Congresswoman Maxine Waters, D-Calif., introduced legislation to prevent the deterioration of neighborhoods filled with foreclosed and abandoned properties. Property preservationists warn the legislation, while well-meaning, may not attack blight as comprehensively as a new law could.
The goal of the act is to provide funding for the rehabilitation of these neighborhoods to prevent plummeting home prices and lower quality of life for homeowners, according to Waters.
"Foreclosures are not only a tragedy for the families that lose their homes, they are a calamity for entire neighborhoods. Foreclosed properties are often boarded up, stripped, and vandalized, beginning the process of turning decent communities into blighted ones," the congresswoman said.
She added, "Foreclosures cause housing prices to drop, hurting other homeowners as well as entire cities and towns. We should make every effort to help families avoid foreclosure – but when foreclosures occur we should do everything in our power to try to minimize more widespread, damaging effects."
The legislation builds on the Neighborhood Stabilization Program, which was signed into law as part of the Housing and Economic Opportunity Act of 2008.
NSP has disbursed $7 billion to communities across the country, rehabilitated more than 100,000 homes and supported 93,000 jobs, the Congresswoman explained.
"NSP was designed to address a glut of abandoned and foreclosed properties across the country which devastated communities by dragging down property values, increasing municipal fire and police costs, and causing the critical loss of property tax revenue," a release by Waters noted.
However, some market experts aren’t fully sold on the proposed legislation by Waters.
Robert Klein, founder and chairman of the board for Safeguard Properties, told HousingWire that while the bill is great in theory, it should be redefined because each distressed neighborhood is different and "there’s not a silver bullet" for all areas.
"You’re not going to rehab the properties unless you demolish what is needed. Rehab and demolition go hand in hand," Klein said.
Additionally, Klein pointed out that land banks should be involved with the restoration of distressed neighborhoods.
"She needs to think deeper and find out why and when it [rehabilitation] should happen and, more importantly, if it should happen at all," Klein stated.