Aurora city government buying homes to rehab and sell. (Denver: low income, foreclosures)

[SheridanL]

Just watched a piece on Fox about the city of Aurora buying foreclosures and fixing them up. They can't sell them for more than the purchase price plus the price of the repairs.
The money then goes back into the pot, so to speak, then they can fix up neighborhoods and such.
I wonder if other states/cities, will follow suit and use federal monies to make a difference? Good idea?

[Luke9686]

Just at first glance, this honestly seems like a terrible idea. There are many reasons for my logic, so correct me if I'm wrong.

First, the Government will overpay for these homes, so they won't be able to sell them. The reason they are just sitting on the market is because they are over priced. Houses are selling, but only if priced right. If the Government comes in and buys houses at list price, then spends money to fix them up, they will have a bunch of nice over priced houses.

They could end up like California, razing entire neighborhoods. I just think it's a bad idea for the Government to dabble in industry like this. It's very typical of politicians though, thinking they can do anything. Usually they fail...

[2bindenver]

try reading the original report. Aurora fixing up 21 houses - The Denver Post

[Noahma]

Originally Posted by SheridanL

Just watched a piece on Fox about the city of Aurora buying foreclosures and fixing them up. They can't sell them for more than the purchase price plus the price of the repairs.
The money then goes back into the pot, so to speak, then they can fix up neighborhoods and such.
I wonder if other states/cities, will follow suit and use federal monies to make a difference? Good idea?

Northglenn tried this for a while, it did not work out as planned.

[SheridanL]

I understand what you are saying Luke and Noahma.
2 beindenver..nice article!! Thanks for posting!!
I don't think that a family of 4 with 80,000 + income, is unreasonable ( lets just say a couple with 2 children). 40 plus thousand income per adult.
Maybe someone who has that income level might choose a different neighborhood. Just a thought, maybe not if a family wants to live below their means....which is good by the way!! I'm not saying this right!Sheesh!
I just deleted some of my post....too political. Just my opinion any ole hoot!

[Noahma]

Originally Posted by SheridanL

I understand what you are saying Luke and Noahma.
2 beindenver..nice article!! Thanks for posting!!
I don't think that a family of 4 with 80,000 + income, is unreasonable ( lets just say a couple with 2 children). 40 plus thousand income per adult.
Maybe someone who has that income level might choose a different neighborhood. Just a thought, maybe not if a family wants to live below their means....which is good by the way!! I'm not saying this right!Sheesh!
I just deleted some of my post....too political. Just my opinion any ole hoot!

I actually think it is a good idea if the cities are purchasing these at a "normal" price, but these things usually get more expensive when it turns to government. Northglenn tried it with three homes. They did extensive upgrades and additions to both. It took FOREVER for them to sell the homes once finished, even after extensive advertising. One of the two styles actually looks quite good, with the exception of the over sized tapered columns covered with some sort of plastic board lol. The other is just hideous. My bet is that they went for the lowest bid with a designer and let them have at it.

[SheridanL]

Dang. I almost thought it was a " good" idea!!!
Government owning everything is, well,....gonna be the norm..IMHO!

[Noahma]

Originally Posted by SheridanL

Dang. I almost thought it was a " good" idea!!!
Government owning everything is, well,....gonna be the norm..IMHO!

A few homes here and there would not be a problem. If they started taking ownership of private property, then I would have a HUGE problem. If you see any of my other posts elsewhere, I am not a big fan of huge government.

[Luke9686]

Originally Posted by Noahma

A few homes here and there would not be a problem. If they started taking ownership of private property, then I would have a HUGE problem. If you see any of my other posts elsewhere, I am not a big fan of huge government.

That is exactly what they did. The Government has taken over private property. These homes were owned by a bank, which is (or was) private.

It actually doesn't sound like too bad an idea, if done correctly. The problem is the gov't rarely does anything correctly. If bought right, and not overly rehabbed (beyond what the market can bare), this could clean these areas up.

I think it's good that they let the private sector have most of the control.

[terrence81]

I think it's a good idea. At the same time I can see how this could be troublesome. Some people are very anti-government which is understandable but at the same time the world is not ending and at the end of the day Aurora is trying to do a good thing. At the same time it has the potential to backfire simply because if the government is indeed buying the houses at a fair or market price and then makes repairs then as mentioned there's the potential for the house to not sell or if it does sell at a great loss to Aurora. At the same time nobody wants to live on an empty full of foreclosed homes.

I don't know how bad the recession is out there. Here in Virginia thanks to the government just across the river in DC there's still plenty of jobs despite a gloomy economic forecast.

Actually Aurora isn't the only city doing this. I heard a thing on npr a few months ago about Lancaster, CA outside LA doing the same thing. I think it was working because the city accepted some loss and didn't do like a business deal. There were a lot of medium or slightly low income people who were able to get houses who otherwise would have been priced out of the market despite Lancaster being cheaper to live than LA.

I'm curious about the price of the houses and how different they are from other houses on the market. Especially since the price is non-negotiable. If someone is selling a similar house for the same price but is willing to slide in price what's the incentive to buy from the city of Aurora? Also with the maximum income there's only so much house a family making $86K can afford. At the end of the day can't form a complete opinion without the price of the house. I'd say if it's more than $300K then it's too much even $250K will be stretch.