Tuesday, March 23, 2010

Knox Hill proposes creation of CRZ districts

The Knox Hill Neighborhood Association has prepared a draft document recommendation that they hope the State legislature could adopt in the future that would set a framework for recovery of Urban neighborhoods hit hard by the foreclosure crisis and reverse the "blight abatement' policies of many cities that are destroying the historic fabric of this state.


Knox Hill is proposing the creation of CRZ Districts (Community Reinvestment Zones districts). CRZ districts would be designated urban neighborhoods with high rates of foreclosures that would be targeted for fast track turnaround that would bring together a variety of strategies to spur reinvestment and redevelopment. CRZ's would be a partnership between state and local governments with local community groups to provide grants, loan pools, insurance pools and to cut local governmental red tape that hinders Urban neighborhood development. Knox Hill will be soliciting input from similar urban neighborhoods across the state to come up with a full proposal to send to state legislators for creation of a bill that would establish CRZ districts:

The Draft CRZ proposal:

A change in strategy and a comprehensive approach: CRZ Districts

The largest obstacle to neighborhood turnaround is the large volume of property ordered kept vacant by the cities. Neighborhoods can not turnaround given the current property values in the area with the added cost of local city regulatory fees.

The activity conducted many cities under current use of code enforcement amounts to ‘governmental redlining” of neighborhoods. Because of the high number of foreclosures and city ordered kept vacant property banks are reluctant and have a legitimate reason to deny loans based on neighborhood condition and appraisals.

So the question becomes what incentives can be done to encourage redevelopment.


Legislative action either at the local or state level for neighborhood with high levels of foreclosed/vacant property to be declared “Community Reinvestment Zones’.

CRZ districts would have the ability to fast track redevelopment and restoration by a process of incentives both local, state and federal to encourage redevelopment and reinvestment in the area.

These CRZ districts strategies would include:

· Change of VBML orders to “repair orders”.
· Reduction or elimination of Permit Fees in a CRZ district.
· CDBG, NSP or Local Capital Improvement Funds to be used for repair not demolition
· Elimination of delinquent property taxes as an incentive to buyers (could be paid for by some form of state or federal redevelopment funding)
· Liability insurance pools to help homeowners obtain affordable liability insurance
· Working with local lenders to create “Small loan programs’ dealing with small project loans of 5,000.00 -25,000.00 for home repairs.
· Fast tracking of current vacant lots to ownership by action on demo liens. These lots would be sold to adjacent home owners, 1st priority, Community groups, 2nd priority (for community gardens and thumbnail parks), Investor/builders, 3rd priority, with conditions to build infill housing.
· Special police patrols to target high crime areas and to coordinate crime watch programs
· Increase of local penalties for illegal dumping
· Federal and state monies for infrastructure improvements like sidewalk repairs and lighting
· Creating of “paint up/ fix up grants” for low income and elderly home owners to maintain their properties
· A 3 year 5000.00 maximum per year state tax credit for buyers of foreclosed property who are restoring those properties and can demonstrate investment via receipts.
· Quarterly neighborhood cleanups through city.
· “Adopt a House” program where community groups, churches and businesses could donate time to elderly homeowners needing assistance with maintenance.
· Co-ordinate with local school technical trades programs to create a “Youth in Preservation Program” to teach restoration skills to youth as part of a schools technical trades program.
· Establishment of a FLIP program where local neighborhood group would obtain properties (possibly from a county land bank program) and with volunteer labor stabilize homes and then resell them with protective covenants to owner occupants. This would become a revolving fund.

Establishment of a CRZ district would be for a 5 year period with a 3 year extension renewal available.
Summary

The current Urban planning model of “Blight=Bulldozer” and roadblocks to redevelopment currently in use by cities will no longer work given the changing real estate market we are in today. Cities much take new approaches to encourage reinvestment and must understand that given the real estate market home buyers are taking the financial risk in those economically disadvantages areas by moving in. The State of Ohio at a legislative level should create a climate for reinvestment and provide reasonable incentives to encourage cities to establish CRZ districts. Care must be taken to retain long-term existing owners and provide resources to make it possible to stay in their home. We must one again think of areas not as collection of houses but rather as communities, which must be nurtured and rebuilt.

In the long run, cities will ultimately benefit. Small concessions in the areas of delinquent taxes, reduction in permit fees and such will be regained when vacant homes are returned to occupied homes. Property values will increase and the tax base will be restored. Stronger well-kept communities will eventually encourage developers to build quality infill housing and the ‘gaps’ left in the Urban Landscape will be filled in.

It will however take a ‘seed change’ a change from an adversarial punitive approach to property maintenance by city inspectors to a Neighborhood building approach with the CRZ district.

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