Collingswood has a new approach to try to fill some vacant properties. It's risky, but worth watching.
In this brave new world where New Jersey stares at thousands of vacant homes every day, but bemoans a lack of affordable housing, towns are starting to come up with creative solutions.
Empty homes remain nationwide despite the partial return of a healthy housing market. New Jersey, where the mortgage crisis hit later than most states, has a particularly intense problem with vacancies right now.
Enter Collingswood, which has decided to be remodeler of last resort. It will fix up about a dozen vacant homes borough-wide, and will seek to resell them. The borough has partnered with a Camden-based nonprofit, the St. Joseph's Carpenter Society, to rehab the homes.
Collingswood is using the state's 2004 Abandoned Properties Rehabilitation Act aggressively in order to put the units back on the market. Unless an owner pipes up and takes responsibility for a property, the borough can rehab it, then petition a court to sell it to someone new. If the original owner tries to retain one of these properties post-rehab, they'll have to pay Collingswood back for the renovations.
"The problem we're trying to address is the number one problem for every municipality in New Jersey," says Mayor James Maley, who has also been a redevelopment consultant to other area towns.
Collingswood's approach requires fairly deep municipal pockets, great faith in the housing market and taxpayers with cast-iron stomachs. The best-case scenario is that the borough will rid itself of eyesores that threaten community stability. The worst-case scenario is that the borough will sit on a dozen or more of homes that it can't sell. The money for the rehab work, $200,000 so far, comes directly from Collingswood's capital budget.
New Jersey towns already become the real estate broker of last resort when they acquire property through tax liens. But, because these properties are sharply discounted, speculators usually snap them up quickly at below-market value and pay the back taxes. When $20,000 or $30,000 in improvements is added to the minimum asking price, disposing of such homes becomes a gamble.
Collingswood is a desirable community, so its plan may work. In general, though, public entities tend to get burned when they try to play "flip-this-house" in the style of late-night-TV real-estate gurus.
The safer course for most towns is to make sure all vacant homes are inventoried, kept presentable enough on the outside to prevent neighborhood blight, and secure enough on the inside to inhibit mold and squatters. Gloucester County has contracted with a firm that will track down and contact lenders or other responsible parties at a nominal fee.
Of course, that's a temporary solution that doesn't connect a house with a family that needs one. We'll be watching what happens in Collingswood with interest, but also the caution that it may not be for the faint of heart.
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