Oak Ridge, AC added to state blight elimination program; loans of up to $25K per home

 

Oak Ridge and Anderson County have been added to a state blight elimination program that could allow the city to accelerate its efforts to remove blighted and abandoned homes and replace them with new affordable housing, or possibly green space. Loans of up to $25,000 per home are available.

The Blight Elimination Program allows qualified nonprofits and land banks, like the one in Oak Ridge, to apply for loans of up to $25,000 to acquire blighted, abandoned homes, demolish them, turn the property into green space, and maintain the vacant lots. The “greened” lots can then be turned into new affordable housing or converted into other uses meant to stabilize neighborhoods, with the uses approved by the Tennessee Housing Development Agency.

The $25,000 per demolition will be fronted by the THDA. The work could start with the Oak Ridge Land Bank Corporation, THDA Executive Director Ralph M. Perrey said during a Monday afternoon press conference in Oak Ridge. The press conference also included Oak Ridge City Manager Mark Watson, Oak Ridge Mayor Warren Gooch, and Katie Moore, East Tennessee THDA representative.

The Blight Elimination Program has $10 million in funding available in Tennessee on a first-come, first-served basis. Much of it is likely to be used in Memphis in Shelby County, one of six other counties previously approved for the Blight Elimination Program, Perrey said.

But Memphis isn’t the only place that needs help, he said.

“I think a fair amount of that can be put to work here,” Perrey said in Oak Ridge on Monday.

If Oak Ridge used $1 million of the $10 million available, it could use the money to target 40 homes, assuming a funding level of $25,000 per home. That’s about four times the current level of 10 homes per year, said Charlie Jernigan, chair of the Oak Ridge Land Bank Corporation.

“I think that would be a big step,” Jernigan said. “This is going to let us move faster.”

The THDA said the Oak Ridge Land Bank has already acquired 15 properties that may qualify for the Blight Elimination Program.

“It will let us do more ourselves, and on the other side, it will relieve some of the city budget that has been used to acquire some of these homes in the past,” Jernigan said.

Perrey said the Oak Ridge Land Bank, the first in Tennessee, was one of the factors that helped the THDA and U.S. Treasury add Oak Ridge and Anderson County to the Blight Elimination Program, or BEP.

The BEP is administered in Tennessee by the THDA, and it is funded by the U.S. Treasury’s Hardest Hit Fund, or HHF. THDA monitors the completion of each project and forgives loans after three years, or sooner for certain uses.

In addition to the Land Bank, another factor that helped make the case to the U.S. Treasury was the detailed maps put together by the Oak Ridge city staff. Among other information, the maps include depictions of what is known as the Manhattan District Overlay, or MDO, and home appraisal values in the MDO.

“This helped us make the case to Treasury,” Perrey said. “This is a place that ought to be on the list.”

The Manhattan District Overlay includes so-called “legacy homes,” mostly in the center of the city, and it is meant to improve development in the city’s oldest neighborhoods.

On Monday, Gooch thanked THDA for its support of the city’s housing initiatives.

“The hard work and collaboration of city staff with THDA made this announcement possible, and the city is grateful for the opportunity to move further ahead in the revitalization of our historic homes and neighborhoods,” Gooch said.

Perrey called the Blight Elimination Program, or BEP, “addition by subtraction.” The money could be used to strategically take out blighted, abandoned, or half-burned homes, and houses that are “causing problems,” Perrey said.

 

The THDA said more than 7,000 of Oak Ridge’s 14,000 homes date back to the World War II era and the city’s role in the Manhattan Project, a top-secret federal program to build the world’s first atomic weapons.

“Although the homes from that era were built for temporary use, many are still standing and occupied today, presenting the city with a unique challenge when battling blighted and dilapidated structures,” the THDA said.

Many of those properties were built in a hurry without plans for long-term use, Perrey said.

“These funds will facilitate a great change in these neighborhoods,” he said.

Perrey said the strategic targeting of homes means that one or two houses that are pulling down property values in a neighborhood could be targeted. Watson said one blighted home can drag down the value of 10 nearby homes.

Besides Anderson and Shelby counties, other counties previously approved for the HHF Blight Elimination Program are Davidson, Hamilton, Knox, Montgomery, and Rutherford. Anderson County was the seventh county to be added.

THDA recently kicked off the Blight Elimination Program in Shelby County, where United Housing Inc. is using the funding to help stabilize the Washington Heights neighborhood.

THDA and HHF BEP participants have until to December 31, 2020, to disburse all program funds.

The Oak Ridge Land Bank Corporation was established in 2013. Its mission is to develop programs and partnerships that promote owner-occupied housing, new home ownership, and encourage private investment. Jernigan led the effort to set it up. He said the Land Bank is now finishing its first three years of operations and has about 20 properties total, with two closings possible this week, and maybe 10 more in August. Some properties have been transferred from the city, Jernigan said, and some have been donated. Four lots have been sold, and three are new or improved.

Separately, the city continues to receive $200,000 per year in federal Community Development Block grant funds, which can be used for administrative expenses and property acquisition and demolition, said Kathryn Baldwin, Oak Ridge Community Development director. As an example, she cited a lot purchased at the corner of Northwestern and North Purdue avenues, where the home was demolished and the parcel transferred to the Land Bank. The property was then sold, and a new home has since been built there.

Monday’s blight elimination announcement comes about one month after THDA and Perrey announced a $500,000 state housing grant that Oak Ridge will use to renovate more than 60 homes. That HOME Program grant is from the THDA. It’s funded by the U.S. Department of Housing and Urban Development and administered in part by the THDA in Tennessee.

The city plans to use the HOME grant money to renovate 63 owner-occupied, single-family homes in the Manhattan District Overlay.

Oak Ridge has had a recent string of announced projects and funding that are expected to improve housing, retail, and public infrastructure, including the $500,000 state housing grant announced in June, a $2.9 million grant from the Tennessee Valley Authority for an Extreme Energy Makeover project for an unprecedented revitalization of legacy homes in Oak Ridge, the purchase and planned redevelopment of the former Oak Ridge Mall into Main Street Oak Ridge, and a state transportation grant of more than $900,000 that will be used to complete sidewalks along the south side of Oak Ridge Turnpike between Illinois Avenue and Fairbanks Road. That transportation grant follows an earlier $432,000 state grant for intersection improvements on Oak Ridge Turnpike at Tulane Avenue and Division Road.

Here are two maps prepared by the city staff and displayed Monday that Perrey said helped make the case to the U.S. Treasury for the Blight Elimination Program.

See the Manhattan District Overlay boundary map here, with the image courtesy City of Oak Ridge: MDO_Boundary_011216.

See the Manhattan District Overlay Appraisal Values map here, with the image courtesy City of Oak Ridge: AppraisalValues_2015.

More information will be added as it becomes available.

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