The Other America - Chapter 59

Good News For South Bend

Near the end of May the South Bend Tribune ran an article which contained some good news for the residents of South Bend. Mayor Steve Luecke announced a two prong plan to address a serious problem of abandoned houses in the city.

This issue is near and dear to me. In 1991 I bought an inexpensive home near Riley High School. The home needed a lot of work. I was poor but skilled in home renovation. Slowly I worked on my home. There were other people doing the same in the area A very odd experience in the early years is that a house nearby might be standing when I left for work, but had disappeared by the time I got home. The neighborhood was kind of scary early on too, but then after a severely protracted period of time the South Bend School Corporation got the OK to build a new Riley High School.

As a result, my home is much closer to Riley High School than it was originally. The other results were that several not so nice dwellings and the infamous “All Hours Liquor Store” (replete with its welcoming Plexiglas shield for its clerks) felt the teeth of the excavator bucket and are no more.

There was a brief spurt of revitalization after that. Owner occupants and at least two responsible developer/landlords worked on upgrading the housing stock. The effort plateaued after a while, but in general the neighborhood was much improved.

Then came the infamous property value reassessments. In the neighborhood I’m talking about properties are typically assessed at or above market value. In the more desirable neighborhoods, assessed value is more like 70 – 80 % of market value. I know this because I work in the local real estate industry. If you’re not an owner occupant, you get no property tax reductions or deductions, so in the case of my home I would need to collect almost $200 a month from a tenant to cover property taxes alone.

One might think that my little renovated three bedroom home in an OK neighborhood would be a great candidate for the Section 8 housing assistance program, but the allotment available to the sized family I’d want to rent to is about $550 a month. That doesn’t leave much to cover my principal, interest, insurance and maintenance expenses – let alone improvements and (god forbid) some small return on my investment of time and treasure.

Not surprisingly, many homes in the area were walked away from. These cheap homes got to be too expensive. There is a block nearby which features only vacant lots or vacant homes. On the same block as my house, there is a derelict home mostly destroyed by arson almost two years ago festering – an ugly wound on the neighborhood.

The South Bend Tribune publishes property crime (burglary and theft) reports each Sunday. Surprisingly, this neighborhood has a pretty low rate of both property and violent crime. But it’s ugly. If you could afford to live somewhere else in the city, you likely would. And that’s bad for South Bend.
Back to the Mayor’s plan. It targets nearly four hundred abandoned properties for demolition in the next three years. This is important. It attacks the “ugly” issue I referred to in otherwise decent neighborhoods. He identifies clear funding sources and I’d suggest anyone interested review the plan at the South Bend City homepage.

What’s referred to as the centerpiece of the strategy, I’m going to withhold judgment of. The Tribune mischaracterizes it. I quote, “The city will also bring back a $1 home program, which was previously a federal Housing and Urban Development program. The city will target 45 properties for this program over the next three years, selling houses to nonprofits, homebuyers or developers for $1.”

I remember the program referred to well, but the HUD program was aimed at homesteaders, using sweat equity to improve properties. The city of South Bend has a different idea in mind when you review their press release. The city plans to identify certain properties as “distinctive”, offer them to non profits with the requirement that they market the properties at $1. There are a number of requirements after that, but the one that jumps out at me is a minimum investment of $75,000 in renovations in each property. The number seems pretty arbitrary, particularly in view of the fact that this number creates a total which implies a 50/50 public private investment. And I’m assuming the city’s term of “distinctive” is shorthand for large and old.

The problem is that it is entirely possible that – judging from the neighborhoods these are likely to be in – the properties may not have a market value of $75,001 when they’re done. If so, they won’t be so attractive.

In any case, even if I’m right about that, I still like the program. Some tweaking may be needed, but this is an aggressive approach designed to attack a long standing problem in our city. The mayor and his staff deserve credit for that.

Don Wheeler
South Bend, IN