This is a guest post by Jevante “JT” Phillips. JT is a freshman student at Virginia Commonwealth University. He is a Finance major in the School of Business. He is originally from Hampton, Virginia and plans to work on Wall Street. He is a Policy Fellow at Housing Opportunities Made Equal.
Vacant and abandoned property is a problem that has increased in volume in recent years, especially due to the housing crisis and subsequent foreclosures. Research shows that this is a continuing problem in Virginia and across the Country. Now is the perfect time to make housing investments a priority to create robust economic growth. The American Jobs Act proposed by President Obama invests in renovating these vacancies to create jobs and promote economic development.
Due to the declining economy, many Virginia families and businesses have gone into foreclosure. The result of this has been a decline in the market value of not only foreclosed and vacant homes, but neighboring homes, commercial properties and thus entire communities. Generally when there is a foreclosed home on a street neighboring houses lose about $5,000-$10,000 in value. This lost value not only causes homeowners to lose equity in their homes and decreases their overall wealth.
Another problem that is created when homes go into foreclosure and become vacant is an increase in crime. A 1998 article in the Richmond Times-Dispatch wrote, “Crooks, killers, and losers tend to infest areas with dead buildings, like maggots on a carcass.” Often times these abandoned properties are ignored by local governments, due to the cumbersome and costly processes that they must go through in order to get rid of them.
For example, in Virginia there is a total of 23 legal steps that must be taken once a property has reached tax-delinquency status, in order to resale the property. Cities are unable to maintain vacant and foreclosed properties due to the lack of time and money needed. John Accordino and Gary Johnson, two VCU professors, conducted a study regarding the vacant and abandoned property problem, and warned that:
“cities that fail to achieve a citywide redevelopment consensus and to link it with their strategies for addressing the vacant and abandoned property problem may find that their efforts never seem to bear much fruit.”
Later the duo states,
“More recognition by both state and federal governments of the significance of the vacant and abandoned property problem for local economies and neighborhoods is in order.”
President Obama has recognized the dire need to redevelop these abandoned properties as well as create jobs. “Project Rebuild” in his recently proposed American Jobs Act is one way he is trying to tackle both problems. Project Rebuild is a program in the American Jobs Act that aims to tackle the problem of abandoned homes and businesses by creating jobs renovating and rehabilitating these homes and businesses. This project will create nearly 200,000 jobs and stabilize home prices in neighborhoods who have been stricken with foreclosure. Through Project Rebuild, the American Jobs Act will help Virginians by increasing home values and reducing vacancies.