Abandoned to Affordable
With vacant homes plaguing communities across the state and rents continuing to rise, IHDA recognized an innovative solution. By leveraging federal tax credits and low-interest loans, IHDA helped one developer buy and renovate 26 central Illinois homes that had been foreclosed upon and were sitting vacant. The result: IHDA is removing blight, strengthening neighborhoods, and boosting affordable housing options for working families. And that’s only the beginning.
While 2015 was a much better year for the Illinois housing market, there’s still work to be done in many communities throughout the state. Foreclosed homes often contribute to an escalating pattern of blight, becoming eyesores, magnets for crime, and a burden on local government.
When a house is foreclosed upon, neighboring homes see their values decline by up to $10,000 each, which has a detrimental effect on the entire community. Additionally, a recent study in Chicago estimated direct costs on local government agencies of as much as $34,200 to secure, maintain and eventually demolish a single vacant or abandoned property.
“The reinvestment will provide quality affordable homes to families and will support property values for other homeowners on the blocks. The leverage is tremendous,” said David
Recognizing these challenges, IHDA saw an opportunity to transform foreclosed single-family homes into affordable rental housing. To attract developers, IHDA amended its Qualified Allocation Plan (QAP) to allow for the first time use of the Low-Income Housing Tax Credit (LIHTC) program for the acquisition and rehabilitation of scattered-site foreclosed single-family properties.
The strategy is already paying off. In 2015 Brinshore Development’s BN Affordable Rentals became IHDA’s first tax credit developments for this purpose and they have started work in Aurora as well. This work has brought a positive financial impact to the neighborhoods, generating about 80 construction jobs, an additional 10 permanent positions, and more investment expected.
“With IHDA financing we will be able to purchase many homes that are way past their useful life,” said David Brint, CEO of Brinshore Development, LLC. “The reinvestment will provide quality affordable homes to families and will support property values for other homeowners on the blocks. The leverage is tremendous.”
The Bloomington-Normal properties are located on scattered sites where foreclosures have been prevalent and residents will benefit from reduced utility costs due to the energy efficient upgrades incorporated into the renovations.