This is crazy. The $4.3 million Buffalo spent in federal funds to rehabilitate 10 homes could have funded many more brand-new builds. A lot more people could have been helped.
Consider: The city paid nearly $400,000 to renovate a run-down, one-family house that is being sold for $85,000. That is typical. Across 10 properties, the average renovation cost was nearly $430,000, while the average sale price was less than $100,000. Would you invest in that project?
The program stretched from the East Side to South Buffalo to Black Rock and, with it, the city took a bath – a cold one. Part of the reason for the tremendous losses is that the city bowed to community calls not just to demolish crumbling homes, but to rehabilitate them. That added costs, especially in properties with historic designations.
News staff reporter Susan Schulman found Buffalo spends, on average, at least twice what Rochester and Syracuse report spending per house under the same federal program. These other cities also rehab many more houses: 25 a year in Rochester and 10 to 15 annually in Syracuse, compared with 10 over three years in Buffalo.
The amount of money being spent on these houses, as Buffalo Comptroller Mark J.F. Schroeder said, “… is beyond excessive.” And as his top aide added, it is logical to assume that thrift in terms of these funds could lead to helping more people. The U.S. Department of Housing and Urban Development, which issued the funds, also has questions about the costs versus return.
Mayor Byron W. Brown’s administration is working on an alternative plan, borrowing ideas from Syracuse and Rochester. But not every piece fits. The houses rehabbed in Syracuse and Rochester are not as large or old as Buffalo’s. Those cities shy away from historic houses.
The Buffalo Urban Renewal Agency, which receives $2.4 million in federal anti-poverty housing money annually, uses the money in several programs. It steers some dollars to create multiunit apartment buildings and other funds to assist existing homeowners. Other money is used to build new homes or acquire vacant properties, then rehab them for resale to low- to moderate-income first-time homebuyers.
The Brown administration has gone from focusing on new builds to preservation. The former tends to be less costly than the latter, but satisfies the constituency demanding less demo, more “reno.”
The city now has a suite of tools that will rehab houses, in many cases, at far lower cost while bringing in partners. In his State of the City speech, Brown talked about working on a program that would include other organizations, including Empire State Development Corp., the New York State Affordable Housing Corp., the State of New York Mortgage Agency, M&T Bank and Habitat for Humanity.
The City of Buffalo is using a variety of tools and approaches. They include the region’s land bank – the Buffalo Erie Niagara Land Improvement Corp. – to use its powers to acquire foreclosed properties on behalf of the city. Such efforts should provide affordable housing while offering new homeowners, landlords and tenants staff support that adds to the support available through community groups, some of which acted as developers on rehabilitation projects.
That’s all reassuring, but why couldn’t those approaches have been implemented before? Why wait until after the city has made poor use of $4.3 million?
One way or another, no one should be satisfied with a program that spends hundreds of thousands of dollars to renovate a home that is worth only 20 percent of the cost. For $4.3 million, the city could have built 40 homes and helped many more people. That, in the end, needs to be the measuring stick. Next time, don’t be crazy.