By John Schaffner
“There are approximately 5,000 homes in Atlanta that are empty–many because of the explosion of mortgage fraud during the recent housing boom—and those homes can provide a big fix to the city’s need for affordable housing,” according to Post 2 At-large Atlanta City Councilwoman Mary Norwood.
During the past year, Norwood has started to form a network of mortgage financiers, construction trade groups, and housing nonprofits with the goal of bringing these homes, in some of the most distressed areas of west and southwest Atlanta neighborhoods, back to life.
The initiative is known as the Neighborhood Housing Coalition and will rely on help from the private sector almost exclusively, according to Norwood.
The goal, said Norwood, is to “close the loop” on the cycle of vacancies, foreclosures and decaying inner-city neighborhoods that has occurred while city residents increasingly move farther outside the Perimeter in search of affordable housing. She said the plan could avoid wholesale gentrification.
Affordable housing, and this initiative in particular, was one of the topics Norwood discussed Aug. 13 with the Buckhead Reporter during a lunch meeting in Castine, Maine, where the councilwoman was vacationing with her husband, Felton Norwood. (Also see Editor’s Notes on page 6).
Under Norwood’s plan, foreclosed and vacant homes owned by banks and other mortgage lenders will be inspected and appraised. Contractors and engineers will assess what rehab work the homes need.
If the house was involved in mortgage fraud, banks and tax assessors will re-appraise the home to the proper market value, the councilwoman proposes. Norwood said banks are finding actual home values as low as $90,000, with the median home price being in the $140,000 range in these areas.
Such system “lets the free market and individuals decide where to live, but it will open up thousands of affordable homes to the city’s workers.”
Research she has seen indicates thousands of houses across the city could be eligible to be reclaimed and made affordable, Norwood said. She indicated as much as 75 percent of the houses in Atlanta’s southern and western portions would fall in the median home price value if re-evaluated to true market value.
Norwood said she has presented the plan to the Greater Atlanta Home Builders Association, construction trade groups and mortgage companies.
RealtyTrac.com reportedly had earlier this month listed 7,100 bank-owned, foreclosed homes in the Atlanta metro area. The Department of Housing and Urban Development reports it alone has 145 vacant houses inside Atlanta.
The neighborhoods most affected by mortgage fraud and foreclosures in Atlanta include West End, Westview and Pittsburgh.