The city of Buffalo plans to renovate and sell up to 30 homes. According to The Buffalo News, city officials plan to fix up and sell 30 houses through a new housing renovation plan in partnership with MandT Bank Corp. and a non-profit organization.
The new plan, which will also use $2.4 million in state funds, was developed in response to criticism over the price of renovations under the former plan. The 30-home renovation will take place over the course of the next 14 months.
Brendan Mehaffy, the executive director of the Office of Strategic Planning in Buffalo, says the goal of the new program is to reduce the cost of renovating housing by fixing houses without federal funds.
“We don’t have to follow federal rules,” Mehaffy said. “That was a top consideration in designing the new program.”
Over the last three years, Buffalo officials spent $4.3 million in federal funding on renovating 10 houses for low-income families. The average cost per renovation was $430,000, but the houses sold for $100,000.
The 30 houses are to be sold between July 1 and June 30, 2019. Only potential homeowners are eligible to purchase the homes, not investors.
To gauge the market and interest in the properties, the Division of Real Estate plans to first begin selling 10 homes before selling the remaining 20.
“We have to see how it goes,” said Mehaffy. “But we’re being optimistic with the range of resources that have been brought to the table that they’ll be interested in the program.”
The housing market in New York state has seen significant demand in light of the low supply of housing. Yet rather than sell their houses, homeowners are choosing to renovate their own homes.
In fact, nearly two-thirds of homeowners are planning on renovating.
A house is typically the most expensive thing a person will buy with a car being the second and furniture being the third. Many homeowners are choosing to stay in the houses they already own and renovate rather than moving to a new location that may also require renovations later down the road.
“That’s where construction and renovation solutions are becoming popular now,” said Gary Moukhtarian, the senior vice president of home loans at Webster Bank. “It is allowing individuals to renovate existing homes comfortably [and to have] peace of mind knowing some work will result in added value to property.”
To provide a greater supply of housing to the city of Buffalo and its low-income families, officials are choosing to do renovations of their own on houses the city has acquired.
The renovation program involves using Buffalo Erie Niagara Land Improvement Corp. to acquire housing properties during foreclosure. The bank’s authority allows it to acquire the properties without having to move through the auction process.
This speedy process, Mehaffy says, allows the city to identify and possess homes early on to prevent the disrepair that caused many of the renovation costs in the past to surge.
For instance, up to 25% of a home’s heat is lost through small holes and cracks. Major cracks in the home’s foundation could be a significant problem.
Many properties in the past have had to be demolished because of their inability to be rehabilitated. Houses that are fixable, but need extensive work, will be transferred to Habitat for Humanity.
“This greatly expands our ability to find a path to redeveloping these properties,” said Mehaffy. “Given the expanded number of tools that we have now and the partnerships that we have formed.”