Mechanics Bank of Richmond (MCHB)

[Enterprising Investor]

New program renovating blighted Richmond properties ‘working as designed’ (8/03/16)

An innovative new program in Richmond that is rehabilitating vacant, blighted homes and reselling them at affordable prices is “working as it was designed,” according to the latest newsletter published by the nonprofit Richmond Community Foundation (RCF).

The program, which began rehabbing its first blighted property earlier this year, was launched as a way to deal with the many long-vacant, unattractive properties in Richmond that have been attracting squatters, fires and criminal activity.

As part of the strategy, which was pitched in 2014 by prominent attorney and Richmond resident John Knox, the city is issuing “social impact bonds” to attract investors who want their investment to have a positive social impact, even if it means the returns are not as large. Their investment is used by the nonprofit RCF to buy vacant homes from lenders such as banks for the purpose of rehabilitation.

The renovated homes are then sold at affordable prices to lower-income residents, with top priority given to those who graduate from SparkPoint’s First Time Homebuyer Program. SparkPoint is a nonprofit financial education center in Richmond that guides clients toward financial stability.

In its latest newsletter, RCF says the program is operating as planned. After Mechanics Bank purchased the entire series of bonds in December, two properties were swiftly acquired. One of those homes, in the 600 block of 17th Street, has already been rehabbed and sold to a first-time homebuyer, the nonprofit said. The other will be finished this month, with several SparkPoint clients prepared to purchase.

“We have acquired two additional properties, and are working with the probate process to acquire an additional 15 properties,” the RCF newsletter states. “We are also working with the County Tax Collector, Russell Watts, and his staff to move a number of properties to tax sale.”

Earlier this year, program officials said they hoped to rehab hundreds of Richmond homes, with many located in the Belding Woods, Iron Triangle, Pullman, Santa Fe and Coronado neighborhoods.

http://richmondstandard.com/2016/08/new-program-renovating-blighted-richmond-properties-working-as-designed/