Columbia Heights razes blighted homes, now rebuilding

The city of Columbia Heights used the real estate crash to buy 17 tiny, ramshackle 1920s homes and tear them down. Most were foreclosures with rotting floors, collapsing basements and leaky roofs that were blighting the neighborhood, city officials say.

What was once a neighborhood eyesore may now become the envy of the block.

The city's Economic Development Authority has entered into a development agreement with a realty group and builder to sell 13 of those lots and build new homes on them.

The lots hit the multiple listing service this week.

The new homes will be two stories, with about 1,200 square feet of living space, unfinished basements and detached two-car garages in the rear. They will be priced around $160,000, relatively low for newly built, single-family homes.

"The original goal was to get rid of the worst houses in the neighborhood." Columbia Heights Community Development Director Scott Clark said. "These neighborhoods are really strong. If we can generate some new investment in these neighborhoods, that sends a strong message."

The city also acted out of fear that the substandard, often unsafe homes could be occupied or rented out again some day.

The newly built homes are meant to appeal to first-time home buyers debating between city life and settling in the suburbs. The homes will have three bedrooms and 1½ baths and will resemble a foursquare.

"You will be getting a city-style home, not your classic suburban split-entry home," said realtor Peter Heryla, with ReMax Synergy. Heryla and business partner John Rockwell are selling the homes.

Heryla said there has been a renewed interest in the inner-ring suburbs. People are rethinking long commutes from the exurbs and wanting amenities like nearby restaurants and easy access to shops in the city.

"You do see a resurgence of people wanting to hunker down in the city," Heryla said. "It's just kind of cool to live in the city. It's a nice feel and atmosphere to be close to downtown."

One of the biggest challenges is creating a home design that fits the narrow lots. Most of them are 40 feet wide by 130 feet deep. After required setbacks, homes can be only 30 feet wide. Building up means these smaller lots can accommodate homes compatible with modern living, Heryla said.

TimberCraft worked on a similar project with the city of Minneapolis in the 1990s, building about 50 homes on lots in established neighborhoods.

: "They [Columbia Heights officials] are trying to attract new people coming in as homeowners, not as renters," Peter Murlowski, president of TimberCraft, said. "This is one good way to do it.

"Give them a high-quality product at a nice sale price. … The city now has a new house on the tax rolls. We've hopefully made a buck and its improved the neighborhood."

The city EDA spent about $950,000 buying the 17 old houses. Most of the original homes were 600 square feet or less, Clark said. The city is now selling 13 of the lots to the builder. Most will be sold for $7,500 each. The price may seem low at first glance, but the ultimate goal was to make sure the new home-plus-land price hit the $160,000 price point for appraisal purposes, Clark said. Otherwise, the average first-time home buyer would not have been able to finance one of these homes.

This is why cities get involved with this type of redevelopment, Clark said. These small projects don't generate profit. "If the city would have made money, the private sector would have done it already," he said.