Notice of Application for NSP2 Funds—Brooklyn, New York
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Application for Neighborhood Stabilization Program 2 funds—American Reinvestment & Recovery Act of 2009
Applicant: Habitat for Humanity International
Web Address: WWW.HABITAT.ORG
Web Address for Additional Information: http://www.habitatnyc.org
Statement of intent
Habitat for Humanity International intends to make an application for Neighborhood Stabilization Program 2 funds to the U.S. Department of Housing and Urban Development. Awarded NSP2 funds will be used in activities that will rapidly arrest the decline of targeted neighborhoods that have been negatively affected by abandoned, foreclosed, and vacant properties. HFHI’s application will be national in scope, and will utilize the services and capacity of Habitat for Humanity – New York City to complete NSP2 activities within two Brooklyn neighborhoods.
All NSP2 funds will be used to benefit individuals whose income does not exceed 80% of Area Median Income. At least 25% of NSP2 funds will be used for purchase and redevelopment of abandoned and foreclosed-upon homes and residential properties to house individuals and families whose incomes do not exceed 50% of area median income.
Amount of funds
NSP2 funds will be awarded through a national competition in which eligible applicants will compete for up to $1.93 billion. HFHI will seek funds nationally, of which $15,125,000 is targeted for use within the target geography described below.
The Southeast portion of the Bedford Stuyvesant neighborhood and the northern portion of the Ocean Hill neighborhood; the area bounded by Broadway to the North and Fulton St. to the South, plus census tracts 361 and 365.02 below Atlantic Avenue, all located in Brooklyn.
The proposed target areas are located five miles east of downtown Manhattan in the Ocean Hill and Bedford Stuyvesant neighborhoods of Brooklyn. They are economically distressed areas that have been hit hard by the economic downturn. In Ocean Hill, 68% of households earn below 50% of AMI. In Bedford Stuyvesant, the figure is 61%. Of these households at or below 50% AMI, 28% are moderately cost burdened (spend over 30% of monthly income on housing expenses) and 17% are severely cost burdened. Our focus area encompasses a particularly at-risk population, which has been hit extremely hard by the foreclosure crisis.
The steady rise in the unemployment rate in New York City—the most recent figure places it at 8.7% —has weakened local businesses and has resulted in a destabilization of the economic base of our focus area. In addition our focus area has experienced a 4.5% increase in major crime complaints this year to date compared to this time last year. This high crime rate has hindered stabilization of the housing market which has been experiencing a foreclosure rate of 1 out of every 5 homes. Additionally, very few real estate owned (REO) homes have sold in the past 18 months, indicating a disconnect between the perceived value of these homes and the price the market is willing to pay in the target area. In addition, subprime mortgages make up nearly half of all mortgages issued in the targeted areas of Brooklyn in 2007. This over-valuation of housing, and high concentration of unsustainable subprime loans constitute some of the critical factors causing the foreclosure problem.
NSP 2 funds will be instrumental in stabilizing the economic foundation of the target areas.
Use of funds
HFHI proposes to utilize the capacity and services of Habitat for Humanity – New York City to:
- purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon in order to sell or redevelop such homes and properties (70 units); and
- acquire and redevelop demolished or vacant properties as affordable housing in the identified census tracts (30 units).
The proposed target areas have been destabilized primarily by overvaluation of property and a high rate of subprime mortgages. Vacant lots in the target areas are also contributing to the community blight. Habitat will construct 30 new homes on vacant lots and sell them to low-income homeowners. Additionally, it will purchase, rehabilitate and sell 70 properties to low-income families.
Habitat is working closely with the City of New York to transform target areas. The city will provide tax-foreclosed lots for new construction and down payment assistance to Habitat homeowners. Habitat has constructed 41 homes in the Bedford Stuyvesant target area and will begin construction on 16 additional non-NSP funded houses in July 2009. In Ocean Hill, Habitat is completing a 41-unit affordable housing project this year. NSP 2 funds will be vital to increasing the economic stability of the target areas.
Please note that the opportunity for public comment has closed.