San Joaquin County was recently awarded $4.4 million under round three of the Neighborhood Stabilization Program, a $1 billion nationwide part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Local congressman Rep. Jerry McNerney, D-Pleasanton, voted to support the act, along with 236 other representatives.
The money will help local governments buy, renovate and sell houses left vacant by foreclosures. According to Jon Moore, chief deputy director of the county Community Development Department, it’s a way to keep neighborhoods from declining.
“The idea is to get people in these houses. … People who care about the neighborhood,” said Moore, one of the people in charge of administering the program locally.
Moore said the county has already received $9 million through previous incarnations of the program in the past couple years, and the $4.4 million will be funneled to neighborhoods through an already established framework.
According to Moore, the county identifies houses for repair with the help of city governments. Then the county gives the money to nonprofit developers, who buy the houses for less than their appraised value. After the houses are rehabilitated, the developer sells the houses and returns the money to the county, keeping what Moore called “a small” developer fee. The money goes back into the pot to be used again.
“We’ll recycle the money until it’s not there,” he said.
However, it’s not yet known when the cash will be made available, or exactly which San Joaquin County cities will receive the money. (Stockton is the exception, as the so-called “foreclosure capital” was awarded $4.3 million directly.)
According to Nick Holder, McNerney’s chief of staff, the federal Housing and Urban Development Department is still working out guidelines that will help determine how the money should be divvied up locally.
“It factors in such things as populations (and) what the housing situation is city to city,” Holder said.
Holder guessed that the guidelines should be out within “a few weeks,” and San Joaquin County should have the money in hand no later than the first few months of 2011.
Moore anticipates Tracy is in line for some of the money, but he’s unsure about the details.
“I would think that Tracy would get their fair share of it, and that fair share will be determined by the process,” he said.
Tracy and Mountain House are among several local municipalities hit hard by several waves of foreclosures. As of Thursday, Oct. 7, Tracy had 2,082 houses in some stage of foreclosure, and Mountain House had 378, according to Realty Trac .
Moore said numbers like those make it impossible for any program to be a panacea, but if it’s spent wisely, the money could help turn around an area.
“The problem is so huge that the $9 million we got the first time and the $4.4 million we’re getting now helps … (but it) doesn’t address the root of the problem,” he said. “We have to kind of focus it to very hard-hit areas.”