An ambitious foreclosure recovery program in Brooklyn Park has transformed some of the city's worst homes into some of its best.
Move-in ready was a must-have for first-time homebuyers Emily and Javier Arias.
Emily was seven months pregnant with their second child, and the couple knew they wouldn’t have time to deal with immediate repairs or improvements.
They found just what they were looking for in Brooklyn Park. The house had been built in 1976 but was freshly renovated, with features many first-time buyers can only dream about, such as granite countertops, pristine new bathrooms and brand-new stainless-steel appliances.
“It was just ready to go,” Emily said. “We knew we wouldn’t have to take on projects right away.”
The Ariases loved their house at first sight, but had they seen it earlier, they wouldn’t have felt that way. It was a rundown rental property that had gone into foreclosure. “The neighbors told us it was terrible,” Emily said.
The home’s transformation was overseen by the Brooklyn Park Foreclosure Recovery Program, created to improve the city’s housing stock and attract buyers to formerly blighted properties.
“Our goal is to bring them into stable homeownership — to turn the worst house on the block into the best house on the block,” said Emily Carr, economic development specialist with the city.
Many cities have programs to deal with distressed houses but Brooklyn Park’s recovery program is ambitious for a city its size. Over the past five years, the city has collaborated with five development partners to completely renovate about 170 foreclosed homes and has sold almost all of them, many to first-time homebuyers like the Ariases.
Still, the rehabbed homes represent only a fraction of the 4,500 homes in the city that have gone through foreclosure. “We could never redo them all,” Carr said.
The city loses money on each house it rehabs — about $30,000 per home, on average. “It costs more to remodel them than we can sell them for,” Carr said. “Grant money fills the gap.” The program is financed, in large part, by federal funds through the Neighborhood Stabilization Program (NSP).
Response from residents has been mostly positive, Carr said. “Neighbors [of problem properties] will call and say thank you.” The city has gotten a few calls from residents concerned that their local property tax dollars are being used to rehab someone else’s home, but “once you explain that it’s grant money, they’re happy,” she said.
Brooklyn Park’s rehab effort was born during the depths of the recession and housing meltdown. In 2009, when the program was launched, one in five Brooklyn Park homes had gone through foreclosure, the highest rate in the metro area. Neglected bank-owned houses were dragging down neighborhoods.
“The grass was not getting mowed. Exteriors were not being maintained,” said Alisha Strowbridge, project facilitator in the city’s community development department. “When the banks were bombarded with foreclosures, we couldn’t even find a representative to talk to. ... Either we did something, or the houses sat there and got worse.”
When the NSP money became available, the city decided to use it to help finance upgrades to problem properties rather than tearing them down, as some cities were doing.
The makeovers are more than skin-deep, with substantial improvements designed to make the houses more livable for years to come.
“Private investors just spruce up with paint and carpet — a minimal investment, just to flip it,” Strowbridge said. Homes rehabbed through the program get cosmetic enhancements, but also updated plumbing, wiring, windows and insulation, plus new roofs and siding if they need it.
“These are not flips but a transformation,” said Jason Stockwell, a ReMax Results agent who has sold some of the rehabs. “It’s not just fluff.”
Because the program also receives some state funding, rehabs must meet Minnesota Housing standards. “Every house has an energy audit,” Strowbridge said, and all are tested for lead and radon, “to make sure the house is healthy. Most buyers are families with kids or people planning to have kids.”
All homes rehabbed through the program must remain owner-occupied for at least 30 years.