A foreclosed home not only damages the family who lost their homeowner dream, but also directly affects neighborhoods by immediately decreasing their property value by an average of $5,000. Many homeowners who have struggled to make their payments on time have seen their property values decrease through no fault of their own because of the foreclosures on their street and neighborhood.
Today, U.S. Senator Jack Reed (D-RI) introduced the “Project Rebuild Act” in the Senate Floor, asking for the support of his colleagues in addressing the foreclosure problem, continue revitalizing neighborhoods and creating jobs throughout the country. President Obama’s first proposed Project Rebuild as part of the American Jobs Act. It would allocate $15 billion ($10 billion in formula and $5 billion in competitive) to purchase, rehabilitate, demolish or redevelop foreclosed, abandoned, or vacant properties.
Project Rebuild builds upon the already successful Neighborhood Stabilization Program (NSP), which is on track to create nearly 90,000 jobs and address nearly 95,000 vacant and abandoned properties throughout the country. Project Rebuild also incorporates key changes from NSP that will allow for more significant local economic impacts and more job creation. First, it allows for the rehabilitation of commercial properties, which is a critical anchor to the complete recovery and revitalization of some neighborhoods. Second, it allows for-profit partners to participate in the rehabilitation of both commercial and residential properties. This allows for-profit partners to hire more sub-contractors and other workers who can assist in the rapid rehabilitation of the properties.
It is estimated that Project Rebuild will create nearly 200,000 jobs and impact 150,000 properties nation-wide. Each state will receive a minimum of $20 million of the $10 billion in formula funds. Beyond this baseline, funds will be targeted to areas with home foreclosures, homes in default or delinquency, and other factors determined by HUD, such as unemployment, commercial foreclosures, and other economic conditions.
The bottom line is that Project Rebuild will put construction workers back to work by rehabilitating homes, businesses, leveraging private capital and other public-private collaborations, and giving real estate agents the opportunity to show and sell homes once again.