Senate Democrats push plan to rehabilitate vacant houses, buildings

By Vicki Needham - 03/06/12 04:26 PM ET

A group of Senate Democrats introduced a plan Tuesday that would expand a housing program aimed at rehabilitating residential and business properties.

Sen. Jack Reed (D-R.I.) introduced the measure that expands the Neighborhood Stabilization Plan, and would offer $15 billion in grants for fixing up residential and commercial properties left vacant following foreclosure.

It would also increase support for land banks, which work with communities to buy, hold and redevelop distressed properties as part of a long-term redevelopment strategy.

"Project Rebuild is a smart investment in strengthening our communities, putting more construction workers back to work and bolstering the economy," Reed said.

"This initiative will provide a flexible source of funding to help local communities leverage federal dollars to effectively address vacant and blighted properties in their areas," he said.

On Feb. 27, the Federal Housing Finance Agency (FHFA) announced the start of a program to sell foreclosed homes to investors in Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida aimed at stabilizing the housing sector across communities and boost home prices.

Reed also spearheaded that issue in Congress.

The latest legislation would provide $15 billion in targeted assistance with $10 billion directed to states, cities, and non-profits through a formula modeled after the Neighborhood Stabilization Program (NSP) and $5 billion distributed through new competitive grants.

"Project Rebuild will expand this effort to harness private capital to revitalize more distressed neighborhoods and struggling commercial districts," said Shaun Donovan, secretary of the Housing and Urban Development Department, in a statement.

Donovan indicated he would work with lawmakers on the proposal.

HUD estimates the measure would create more than 190,000 jobs and help renovate 150,000 properties.

Each state will receive a minimum of $20 million of the $10 billion in formula funds.

Additional 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.

"Using proven strategies, Project Rebuild will help cities and towns redevelop vacant properties and revitalize neighborhoods and business districts," said Reed, a senior member of the Senate Banking Committee.

Cosponsors of the legislation include Sens. Patrick Leahy (D-Vt.), Dick Durbin (D-Ill.), Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.), Al Franken (D-Minn.), Richard Blumenthal (D-Conn.) and Mark Begich (D-Alaska).