A struggling city program aimed at fixing and selling abandoned homes, predominantly in north St. Louis, may get a boost through newly proposed city legislation.
Through Prop NS, homes in the city land bank are nominated to be made structurally sound and put back on the market for sale to investors or prospective home renovators. But after five years, only 12 homes have been fully rehabbed through the program.
Taxpayers approved the fund in 2017, but nominations and evaluations of properties didn’t officially kick off until 2020 after legal troubles delayed its launch.
The city spends roughly $6 million a year hiring contractors to stabilize the homes, which typically entails fixing a building’s roof, foundation, exterior walls or other aspects that keep a home from deteriorating.
Voters allowed the city to spend up to $30,000 to stabilize vacant single-family homes and up to $50,000 for multifamily homes with six or fewer units.
That could change through a board bill proposed by Ward 14 Alderman Rasheen Aldridge.
If approved, Board Bill 125 would raise the limit to $50,000 for residential buildings under 1,500 square feet, $60,000 for buildings between 1,500 and 2,500 square feet, and $80,000 for buildings 2,500 square feet or larger.
Prop NS Director Sean Thomas said the cap on the amount that can be spent on each building has prevented many buildings from being repaired through the program.
"We're talking 10 years now since those caps were established,” Thomas said. “Even then, I think there's a strong case that the limits were low for what we needed for full stabilization of these buildings."
Thomas added that the COVID-19 pandemic and rising inflation in recent years made it difficult for contractors to do the work within the $50,000 budget the program is allowed to spend.
In an interview with STLPR in October, Thomas said most buildings in the land bank inventory require more work than is possible with the current building cap. Still, in the five years the program has been active, more than 190 vacant buildings have been repaired through the initiative.
Of those stabilized homes, the city sold 113 through the program to private buyers.
According to SLDC data, there are 1,102 residential lots owned by the land bank and available for purchase. The Greater Ville and the Wells Goodfellow neighborhood contain roughly 300 of those properties.
Thomas said Prop NS can play a bigger part in reversing the city’s vacant home problem by raising the cap on repair spending.
The Board of Aldermen will discuss the bill further at a Housing, Urban Development and Zoning Committee meeting yet to be scheduled.
Program saw success, struggles in five years
In its five years, Thomas said the program, while mostly successful, has had struggles — not just related to the spending cap on each property.
While 113 properties had been fixed and sold through the program, only 12 have been fully rehabbed.
Thomas said that a “limited number” of contractors are willing to bid on the work, and that it’s difficult for prospective rehabbers to get loans in north St. Louis due to historical redlining in the area.
“The harsh reality is that redlining still exists, and a lot of those financial institutions are not making loans on the north side of the city or in the neighborhoods where we're doing stabilization work,” he told the board last year.
In October, Thomas said, while the goal of Prop NS is to stabilize the homes in the land bank, the ultimate hope is that buyers who purchase the buildings will fully rehabilitate them and then sell or live in them.
“The biggest challenge is access to financing,” Thomas said. “With most people who buy houses, the bulk of their loan is for the purchase price — these houses are so challenged that they need a significant amount of funds for rehab."
What’s more, roughly 10 Prop NS properties were destroyed during the May 16 EF3 tornado that ripped through the city, two of which had been sold to private owners.
