without massive tax breaks and incentives.
If Rocco Termini can get tax credits for rehabbing a building for swanky downtown lofts, then it seems to me there should be a full-court press to get similar benefits in the hands of individuals who want to do the grassroots work such as is being suggested here.
Remember the "violations" that PUSH slapped on city-owned homes a few weeks ago? Well, if the city was pro-active about marketing those homes in conjunction with a program that enabled prospective owner/occupiers to get clear title, and a break on renovation costs, that would do a hundred times more for existing city neighborhoods than the placement of a few $1000/mo lofts on lower Pearl Street.
Which is why, when we talk about things like, e.g., development of a "second city" on the outer harbor, it's so patently silly. The city has loads of neighborhoods that have cheap, available housing. Why should public largesse go to developers of tomorrow's Adam's Mark rather than neighborhood-building individuals who can replace blight with employed families.
Pundit,
I agree. Waiting for the City to pull any of this together hasn't been a good strategy so far so we tend to take things in our own hands. And we haven't been doing too bad a job -but yes it would be great if there was more of a plan and resources coming out of City Hall.
Harvey
Harvey - Correct me if I'm wrong but if I'm not mistaken, this house on Niagara is not very close to the neighborhood that has the property value growth you cite.
The market has spoken - 7 straight years of property value increases based on actual sales data (I'll try and get this posted in the next couple of days -the Data comes from the Buffalo Niagara Association of Realtors - the analysis was conducted by LISC).
This house is at Niagara and Auburn, close to West Ave and surrounding streets that are struggling a lot, right? As some comments said, it seems it'd be a very challenging spot to draw and keep tenants. Are those adjacent blocks really seeing property value growth?
Wouldn't someone spending X thousands of dollars to rehab this house would end up living and being a landlord at a location relatively isolated from other houses/blocks on the upswing? Little more than half mile away, which sounds close but it's quite a few blocks in between.
Might not they (and the greater good) be better off to put that same money into saving a house more adjacent to where your group has seen success - Essex St, etc.? I'm not saying it's impossible to save this house, but in terms of priorities and strategies I just wonder if the location is likely the best use of money anyone wanted to invest for a WS house.
Harvey,
I have printed the photo of the house & story and am going to share it with the people I know - perhaps you'll get some potential "Buyers" from that.
It is about creating a home not about making money on it. The person who would live in this house would do so because he can't afford to buy a house and then go through the normal renovation scenar
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