Strategies have been formulated that could take distressed properties in New Jersey and repurpose them as residences to satisfy a demand for entry-level homes. These strategies will be officially delivered in a report entitled "An Investigation of the Foreclosure Problem in South Jersey and Proposed Strategies for Turning Toxic Liabilities into Community Assets.” The report will be delivered during a panel discussion on this topic on October 22 in Deptford Township.
The report describes the housing problem found specifically in South Jersey. These problems stem from abandoned and foreclosed properties that have remained empty for years at the same time an acute lack of entry-level housing has been felt. Part of the problem is that construction of homes—which previously was a real source of economic activity in South Jersey—has yet to recover from the collapse of the real estate market ten years ago. Seventy-eight percent of the homes examined in the report lost on average nearly half, or 49 percent, of their market value. The homes analyzed in the report had a median value of $83,439.
The report proposes solutions that could take these abandoned and foreclosed properties and return them to the market. The strategies outlined in the report will include:
- Convening a group of stakeholders made up of elected officials and representatives from financial institutions who can discuss the cumbersome local foreclosure process and its effect on the housing market.
- Partnering with tax-lien holders and municipalities to acquire and rehabilitate these distressed properties, which are for the most part vacant and abandoned, then repurpose them either as owner occupancy or rental.
- Establishing a revolving loan fund that provides nonprofit organizations with capital to purchase and restore all REO, abandoned, and vacant properties.
- Enacting legislation that creates governmental entities or nonprofit corporations that can focus on acquiring and developing vacant, abandoned, and tax-delinquent properties.
“Through such efforts, these toxic liabilities can become community assets,” said Darren Spielman, Executive Director of the Senator Walter Rand Institute for Public Affairs [1] at Rutgers [2], who will lead the panel’s discussion. “These solutions will alleviate the negative impact of abandoned properties on neighborhoods, municipalities, and the region, and help to meet this workforce-housing need.”