Editor's Note: This story, which originally appeared in El Diaro/La Prensa, was produced as part of NAM's Stimulus Watch coverage and was funded with a grant from the Open Society Institute. It is part three of a three-part series. You can read part one here. and part two here
Elba Reyes with her son in her house
on Harman St. Ph: Eva SanchisNew York -- Elba Reyes, from Puerto Rico, and her husband thought they had found a home to raise their five children when they bought their house five years ago in Bushwick on 59 Harman Street, an area of two-story houses.
However, Reyes, 44, is now having nightmares about intruders breaking into her home and harming her children.
“Once again you can see drugs being sold on the streets; you often hear gun shots,” Reyes said. “I am at home with my children and I hear helicopters and police sirens.”
The economic crisis has left an epidemic of foreclosures in Bushwick, especially in the southern area, where many Hispanic homeowners like Reyes live. Just on her block, three houses have “for sale” signs; another five are abandoned, with boarded-up doors and windows, accumulating trash and graffiti.
“When we bought the house five years ago, it was difficult to get a house in Bushwick that one could afford, but now you walk two blocks and see four, five, six houses for sale,” Reyes said.
Homeowners in the area like Reyes, who paid $285,000 for her house and is up to date with her payments, have seen their home prices sink 45 percent in the last two years, according to data from the Furman Center at New York University. For many, hopes for the neighborhood’s revitalization rest on President Barack Obama’s promised intervention.
The federal stimulus plan approved last year included a $2 billion package to help cities all around the country buy and repair these abandoned houses and offer incentives to potential buyers.
The program, the Neighborhood Stabilization Program 2 (NSP2), seems tailored for a neighborhood like Bushwick, but its benefits are uncertain.
One of the problems lies in the fact that last January, New York City got just $20 million of the $50 million it requested to cushion the impact of more than 59,000 foreclosure processes initiated since 2006 through the city. Of these, almost 1,600 are in Bushwick alone. The non-profit Habitat for Humanity was awarded an additional $10.5 million for projects in Bedford-Stuyvesant and Brownsville-Ocean Hill, in Brooklyn.
“Twenty million in any city wouldn’t scratch the surface, let alone in New York City,” said Craig Nickerson, president of the National Community Stabilization Trust, an organization that facilitates the transfer of foreclosed and abandon properties from banks to local housing organizations.
The cost of buying and restoring a home in New York is very high compared to other cities in the country, explains Arden Sokolow, responsible for supervising the NSP2 program in New York City's Department of Housing Preservation and Development (HPD).
“You read those articles about how houses in Cleveland are selling for $12,000 or in Detroit for $8,000, we can’t do that,” says Sokolow. “Foreclosured homes here are selling for $300,000.”
The foreclosure crisis in the city is not widespread; it is concentrated in certain neighborhoods like the center of Brooklyn or Southeastern Queens. This could explain why it has received much fewer funds from the stimulus plan than other large cities, like Los Angeles, which was awarded $100 million, according to an HPD spokesperson.
“New York City as a whole hasn’t felt the repercussions of the foreclosure crisis as deeply and widely as many other states have, although we have many neighborhoods that are deeply impacted,” said Eric Bederman, HPD spokesperson. “We’re a city of renters.”
To balance out the lack of funds from the stimulus, HPD will use this money to attract private funds for the activities, as it did in 2008 with $24 million from a previous federal program, the Neighborhoods Stabilization Plan 1 (NSP1), which attracted $32 million from the private sector.
In its NSP2 proposal, HPD called for acquiring and rehabilitating 320 foreclosured homes and redeveloping 320 vacant sites, but it will have to scale down its activities now. HPD's Sokolow says they are waiting federal guidance on how to do this.
The city plans to use part of the stimulus funds to help families with low and moderate incomes to buy abandoned or foreclosed homes. A family of two that earns less than $73,680, for example, could apply for the aid, which could be up to $50,000 per building for down payments.
However, residents like Reyes doubt that Bushwick families who earn an average of $31,000, according to the Census, will be able to afford these houses. As an example, Reyes mentioned a nearby two-family house, which was recently restored thanks to a HPD supervised program devised to create affordable housing, which is selling for $460,000.
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