#NATIONAL BLIGHT DEFINITION CODE#

Because the program is completely privately funded, it has no income requirements or limits. The DHM program addresses this problem directly participating banks issue two mortgages, one for 96.5 percent of the property’s appraised value and the other for up to $75,000 above the appraised value. Panelist Krysta Pate of Detroit’s Community Reinvestment Fund USA explained that the city is in a cyclical cash market, which leads to perpetually undervalued properties and makes obtaining mortgage loans difficult. Launched in 2016, the Detroit Home Mortgage (DHM) program - an initiative encompassing nonprofits, the state of Michigan, and eight banks - addresses the appraisal gap in the Detroit housing market. “Investments must be strategically located in tipping point neighborhoods.” FCDC is examining new ways to identify tipping point neighborhoods to help stakeholders throughout the country mitigate local blight. “Addressing blight pays social and financial dividends,” stressed Lockwood. Ultimately, the Grandview North neighborhood gained $6 million in real estate value, resulting in increased annual taxes of $112,000 and a 12 percent return on investment. After spending $1 million to acquire and restore 18 houses with a rehabilitation budget of approximately $46,000 per house, the area’s housing market was reinvigorated. In 2012, after obtaining funding from the Tennessee Housing Development Agency, FCDC began a campaign in the Grandview North neighborhood, a community of approximately 460 houses that FCDC identified as a tipping point neighborhood, theorizing that its mix of blighted and healthy properties would allow the organization to “tip the balance” of the neighborhood toward restored health with a limited number of renovations. Frayser, a community in northern Memphis, has suffered more foreclosures and bankruptcies than any other place in Tennessee, according to Lockwood. Panelist Steve Lockwood, executive director of the Frayser Community Development Corporation (FCDC) in Memphis, Tennessee, described the nonprofit’s success targeting “tipping point” neighborhoods - areas threatened by blight but which still have many healthy properties. In addition to its negative effects on crime rates and property values, blight causes social problems and environmental health issues.īlight’s wide-ranging effects are complicated to address, but stakeholders across the nation are developing and implementing strategies to combat it. “Vacant and blighted properties make people feel less safe and less proud of their neighborhoods,” Graziani reported. Graziani highlighted two recent CCP studies on the effects of blight in Atlanta, Georgia, and Toledo, Ohio, which found that blight costs hundreds of millions of dollars in reduced property values and lost tax revenue and requires millions in safety-related spending. Because lenders rarely approve a mortgage for more than a property’s appraised value, the appraisal gap phenomenon results in market conditions that are more attractive to investors than to owner occupiers, hampering market recovery and replicating ownership circumstances that are more likely to result in abandonment and disrepair.

Underappraisal, or an appraisal gap, happens when the market price of a property is higher than its appraised value because of a lack of recent comparable sales in the area. Buyers have difficulty obtaining mortgages for homes in neighborhoods with blighted properties and low sales because of underappraisal.

#NATIONAL BLIGHT DEFINITION CODE#

The vacancies, in turn, reduce tax revenue for local governments, which respond by reducing public services and functions such as code enforcement, making the area less attractive and fueling further population loss. Economic disinvestment and the withdrawal of industry increase unemployment and worker migration, which lead to vacancy and deterioration, explained Graziani.

On November 2, 2017, the Federal Reserve System presented “ Solutions for Mitigating Neighborhood Blight: Innovations and Policy Strategies,” a webinar in which panelists discussed current research and described successful programs to mitigate the impact of blight and promote neighborhood revitalization.īlight affects all types of communities - rural, urban, and suburban, said panelist Kim Graziani, vice president and director of national technical assistance at the nonprofit Center for Community Progress (CCP).

Blighted properties decrease surrounding property values, erode the health of local housing markets, pose safety hazards, and reduce local tax revenue. Neighborhood blight and the presence of vacant and abandoned properties have profound negative impacts on afflicted communities. In the “Solutions for Mitigating Neighborhood Blight: Innovations and Policy Strategies” webinar, panelists discussed the impact of blight on communities and presented strategies to promote neighborhood revitalization.

National blight definition