Sunday, November 01, 2009

Federal Funds for Renovation

"New Life for Older Peoria Homes?", a column by JS reporter, Clare Howard today, says that "No final renovation costs are yet available, but if purchase and renovation of this "older home" comes to $140,000, the home could be sold for $60,000. The developer gets 10%. The buyer is getting a good deal on the home. HUD is creating affordable housing."

Somebody is getting a good deal? I'd say, more than one is getting a good deal. Was renovation bid out? Who selected the bidders doing the renovation? I don't understand this. The buyer gets the house for $80,000 less than it costs? What figure is the 10% developer fee taken from or added to? The $140,000 or $14,000 or 10% of the $60,000 or $6,000? All in the cause of "affordable" housing and keeping growth in the city??

What if the buyer borrows the, $60,000, and after a while finds out they or he can't make payments or can't afford it and maybe trashes the house on the way to eviction, does renovation start all over again? Or what happens? Who is stuck with the ownership? Of course, the legitimate property taxpayer whose taxes fund HUD.

And the "kept in the dark" taxpayer picks up the $80,000 plus the developers commission. If this is true and developers all across the county are doing this, what in the h--- is going on?? All to put another house back on the property tax list, taxes that may never be paid. And how much taxes to make up the $80,000 spread between cost of $140,000 and selling price of $60,000??

This article mentioned that "lead abatement in one closet of the $140,000 renovated home was done incorrectly". Sounds suspiciously like one of the homes where the City/County Health Department lead abatement for 241 homes averaged $12,400 per home? ($3,000,000 divided by 241 homes completed or in process of completion)? I have been asking how homes are selected for this HUD $3 million lead abatement that we are doing for "the kids". I was told it was random selection. What if people with no kids buy this $60,000 home?

Clare Howard also quoted Health and Environment Chairperson, Lynn Pearson, as saying "like anything new, this program bumbled around for awhile". "Bumbled around", I guess it did as HUD did not renew the $3 million dollar grant to the County and the City/County Health Department this year.

As a member of the H & E Committee, l continually questioned this program, especially when the county trained 120 some people for work on lead abatement, yet none of them were hired.

To supplement the HUD program, Dave Williams as H & E Chairman sponsored setting aside $750,000 in County Funds that now stand at roughly $625,000, $500,000 of which our administrator is planning to continue the lead abatement program, or another roughly 40 homes, out of 48,000 home in Peoria with some type of lead problem.

As in all government projects, some "appear" to be making money that slides beneath the radar of the ordinary citizen. A lot of information on this project has never surfaced such as the early involvement of PEECO, some questions need to be answered to the taxpayers here, and the problem of meeting Peoria County's strict policy of using only prevailing wages on the $750,000 county commitment while HUD did not require prevailing wages be used on the $3 million HUD committed in 2007.

When this house is completed, does the developer own the house until it is sold? If it sits on the market a while, who pays for the maintenance and upkeep?

So many unanswered questions here. I'll find more out next week. Look for more unanswered details on this "bumb-lead" project.

As an aside, Dave Williams is running again for County Board. Dave was very involved in fiscal sanity and much concerned about not needing to raise taxes. Also, Karrie Alms, always concerned about where this community is heading fiscally, is running for Lynn Pearson's position.


Merle Widmer said...

Notice to the affected Township Assessor. This house once sold for whatever amount, should be assessed at the $140,000 figure cost. If not, why not? It's being sold way below cost. It's not being sold at it's fair value if it cost $140,000 JUST to renovate it.

If it cost $140,000 to renovate it, it must be worth $140,000 plus the land regardless of what it sells for.

If not, why can't I sell my house to someone in my family for say, 1/3 it's value. Using this case as an example, why would my buyer have his new home assessed at it's fair value??

Anonymous said...

In keeping with our commitment educating the community and its leaders on LEAD related matters that will affect the region's children, the Westside Environmental Plan of Action Committee (WEPAC) warns:
The US Environmental Protection Agency has enacted the Renovation, Repair and Painting (RRP) Rule (scheduled to take affect April 22, 2010) that requires all contractors that disturb more than 6 square feet of painted surface, in a structure built prior to 1978, to undergo RRP training or be faced with a fine up to $32,500.00 per violation. This rule will apply to ALL (general, painting, plumbing, carpentry, electrical, HVAC and other) contractors that work on older homes. WEPAC will do its part to assist those municipalities, community-based organizations, contractors, real estate/homeowners associations, unions, and others in complying with this national requirement. WEPAC has in the past offered to lend its expertise to assist both the City and County of Peoria (including the Peoria City/County Health Department and the County's Health and Environmental Issues Committee) with its LEAD related issues, with neutral or negative results.

It is our hope that City/County leadership does not make the same mistake twice, as the children of Peoria County deserve environmentally-safe housing in which they can safely live, learn and grow.

Is your contractor an EPA RRP accredited firm? If not he/she can be causing irreparable damage to both you and your children.

D Doc McClellon
Training Manager,
Westside Environmental Plan of Action Committee (WEPAC)

Anonymous said...

Regarding your own comment on the post, Merle, I know where you are going but you are wrong. The value of a house is not equal to the amount of money you spend on it. I just spent $12K on a new roof -- does that mean my house is worth $12K more? How about when I replaced my ancient boiler a few years back for $6K -- did that add $6K to the value? I don't make improvements just for the hell of it. I'm hoping that they are investments. But I also know there isn't always a dollar-for-dollar value to some improvements. In fact, some (like a roof) are needed just to keep the value where it is.