By Jennie Miller
C & G Staff Writer

SOUTHFIELD — The City Council is expected to approve the Neighborhood Stabilization Program on Monday, Nov. 24, a plan devised in response to the $3.25 million Department of Housing and Urban Development grant from July.

City leaders reviewed a presentation of the plan Nov. 17 delivered by Frederick Zorn, Southfield’s new deput city administrator, who was hired in August and hit the ground running on this issue.

Southfield was one of many municipalities and counties in the country to get part of $3.92 billion in funds granted through the Housing and Economic Recovery Act of 2008, which was signed by President George W. Bush on July 30.

A local plan must be submitted to the local HUD field office by Dec. 1, after which the city has 18 months to commit the funds.

Counties and municipalities were selected for the program based on need with regard to the nationwide mortgage and home foreclosure crisis. The three criteria included the percentage of homes that have been foreclosed, the percentage of homes financed by sub-prime mortgages and the percentage of homes that are in default or delinquency.

Southfield currently has 490 confirmed foreclosed homes, 414 vacant homes, and 607 homes with returned water bills, which may or may not be foreclosed and/or vacant.

In 2000, just 11 homes in Southfield were in foreclosure. That number is projected to reach 960 by the end of the year, which amounts to one in 25 homes, Zorn said.

In comparison, Oakland County as a whole has one in 47 homes in foreclosure.

“We are in a crisis,” Zorn said. “I’d like the council to recognize the unique opportunity that this is.”

Grant recipients were issued specific criteria from HUD for use of the funds.

“We cannot use these funds to help people who are in trouble now,” Zorn said. “If (a home) isn’t abandoned, we can’t touch it.”

According to the plan, $810,400 will be allocated for the purchase, acquisition, rehabilitation and construction of rental units that will be leased to families who are at or below 50 percent of the area’s median income, according to information released by the city. This aspect of the program is per the regulations of the HUD plan. Any income resulting from the rental and possible sale of these properties will be used to acquire and rehabilitate additional units.

In addition, $1.6 million will be allocated for the acquisition, rehabilitation and sale of foreclosed properties in the city. It is estimated that approximately 20 housing units can be rehabbed and sold within the initial round of funding, according to information released by the city. Again, any income resulting from the sale of the properties will be used to acquire and rehabilitate additional properties.

An estimated $150,000 will be allocated for the demolition of vacant residential structures throughout the city that meet the definition of blight and require more investment to save than the property would be worth.

Another $356,911 will be allocated for the purpose of providing assistance for down payments and/or closing costs, which may come in the form of a grant, deferred loan or reduced interest rate. It is anticipated that at least 20 families will be assisted, according to the city’s plan.

Lastly, program administration will require the use of $324,145.

“This is going to be very tricky,” said Southfield City Councilman Bill Lattimore as he listened to the presentation.

Maybe so, Zorn said, but the program is an excellent chance for the city to reevaluate is processes.

“(This is) an opportunity for us to examine how we’ve done things in the past and how we can turn our focus to being more neighborhood- and housing-oriented,” Zorn said. “It’s really time for us to take a serious look at this. Southfield can be a model city — how do we breathe new life into neighborhoods that are 50 years old?”

With the next census set to take place in 2010, the city is under a lot of pressure, Zorn continued.

“I cannot stress how important being successful is to Southfield,” Zorn said. “If we don’t get these houses occupied, it could really impact our revenue-sharing from Lansing, it could impact our Community Development Block Grant dollars, it could impact our road funds, and it could ultimately have an erosion on our tax base. And if we can do any one thing for our schools, it’s to get these houses occupied.”

Council members had a multitude of questions for Zorn regarding program details.

“We will establish something that is uniquely Southfield that meets the needs of the community,” Zorn assured the city leaders.

City Manager Jim Scharret added that as the plan takes shape, amendments can be made as levels of success are taken into consideration.

“This is new territory, and it will require continuous feedback, but there is some flexibility in the program,” Scharret said.

Southfield Mayor Brenda Lawrence described the grant as “a wonderful opportunity.”

“I think we need to be open-minded and embrace and use this tool to get people in our homes,” Lawrence said. “We are at a crisis here and we really need to think outside the box and use the tools we have available to us.”

For more information about the Neighborhood Stabilization Plan, visit www.hud.gov/nsp.