In May 2018, the foreclosure rate in New Jersey was 1 in every 639 housing units—far higher than the 1 in every 1835 ratio of foreclosure across the country. Homes in foreclosure depreciate quickly and affect the entire neighborhood, sometimes increasing property taxes by almost 20 percent and the tax rate by nearly 10 percent.
These troubling statistics and others drove more than 50 community members representing the public and private sectors, including WRI Executive Director Darren Spielman, to a June 26 roundtable to outline steps to address the issue.
The forum, led by The Financial Wellness Institute, Land Dimensions, and WRI, is the second in a series of conversations designed to advance some of the market-driven strategies for recovery that were presented in the 2018 report: Turning Toxic Liabilities into Community Assets. Among the main topics for discussion were: 1) a multi-sector partnership that can tackle different aspects of the foreclosure process and devise ways to make home-buying more affordable, and 2) begin to build a model for a Revolving Loan Fund to provide nonprofit organizations with capital to acquire and rehab REO, abandoned, and vacant properties and turn them into affordable options for more working families.
Another key strategy is purchasing properties in bulk through the creation of REsolution: A South Jersey Scattered Site Housing Program. Although the program is designed to primarily benefit current and prospective homeowners, first-time home buyers, renters and local municipal economies, it also revitalizes communities, builds a stronger business community and advances the goals of community development organizations and nonprofits to make home ownership more affordable and accessible to low-to-moderate income buyers. The program helps moderate income individuals access formerly foreclosed and distressed properties – properties typically acquired by investors — and helps alleviate the burden of rising rents. On average, almost 60 percent of renters in Atlantic, Burlington, Camden, Cumberland, Gloucester and Salem counties spend more than 30 percent of their income on rent.
What’s more, home building and renovation have historically played a significant role in driving South Jersey’s economy. Since the 2008 real estate collapse, building has struggled to recover and left a large hole in what was a very profitable industry for tradesmen, contractors and builders. A program designed to spur rehabilitation and building will not only provide more job opportunities but stimulate the regional economy, as many builders cross counties for more lucrative and sustained work.
“Essentially, by developing opportunities to acquire and rehabilitate distressed properties, this program will not only meet the demand for affordable housing for more working families, but also create job opportunities that will contribute to a more robust local and regional economy,” said Darren Spielman. “It’s a winning strategy for all.”