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POLL: Should Surf City buy & sell foreclosed homes?
December 13th, 2008, 12:00 pm · 24 Comments · posted by Marilyn Kalfus, real estate reporter
Huntington Beach may buy foreclosed homes, fix them and then sell them to city residents who qualify for affordable housing. 
The City Council votes Monday on whether to start a foreclosure purchasing program. The hope is that it would pump money into the city by generating more in property taxes, fill homes standing vacant and help meet the city’s affordable housing quota.
Some real estate experts I interviewed on Friday gave the idea a thumbs-up.
But they had some concerns, too. How would the plan be executed? How would low-income families qualify for loans? And how will the new homeowners sustain the properties?
You can read the full story HERE.
What do you think? Take the poll, below.
Want to give your reason or a different answer? Share them in the comments.
Read more:
24 Comments
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1st
Who will decide who can buy? Will there be deed restrictions?
If Paulson and Bernanke stopped trying to support the past bogus home values, the market would self correct to levels of affordability. Instead, these idiots in our govt are doing all they can to keep housing unaffordable and overvalued based upon income levels.
I voted No, but I wanted to vote HELL NO.
Absolutely not! Huntington Beach employees can’t buy a house anywhere near Huntington Beach, continue to pay more for healthcare (now paying what every citizen outside government work does), and are now longer receiving raises. (Unless of course, you are a firefighter or sworn police officer) The city needs to quit wasting tax payer money on “feel good” training seminars and pay their employees what other municipal government agencies do and stay out of real estate. Didn’t we learn anything from our infamous Pamela Houchen? Don’t get anywhere near real estate!
Do what you’re meant do. Offer citizens the services you were designed to provide and pay the employees what they rightfully deserve so they are treated with respect and then do the same in return for the citizens.
What a novel idea. If a city can buy foreclosures, fix them up, and sell them why not.
Cities don’t & can’t rehab property correctly even if they had a PhD.
They would loose money on 100% of all deals.
Why would anyone want to turn HB into another Long Beach, or LA? We’ll end up being aonother “Santa Ana By the Sea” or “Anaheim by the sea”. Besides, isn’t the current problem in the housing market caused by low income buying what they couldn’t afford? We didn’t put these people in office to turn around and down grade our city.
What are the criteria for low income families? Isn’t that what costa mesa/santa ana housing is for? People in HB work hard to afford their homes, now we’re going to put people in them who don’t earn it? No thanks.
But wait!. It is not a novel point of view stated by another writer to suggest that “home values” were bogus and that a “drop” in the investment porfolio, so to speak, Home Equity, of millions of homeowners is a “good thing” to make their homes “affordable” for everybody else? Those Equities represent appreciation of homes purchased in the same economic challenges of affordable price, terms and conditions of available mortgage loans, and that return on investment over debt.
Those Equities were consumed by CRIMINAL GREED, unchecked by enforcement of existing regulation to prevent “irrational lending practices” nor addresed by required regulation to curtail them, and BOTH POLITICAL PARTIES are responsible, compounded now that $Billions have reimbursed losses of the institutions responsible for those lending practices, the volume of fees having s supported their operations, salaries and bonuses, while “high flyiing” investors got trapped with the unwary when the market tumbled and they were unable to “flip” out!!
It was the magnitude of foreclosures causing this tsumani, and the same politicians of BOTH parties responsible ducked for cover; shuttling tax dollars for recovery of institutions responsible with no strings now employed for expansion, and further growth, and not the favorable financing critical to this economy. And the political indications of the massive political contributions of those supposedly representing our interests? Value is the willingness of buyers and sellers to agree on price and terms.
In our financial systems, the stockmarket produced rewards for astute investors , many of whom were wiped out by this carnage created by CRIMINAL CONDUCT unchecked and continuing a FREE RIDE for those with no threat of criminal prosecution and financial reparations?
“jack smith Says:
December 13th, 2008 at 7:33 pm
If Paulson and Bernanke stopped trying to support the past bogus home values, the market would self correct to levels of affordability. Instead, these idiots in our govt are doing all they can to keep housing unaffordable and overvalued based upon income levels.
My thoughts as well. I this conclusions seems self evident. The bottom line is that those for folks who took out convential mortgages (30 yr fixed) whose amount was based on traditional lending standards are not at risk of losing their homes if prices go down. The only folks who are impacted are those folks who were not qualified to purchase the homes that they did. I don’t understand why they want to keep these idiots in homes they never should have bought in the first place while pricing out responsible buyers. This is completely unfair and wrong.
Its called Neighborhood Restabilization Program and is being used in several CA areas. The positive side allows the city to maintain the Mandatory Affordable Housing requirements, reduce crime (city expenses and citizen safety) and return property taxes to the city coffers. It does restabilize the neighborhoods and certainly the streets these properties are on will appreciate the upgrade. In the long run all properties are going to return to 1998-99 valuations anyway. Yep…they are.
Why do so many comments reflect a sour and bitter attitude when its thought someone might be getting a decent deal on anything. The city is not spending money that it won’t get back, in fact it should get a nice little return on the deal. Who’s going to be hurt by that?
It’s true governments aren’t usually efficient at business deals–but the foreclosed homes need to be bought and maintained and people need to be able to buy homes. The ratio of home prices to incomes has skyrocketed– this is not a good thing.
I think this idea shoud be tried.
Wes Says: What are the criteria for low income families? Isn’t that what costa mesa/santa ana housing is for? People in HB work hard to afford their homes, now we’re going to put people in them who don’t earn it? No thanks.
Jan In HB Says:Why would anyone want to turn HB into another Long Beach, or LA? We’ll end up being aonother “Santa Ana By the Sea” or “Anaheim by the sea”. Besides, isn’t the current problem in the housing market caused by low income buying what they couldn’t afford? We didn’t put these people in office to turn around and down grade our city.
Hey, with the “Tudes” : Every third & fourth generation Cali knows a good part of HB was built on old oil wells and seepage. Not til people forgot what was there did developers have a chance to profit bigtime. That sea ambiance isn’t all sea aroma, not to mention the water table contents. Of course this isn’t the only area that has a distinct history, but old farmland seems much more desirable.
Some believe in big government and others believe in small government. This is big government at it’s worst!
Buying homes (does government do a good job of negotiating good prices)?
From which banks and individuals (friends of politicians, kick backs)
Who does the government contract with to fix up the homes? (again friends, relatives, business partners, over paid city employees)?
Who gets to purchase the newly refurbished properties significantly below market value (again a mess).
Why do we have affordability housing rules? What’s wrong with an efficient market where the harder you work, the more you save, the less you spend, the more options you have to choose the location, size and ameneties of your house?
Keep corrupt local politicians and bureaucracies out of housing. That’s what got us this horrible Financial mess to begin with.
Another attempt by the government… When will they ever learn?
Maybe they can buy a whole bunch at one time, and get a lower price for them.. and then turn around and sell them cheap (at the same price?).. even though selling one by one.. they need to get lower! when prices return lower than rent.. you’ll see the demand just pick up (more than supply)..
btw, if city can’t sell them? or can’t sell them for what they pay? who’s loosing? tax payer? local government? BK soon for OC!
Maybe the city can soon buy cars of the dealer lots too!
or maybe starting giving out loans.. refi?
the government model is changing.. pretty soon no banks folks!
Why not just give the 1% loan directly to people, take out the banks! We’ll lend it to ourselfs!
So basically, they want to have PROJECTS in Huntington beach??? Yeah, that should bring prices up all over HB!!!
Why should the city spend money to keep house prices high? They either spend so much that they could not profit from higher property taxes due to high costs, ot they spend less, which will lead in the end to same low prices that the market would come to. Leave the market alone to find the right price, but insist on proper upkeep of properties - otherwise fine the owners, until the property is the city’s anyhow.
Could the city qualify for the loan? WIll they pay their prop taxes on time?
Government has no business being involved in the residential real estate market. Especially so with the goal of “helping” people buy so called affordable housing.
No where in the Constitution do I see anything about the right to own a home. If you can’t afford one on your own, you should rent.
That is what my parents did as I grew up…I now own a home free and clear.
By the way, who in the government is going to choose the winners and why would be have any hope this process would be fair and open…can you spell Blogoyavich?
This is criminal. If you want low income people to be able to afford homes, let the prices fall. I don’t make enough to buy a house in Huntington Beach but I make too much to qualify for HUD. This is a pathetic attempt for the politicians in Huntington Beach to artificially prop up prices and pretend “it’s different here”.
Anytime government intervenes in the housing market–either as purchaser or as lender–it sends false pricing signals. Fannie and Freddie and hundreds of redevelopment areas are good examples of the disasterous outcomes of government playing role of real estate investor and developer.
Ask the city if it has ever paid too much for property in HB, developed or not, in the past? They certainly have. What is the city’s track record on prior affordable housing projects? Have they been able to enforce deed restrictions in the past? How many families have been helped? What determines a successful placement? What is criteria for placement? How many bad choices in life does someone need to make to earn subsidized housing? Will those with disabilities be considered eligible, perhaps the most deserving of all the crippled victims of crime, disease or accident who can no longer provide for themselves? How do you possbily choose among all the innocent homeless children?
By purchasing homes now, the city will unwittingly uphold higher prices than market may bear at this point and would in effect be making all housing less affordable.
The idea that subsidized housing or workforce housing is necessary and should be provided by government is part of a larger public policy debate. Where do the employers fall in the debate–they don’t. but some who can’t relocate operations are beginning to step up and provide employee housing such as Cal State Fullerton, UC Irvine, the Ritz Carlton, and some hospitals I beleive.
More immediately, the city should decide now whether or not subsidized housing as a state mandate should take the form of ownership or rental–by pushing the ownership model, HB is tying up hundreds of thousands of dollars for the benefit of a few–a handful even–of families who can be seen, however deserving, as winning the “housing lottery” and who will never have reason to move out because they won’t be allowed to benefit from any value appreciation in the home. By creating more rental and multi-family stock, the city could help many more families.
But the bottom line is the question of whether or not this responsibility belongs to your local government, and whether now, with looming budget deficits is the right time to invest in real estate as an owner with all the costs and expenses associated with that project? When the real estate market is so soft and pricing still sliding, is now the time to buy for a municipal government that should be operating in its most conservative mode? What happens if we have a natural disaster, an earthquake for example. Shouldn’t this money be spent to secure city residents from power outages, downed bridges, and emergency services? Will HB residents be glad to have a few subsidized homes to rebuild after the earthquake or fire?
Finally, someone needs to be clarify on exactly what the mandate from Sacramento is for cities when it comes to affordable housing. Must they build, own, rehab and manage affordable housing? Or, does the law simply require cities to provide the necessary “zoning” to accomodate population growth?