Monday, February 11, 2008

Mr Blakely, Flip that House!

Ed Blakely

Ray Ray's Recovery Regent has expanded his domain to the newly created Office of Recovery and Development Administration. He has been given broader authority over recovery and redevelopment. However little apparent action has taken place on the ground. The city seems to be rearranging chairs on the Titanic, again.

We still need government action the ordinary citizens can see, feel and participate in. The most obvious area to address is the housing shortage. The city is about to become the owner of many damaged houses from a number of different sources. They represent a very large number of savable houses.

Since the flood there has been another parallel national phenomenon on television, the House Flipper show. Every program shows ordinary people trying to make money buying rundown houses and turning them around.

What if the city were to create a giant house flipping program? The City recently had an Internet auction of properties with tax liens. It was apparently very successful.

Suppose the City used the same technology to allow local people to acquire and repair these houses, either to live in or to make them available to others to live in. In the past the city has handled blighted property it acquired abysmally. Property was often sold to well connected people who often did nothing except pass it on to someone else who often did nothing. This can't happen this time.

It seems there are several possible variations, all of which can be tried simultaneously.

Homesteading. Qualified young families could be given time to pay for the house, provided they completed repairs withing some specified time. They might be provided with temporary on site housing (FEMA has a lot of surplus trailers) while they renovate. She and I renovated our first house in New Orleans, largely with the help of one friend, a very good carpenter and a few subcontractors. It took several years and for a while we slept in a bedroom that got so cold at times water froze in the toilet.

Two Stage Repair Auctions. Some houses could be auctioned for repair contracts. Small local contractors could bid on the cost to repair a house to a defined standard with a one year warranty. Payment on completion. The repaired houses could be auctioned off to homeowners, based on their pre-qualifying for financing.

NGO Repairs. Qualified assistance programs (like Habitat) could be given preference for houses destined for disadvantaged owners.

Straight Auctions. Allowing small scale speculators and entrepreneurs to take the risk and reap the rewards (if any). These auctions of select properties, could be limited to multi-family properties, intended for the rental market or especially difficult properties.

We don't need more complicated, mandate laden programs which require either significant resources or the inside track. There will be plenty of opportunities for that kind of thing elsewhere, unfortunately.

It is time to dis-empower government and let the people of New Orleans get into the act and benefit from some of the recovery dollars being horded by government while they slowly evaporate.

5 comments:

oyster said...

"We don't need more complicated, mandate laden programs which require either significant resources or the inside track.
...
It is time to dis-empower government and let the people of New Orleans get into the act and benefit form some of the recovery dollars being horded by government while they slowly evaporate."

Yes indeed!

Great idea!

Anonymous said...

In Baltimore, back in the 70's/early 80's the city condemned a great deal of blighted, but historically significant property and offered it for sale to the general public for something like $1 plus a covenant to spend like $100k to renovate in the next 5 years. The results have been fantastic. It's so simple, fair, free-enterprise, and transparent, no way it'll ever fly here in NOLA; nonetheless, I keep hoping!

Ella said...

I like these ideas.

Is there anything being done to lower insurance rates that keep people from affording homes around here?

mominem said...

I doubt much will happen with this idea. I imagine almost all of the houses the city gets will be torn down. There will be an endless list of qualifications and inspections until eventually the houses are beyond repair.

As for insurance there is one idea which might help New Orleans. Louisiana could eliminate or re-define the "Valued Policy" statue, which requires that if the property is a total loss, and part of the damage is from a covered peril, then the Insurance company must pay the total value of the policy. This is one reason insurance companies are eliminating wind and hale coverage.

ella, I like your idea for a blog, I hope you get back to it.

New Orleans News Ladder said...

I know this is a late comment but be careful what you ask for.
I just saw this show (for the first time) tonight and they were in New Orleans and flipped a house. I found their lack of accent Creepy.