Eyesore being torn down as part of Neighborhood Revitalization program

May 4, 2015

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Wayne Wagner, housing development director with Affordable Housing Solutions, talks about the dilapidated home at 1420 E. Third St. in the Whittier neighborhood. (Photo: Jay Pickthorn / Argus Leader)

 

Eyesore being torn down by city, nonprofit

 Joe Sneve, jsneve@argusleader.com

"The guy absolutely created a mess and then he walked away and it sat there for 10 or 11 months," Bosch said, recalling how he came to own what city officials consider one of Sioux Falls' most blighted residential properties.

Not long after work started last May, the contractor split, leaving Bosch with a partially exposed basement and a mess of scraps scattered throughout the backyard. Feeling overwhelmed, realizing the project had gone sideways, and without enough capital to see the project through, work stalled and Bosch thought he was out of options.

That's when help arrived.

With the aid of local nonprofit Affordable Housing Solutions (AHS) and the city of Sioux Falls, Bosch's property was selected for the Neighborhood Revitalization Program and is now in the process of being sold to AHS, which will demolish the home when the deal is finalized.

"A lot of times we think the city is Big Brother. They're there to hurt us, not help us. But I was pleasantly amazed at all the consideration they gave me," said a relieved and appreciative Bosch.

The East Third Street home is one of about six problem properties the city and AHS together address each year. Using both local and federal dollars – the city appropriates about $120,000 from the general fund for the program each year – AHS buys dilapidated homes, knocks them down, and rebuilds affordable single-family homes or multi-family housing units.

Since the Neighborhood Revitalization Program, administered by the Sioux Falls Community Development Department, launched in 2003, 55 single-family homes have gone up where frequent code violators once stood. Another 28 residential units in four apartment complexes also were built over the last decade thanks to the city-sponsored program.

The city dollars used to facilitate the land purchases are granted to the AHS, while the construction costs are loaned to the organization at no interest.

"We act almost like a bank in a sense," said Les Kinstad, affordable housing manager for the city of Sioux Falls. "We have a revolving fund that finances the construction. When the property sells, the money is put back in."


Wayne Wagner, housing development director with Affordable Housing Solutions, is reflected through broken glass at the dilapidated home along Third Street in the Whittier neighborhood. (Photo: Jay Pickthorn / Argus Leader)

The money granted for the acquisitions, though not required to be paid back, is recouped indirectly through cost savings in services that blighted properties often burden the city with.

"The subsidy that the city is providing in the project in order to clean that site up and provide affordable housing to another household, it gets its investment back through the increased tax bases on the property, through the elimination of calls to the police department, to the fire department, and to the code enforcement department," said Paul Hess, Sioux Falls Neighborhood Revitalization Specialist.

"We figure at about 12 or 13 years, the amount of investment that the city puts in it is paid back through the increased tax bases," he added.

Those increased property values aren't specific to the newly constructed homes, either, said Wayne Wagner, housing development director with AHS. Rather, when new homes go up in some of the older neighborhoods in Sioux Falls, other property owners are motivated to start making improvements of their own.

"The nice thing about it is you take virtually the worst place in the neighborhood out and you put the best thing in so the neighborhood gets an uplift," Wagner said. "We clean our house up, they clean their house up."