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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.habitatla.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 Redevelopment. 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 – Greater Los Angeles to complete NSP2 activities within the Los Angeles metropolitan area in the cities of Lynwood and South Gate.
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 $28,743,000 is targeted for use within the target geography described below.
In the LA metropolitan area, HFHI proposes to work in two cities: Lynwood and South Gate, which are located about 12 miles southeast of downtown LA. Both are adjacent to a section of the city that was included in NSP1 and is being proposed in NSP2. HFHI’s efforts will bolster the city of LA’s program.
In Lynwood and South Gate, unemployment has historically been higher than the Los Angeles County average and has increased to 14% in South Gate and 17% in Lynwood. The local economy in these cities is projected to lose 3% of its jobs from 2007 to 2010. Over 22% of all family households in the target area are under the poverty level. Approximately 91% of the residents in these tracts are Hispanic. Educational levels are low and overcrowding in existing housing is prevalent. The population density is so extreme, it is over seven times greater than that of Los Angeles County as a whole. The percentage of residents that are homeowners is less than 46% and declining.
Housing affordability is one of LA’s greatest challenges, especially since the recent declines in market values have made housing affordability worse. Subprime lending practices also appear to be a major factor for the current state of these cities. HUD NSP data shows that 25% of all loans in the selected census tracts were subprime in 2008. Recent sales of foreclosed properties have been steady but a majority of the properties are being purchased by private investors who are renting them at high rates to residents. NSP2 funding will be a critical part of increasing affordable housing options for the population of the proposed target areas.
Use of funds
HFHI proposes to utilize the capacity and services of Habitat for Humanity – Greater Los Angeles to:
- establish financing mechanisms for purchase and redevelopment of foreclosed-upon homes and residential properties (at least15 units);
- purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed-upon in order to sell or redevelop such homes and properties (at least 60 units); and,
- acquire and redevelop demolished or vacant properties as affordable housing in the identified census tracts (27 units).
A mix of factors including high rates of subprime loans and foreclosures; the high cost of housing caused by investors who have acquired large numbers of properties and are charging high rents; and, overcrowding have all contributed to the decline of target areas in the cities of Lynwood and South Gate. These two cities, which are contiguous to Watts (a residential district in the City of Los Angeles) and Compton (which both received direct NSP1 allocations), have been hit hard with high unemployment, foreclosures and blight.
With NSP 2 funds, Habitat will provide at least 15 loans and other forms of assistance to low-income homeowners seeking to purchase and rehabilitate or add additional space to these homes. Habitat will purchase, rehabilitate and sell at least 60 houses to low income families. In addition, as part of its adaptive reuse strategy created because of the limited availability of land, Habitat will redevelop an aging church into 20 affordable condominium units. Also, 4 new houses will be built on vacant lots and sold to low-income families. In addition to the proposed NSP2 funded activities, Habitat will build 6 new houses and rehab 6 existing ones.
Habitat is coordinating with the cities of Lynwood and South Gate who have identified the target areas for revitalization in their area community redevelopment plans. Over the past two years, Habitat has built and rehabilitated 20 homes in Lynwood for families earning at or below 60% AMI, and will develop 13 more in 2009. NSP2 funds are an important part of Habitat’s and the cities’ strategies to increase the availability of affordable housing for low-income families.
Please note that the opportunity for public comment has closed.