HUD and Cuyahoga Land Bank renew groundbreaking agreement
In spring 2010, the federal Department of Housing and Urban Developmenet (HUD) and the Cuyahoga County Land Reutilization Corp., commonly known as the Cuyahoga Land Bank, forged a nationally groundbreaking agreement in which HUD would transfer low-value, vacant and abandoned properties to the Land Bank for $100. HUD ended up with these properties as a result of mortgage foreclosures guaranteed by the Federal Housing Administration (FHA).
This agreement was considered essential to stabilizing real estate market values by keeping these properties out of the hands of speculators who might perpetuate the cycle of tax foreclosure and abandonment. After one full year, HUD and the Cuyahoga Land Bank have now renewed the contract for 2012. The Land Bank has a similar agreement with Fannie Mae.
Frank Ford, senior vice president for research and development of Neighborhood Progress Inc. hailed this renewal as an essential step toward stabilizing real-estate values in Cuyahoga County by removing blighted properties from the market. “In order to preserve the value of the good apples in the basket, you have to remove and demolish the rotted apples,” said Ford.
The renewed agreement calls for transferring HUD-owned properties in Cuyahoga County valued at under $30,000. Once acquired, the Land Bank demolishes those that are beyond repair and preserves those that could be rehabilitated. Experienced rehabbers are welcome to acquire properties from the Land Bank, provided they agree to an enforceable and detailed rehabilitation program.
“This collaboration with the Cuyahoga Land Bank will help stem home price declines as we work to make these houses homes again,” said . “This partnership is about stabilizing neighborhoods hard-hit by foreclosure and preventing these homes from becoming blight on the community.”
Because these homes are dealt with in a responsible manner and neighborhood blight is being addressed by the Land Bank, HUD’s Cheryl Walker, REO division director for HUD’s Philadelphia office, said extending the contract for another year was a positive decision. “HUD encourages arrangements where blight can be eliminated, responsible dispositions occur and neighborhood stabilization is promoted,” Walker said.
“We very much appreciate our relationship with HUD and the highly efficient manner in which HUD and the Cuyahoga Land Bank are able to address some of the worst properties resulting from the real estate collapse,” said Gus Frangos, president and general counsel of the Land Bank. “As a result of this agreement, we have been able to work with housing and economic development departments throughout the county to provide stabilization services.”
To date, the Cuyahoga Land Bank has acquired approximately 1,300 properties and has demolished 562, with 184 additional pending or under contract. About 184 houses have been rehabilitated or are undergoing the process through qualified rehabbers. About 370 vacant lots have been acquired and transferred to city land banks for neighborhood side-yard expansions.
Chris Warren, development director for the City of Cleveland praised the Cuyahoga Land Bank efforts and its close partnership with Cleveland. “The City of Cleveland initially paved the way for this agreement. The Cuyahoga Land Bank has taken it countywide and we work very closely with the Cuyahoga Land Bank in stabilizing Cleveland’s neighborhoods.”
Katherine Bulava is president of Hatha Communications, a contracted representative of Cuyahoga Land Bank.