The second installment of federal Neighborhood Stabilization Program (NSP) funds will be dispersed through competitive grants, pitting the state’s larger eastern cities against smaller rural towns in western Massachusetts.
Massachusetts’ Department of Housing and Community Development (DHCD) is helping those smaller communities prepare their applications, while the state’s two largest cities, Boston and Worcester, will apply for more funds after receiving millions from the state and federal government in February.
Applications for the second round of NSP funds are due in Washington, D.C. July 17, and DHCD is applying on behalf of nine rural communities in western Massachusetts.
The federal department of Housing and Urban Development gave the first round of NSP money, a total of $4 billion, directly to cities with the greatest number of at-risk, or already foreclosed, properties. In Massachusetts, they were Boston, Brockton, Springfield and Worcester. HUD also split money among the 50 states, which was then divvied up by state agencies and given to cities hardest hit by foreclosure. DHCD gave additional money to those four cities, and grants to nine other communities.
This round of stabilization funds, a total of $2 billion, will be issued in the form of competitive grants to cities and towns deemed the neediest. DHCD is helping communities like Athol, North Adams and Pittsfield put together grant applications.
“We made the conscious decision to try to – and apply directly to – assist communities that did not get a look under the first program,” said Phil Hailer, spokesperson for DHCD. “Although the sheer numbers of foreclosures aren’t that high, it’s a high percentage of the housing stock, and that’s making it impactful in these targeted neighborhoods.”
DHCD is also helping quasi-public nonprofits like the Massachusetts Housing Investment Corp. and Massachusetts Housing Partnership put together their applications.
When Cities Compete
Because it is a competitive process, DHCD has been able to define ‘need’ a little differently. But the competition is a two-edged sword; it’s possible not a single community in Massachusetts will receive funding if other states and communities are significantly needier.
“Really, we’re going to make the case that if we do not use the money to stabilize these communities, the market will not be able to respond,” Hailer said.
There are some requirements and provisions for the funding that may make things a little more difficult for the town in western Massachusetts. For one, special nods are given to neighborhoods connected by mass transit.
“It may well make it harder for rural neighborhoods,” Hailer said. “It may be that the points come from other aspects of the neighborhoods.”
There are also mandatory green building standards – the funds can’t be used to tear down public housing – and resident recipients of funding must have less than 120 percent of the area-median-income.
More, Please
Both Boston and Worcester, along with other communities that received funding the first time around, are applying for more money. There are currently 397 and 268 bank-owned properties in Boston and Worcester, respectively, according to The Warren Group, publisher of Banker & Tradesman. But city employees say where there is just one foreclosed home, there are several more neighboring properties at risk of falling into foreclosure.
Boston is applying for “more than $20 million,” according to Lucy Warsh, spokesperson for the city’s Department of Neighborhood Development. Boston received a total of $8.23 million from NSP1.
“The funds would support similar foreclosure relief efforts than those we’re working on now,” Warsh said.
Warsh said Boston feels like they may have an excellent chance at securing more funding because they’ve been programming for foreclosure relief well before any federal funds became available.
Worcester is also applying for more money, to the tune of $10 million, according to Assistant City Manager Julie Jacobson. Worcester received $4.8 million from NSP1.
Jacobson said the original money was used on three neighborhoods that were hardest hit by foreclosure. The plan is to use NSP2 funds to expand those same efforts to other parts of the city, which also need relief.
“Basically we’re using NSP2 for similar activities, which in a nutshell are to reclaim and revitalize foreclosed and abandoned properties,” Jacobson said.
Jacobson said the city’s strategy not only includes rehabbing and reselling properties, but also weatherizing properties, and testing and improving energy efficiency so residents have fewer costs.
“If we can assist residents with making their homes more energy efficient, then that promotes stabilization, because families can stay in their homes,” Jacobson said.
