Does Anybody in the United
States NOT know that Las Vegas
is one of the Foreclosure Capitals
of the World?
From Channel 8 News:
LAS VEGAS – Nevada leads the way when it comes to foreclosures. But while the northern part of the state got close to $21 million in federal money aimed to help struggling communities, Southern Nevada got nothing.
The program is called the Neighborhood Stabilization Program. The money would ultimately be used to buy foreclosed homes to be resold or rented out to income-eligible families.
From the Las Vegas Sun:
Mayor Angry, Reid Disappointed Las Vegas Denied More Federal Aid for Foreclosures
Rather than help people who were in danger of foreclosure, the money was given to the city to help purchase the homes that were already in foreclosure so they wouldn’t become blighted and allow the city to provide affordable housing, he said.
Some 6,500 homes are going to hit the market in the Las Vegas Valley “and we can’t afford to buy any of them because we don’t have this money,” he said, slamming the grant list down on the podium.
Visit Las Vegas... A city not wasting your Federal Tax Dollars..
The real story here is not how somebody did not know what they were doing when applying for the Federal Money under the new “Neighborhood Stabilization” program and Southern Nevada getting zilch in the current round of payoffs .. its a question of common sense, what the actual program really is, and who authorizes payments in the first place.
Really now… does anybody not know that Las Vegas has had a pretty significant foreclosure problem for the past several years? Is somebody that much out of touch with what is going on?
From the News Story:
Those working on the deal in Southern Nevada now believe they asked for too much money — $368 million.
“$368 million is a lot of money, but when you look at the direct impact of foreclosures for City of Las Vegas alone, 20,000 to 25,000 foreclosures a month, that hardly makes a dent to the foreclosures,” said Steve Harsin with the Neighborhood Services Department.
Officials now say they may have been too ambitious and asked for too much money. The funds from the first round of distributions were supposed to go through non-profits selected for the job, but many admit it’s been a bit of a struggle rolling out the program in Las Vegas and they’re trying to learn from the successes of others areas.
What is the Neighborhood Stabilization Program?
Let’s go straight to the source — Neighborhood Stabilization Grants
The Neighborhood Stabilization Program (NSP) was established for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. Through the purchase and redevelopment of foreclosed and abandoned homes and residential properties, the goal of the program is being realized.
The Nature of the Program:
NSP is a component of the Community Development Block Grant (CDBG). The CDBG regulatory structure is the platform used to implement NSP and the HOME program provides a safe harbor for NSP affordability requirements.
NSP grantees develop their own programs and funding priorities. However, NSP grantees must use at least 25 percent of the funds appropriated for the purchase and redevelopment of abandoned or foreclosed homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose income does not exceed 120 percent of area median income. Activities may not qualify under NSP using the “prevent or eliminate slums and blight” or “address urgent community development needs” objectives.
This is for the reader to decipher and form your own opinion of what it means.
And hey… if you have more questions.. feel free to read the 57 page Q&A section here. Once again… another relief program spelled B-u-r-e-a-c-r-a-c-y.
Back to the Original Article from Channel 8 News:
”Basically, the non-profits are fairly young here. They’re not used to being involved with government, as far as spending the money. That was one of the criticisms leveled at us by the undersecretary,” said Las Vegas Mayor Oscar Goodman.
There may be some reorganization in Southern Nevada to improve and learn from past mistakes. There will be another round of funding coming soon.
Sorry Las Vegas and Southern Nevada… but you don’t know how to spend $368 Million dollars like we do in Washington D.C… Lots of Laughing here. I think that’s more of a compliment then criticism.
On the surface it seems to be unfortunate that there is a money grab going on out there and Southern Nevada / Las Vegas is not getting their fair share. There is truly no Doubt that if Federal Taxpayer Dollars are going to be used to “stabilizing communities that have suffered from foreclosures and abandonment” that Las Vegas / Southern Nevada should receive something… even if the people responsible for filling out tons of paperwork asked for too much or don’t know how to spend it like the government. It’s just a matter of common sense.
Who Really Benefits from the Program?
We really have to dig below the surface and think of who this program REALLY benefits. Las Vegas homes (or anywhere for that matter) that have been foreclosed on are pretty much owned by the Banks. What that sales price will be will probably fall along the lines of “Spending Money Like the Government” instead of being determined by natural market forces set by the private sector.
So, here we have a program using Federal Taxpayer Dollars to buy homes from the Banks and relieve their responsibilities of upkeep, paying property taxes, HOA dues, etc, etc… and putting the burden on the Government. (If I have to explain where the Government gets its money, then please use your computer to learn something today.)
Just ask some of the thousands of the active buyers for Las Vegas real estate out there what they think about the Government buying homes after they’ve lost out on trying to buy a Bank Owned home a couple of times. Ask private real estate investors what they think about competing with the Government for tenants. Ask potential renters that will not qualify under the program what they think about paying more for rent due to subsidized programs.
And then ask yourself if the people making the actual award decisions have enough common sense to get into the complicated world of real estate and manage taxpayer dollars effectively? (Well… actually, it’s borrowed money at this point but taxpayers will eventually get stuck with the bill.)
Could the Real Story be in the Grant List? Just to share some of the lucky Winners in the $1,930,000,000 lottery.
$11,000,000 to Alameda County. $299,000 is the cheapest house I could find in Alameda for sale. If there was no demand, I would think that prices would be lower.
$22,249,980 – (Bizarre Number) to Long Beach, California. The cheapest home I could find on this Long Beach Real Estate Search was $250,000.
$100,000,000 to Los Angeles. No Comment.
$23,000,000 to the City of Sarasota. LOTS of LAUGHING Here when you search for Sarasota Real Estate for sale.
$18,150,000 to Evanston, IL. - Do a search for homes here. Evanston is in the North Shore where you can find some of the priciest homes in Chicagoland. If you’ve lived in Chicago, it really makes for a good laugh.
I could take this a step further… but I’m not and end it here. People who can think for themselves have a good understanding of what it all really means.
The Blight of Foreclosures Issue
Which brings us back to the “Blight” issue. Instead of Pandering for Federal Taxpayer dollars in programs being run where there are plenty of questions that can be raised concerning the effective management of these dollars, perhaps City and County Officials should be thinking more like the City of Indio when they took the bull by the horns.
City of Indio Fines Banks for Blighted Foreclosures
There are Homeowner Associations across Las Vegas that have gotten pretty aggressive in policing their own neighborhoods. I know from the several short sales that I have listed that some of the better managed HOA’s that actually do something for paying into them have taken a proactive approach to the problem and fining anybody that owns a home that appears to be blighted. There is a reason why there is a big set of Community Covenants & Rules (CC&R’s) provided to new homeowners in such a type of community and it’s not so the Management Company can collect fees for making copies.
As far as actual management of Bank Owned Homes… There are some Asset Management companies and REO Listing Agents representing some certain banks that do an absolutely wonderful job of maintaining the upkeep on their properties. And… there are some that should not be managing or listing homes for anybody in the first place.
Regardless… there is nothing stopping the City of Las Vegas or Clark County from establishing a simple set of standards to prevent blight… and to fine and penalize those that don’t want to follow it. Truly abandoned homes? There is a procedure for a local government to legally take ownership to these homes. Keep in mind… I’m specifically talking about true abandonment and not homeowner neglect. Big Difference.
Some 6,500 homes are going to hit the market in the Las Vegas Valley “and we can’t afford to buy any of them because we don’t have this money,” he said, slamming the grant list down on the podium.
Is this Program really just about blighted homes or is there more to the real intention of the program? Should Federal Taxpayer Dollars be used by who knows who to purchase private real estate owned by banks? Should Las Vegas take it as a compliment that they don’t know how to spend money like the Federal Government?
There are some Clever minds creating very entertaining commercials for Las Vegas… Somewhere in all of this, I think there is an idea in here for a new one.
Paul Francis, CRS
Prudential Americana Group – Realtors®
Las Vegas Real Estate
702.592.3058
* Paul Francis is an Independent Contractor specializing in Common Sense Las Vegas Real estate. Opinions formed in this post are his opinions and may not reflect the opinion of Prudential Americana Group – Realtors® or Prudential Real Estate Affiliates, Inc.
Prudential Americana Group – Realtors® is An independently owned and operated member of The Prudential Real Estate Affiliates, Inc. Prudential is a registered trademark of The Prudential Insurance Company of America. Used under license. Equal Housing Opportunity.
Part 1 of a five-month McClatchy Newspapers investigation is certainly the must read Real Estate related article of the day/week.
