New initiative could provide more than $351 million to help Illinois overhaul distressed neighborhoods and commercial properties
Rockford, IL–(ENEWSPF)–April 4, 2012. In an effort to stabilize neighborhoods, rehab vacant and foreclosed homes and businesses, and create jobs, U.S. Senator Dick Durbin (D-IL) pushed for passage of the Project Rebuild Act while visiting Rockford yesterday. The legislation would help rehab houses and businesses that have been abandoned through foreclosure by providing targeted assistance through formula funding and new competitive grants. The U.S. Department of Housing and Urban Development (HUD) estimates that Illinois could receive $351 million in Project Rebuild formula funding, as well as additional funding through the competitive grant process.
The Project Rebuild Act expands on the successful Neighborhood Stabilization Program which has already helped several of the hardest hit communities across Illinois – including Rockford – rehab and demolish vacant, foreclosed homes.
“Some vacant, foreclosed homes are boarded up with overgrown grass and obviously unoccupied. Other vacant, foreclosed homes are less obvious, but their impact is just as damaging to the local community. These properties can attract crime and decrease surrounding property values, creating a domino effect that seems never ending,” Durbin said.
Since 2006, housing prices across the country have decreased over 30 percent, which has resulted in one in five homeowners being underwater on their mortgage. It is no different in Rockford where housing prices have declined by 27 percent since 2006.
“No one wins when businesses and homes are foreclosed on,” said Durbin. “Not the owners who lose their properties, not the surrounding neighborhood when no one maintains the property, and not the local community when property values drop. The Project Rebuild Act will put Illinoisans back to work helping local governments redevelop and revitalize Main Streets and neighborhoods across our state.”
Under the bill, which is sponsored by U.S. Senator Jack Reed (D-RI), about $10 billion would be directed to states, cities, and non-profits through a formula modeled on the successful Neighborhood Stabilization Program (NSP) and an additional $5 billion would be available through new competitive grants. Expanding on the bipartisan Neighborhood Stabilization Plan, the Project Rebuild Act would offer new grants for fixing up vacant commercial properties and strives to complement the abilities of private developers. It would also increase support for “land banking.” Land banks work with communities to buy, hold, and redevelop distressed properties as part of a long-term redevelopment strategy. Nationwide, HUD estimates Project Rebuild would create over 190,000 jobs and be used to renovate 150,000 properties nationwide.
Summary: The Project Rebuild Act
- is designed to create jobs, stabilize neighborhoods, and reduce vacancy;
- leverages the success of the Neighborhood Stabilization Program (NSP) while making critical changes to scale up, address commercial vacancies, and leverage capacity in the private sector; and
- proposes a $15 billion allocation: $10 billion for formula allocation, $5 billion for competition.
Project Rebuild is the Next Generation of NSP
Project Rebuild will continue NSP’s proven record of success, but with important modifications. For example:
- It broadens eligible uses to allow commercial projects and other job creating activities, capped at 30 percent.
- Up to 10 percent of formula grants may be used for establishing and operating a jobs program to maintain eligible neighborhood properties.
- 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.
It would also increase support for “land banking.” Land banks work with communities to buy, hold, and redevelop distressed properties as part of a long-term redevelopment strategy. Reed’s bill would help more communities utilize successful land bank models.
Project Rebuild: Scaling Up Neighborhood Stabilization to Rebuild our Economy
Project Rebuild will provide funding to purchase, rehabilitate, and/or redevelop foreclosed, abandoned, demolished, or vacant properties. Funding can also establish and operate land banks or demolish blighted structures.
Project Rebuild will support an estimated 191,000 jobs and treat at least 150,000 properties across all 50 states.
HUD will announce formula funding allocations within 30 days of Congressional enactment of Project Rebuild, complete the competition, and obligate all funds within 180 days of enactment. Grantees will have three years to spend 100 percent of funding. HUD will establish further benchmarks for expenditures at one year and two years.
Formula funding will go directly to states and entitlement communities across the country. Competitive funds will be available to states, local governments, for-profit entities, non-profit entities and consortia of these entities.
Strict standards of oversight will ensure good stewardship of these funds. HUD will strengthen existing accountability procedures by requiring that grantees have an internal auditor to continually monitor grantee performance to prevent fraud or abuse.
Grantees will be required to provide quarterly progress reports and HUD will recapture funds from underperforming or mismanaged grantees to reallocate those funds to areas with greatest need.