Plan to Develop Properties on Bank Foreclosure List

by Peter Vernon on Foreclosure Help

City officials of Santa Rosa, California are planning to develop a 20-acre property on Bank Foreclosure List into 400 apartments for low-income families. The foreclosed property was once intended for market-rate houses in the southeast and southwest quadrants of the city.

Members of the city council are expected to apply for about $80 million federal funding to buy the three parcels of land on Bank Foreclosure List. Under the plan, the city government will give the bulk of the federal funds to builders who will need them to construct affordable houses.

Santa Rosa’s director of economic development and housing David Gouin said that aside from providing affordable housing to poor resident of the city, the program is also expected to generate about 550 construction jobs.

The $80 million money is part of the $1.9 billion federal package set up to help states and local governments purchase and renovate abandoned residential properties on Bank Foreclosure List. The city’s funding request represents about 4 percent of the total federal package available nationwide.

Gouin explained that some areas in the country, including California, have competitive edge for the federal funds because of high default rates. California is one of the states with the highest foreclosure rate nationwide.

Since February, the city has been asking banks, land owners and real estate agents what properties are in danger of foreclosure, the criteria in order for the city to qualify for federal funds.

For its project, the city has identified the 2.8-acre Kawana Terrace which was once targeted for 39 houses by Das Homes before it was taken over by Exchange Bank. The second property involved in the project is the 8.3-acre Sundance Village which was originally planned for 51 home developments by MetroPacific Properties. The property was repossessed by Comerica Bank.

Another property selected for the project is the 8.7-acred Village Gardens where Christopherson Homes planned to build 110 condominiums until it was taken over by Wells Fargo Bank.

Economic development and housing manager Nancy Gornowicz said that two of the proposed projects have a better chance of meeting requirements and federal spending deadlines because of the existing roads and utilities.

The planned development of properties on Bank Foreclosure List is intended for low income residents, families and individuals who are earning between 30 percent and 60 percent of the median city income.