There are about 5,000 homes going through foreclosure procedures in Pinellas County, including many in the City of St. Petersburg that are dilapidated, attract crime and drag down adjacent home values, city leaders say.
Some of those homes are being snapped up by investors, given a quick paint job and then rented out, creating more low-quality housing.
Now, the city plans to offer incentives to property owners who fully renovate their properties, a move city leaders hope will help revitalize some of the poorest neighborhoods in St. Petersburg.
Thursday, the City Council tentatively agreed to allocate $400,000 for a new program that would offer 20-percent rebates to property owners who spend at least $25,000 in repairs. The incentive could lead to roughly $2 million of private investment in properties that would create jobs for plumbers, electricians and laborers, they said.
The incentive would only be available to property owners in an area bordered by Ninth Avenue South, Fourth Street South, 49th Street South and 26th Avenue South, an area that has a high number of foreclosed homes, many of which were bought with subprime mortgages. The rate of foreclosure was high enough for the city to qualify for a $3.8 million federal grant, which it is also using to buy and renovate homes.
The rebates would likely only be available for one year or until they run out, because the city is not planning to extend funding for the program. There should be enough for about 80 homes, said Council Chairman Karl Nurse, who proposed creating the program. Only property owners who apply for permits would be eligible for the money.
Nurse, who buys and rehabs houses in St. Petersburg, said fixing up the homes would raise their value, meaning the city would eventually recoup its outlay through higher property taxes. He estimated it would take about four years for the program to pay for itself.
"The permits trigger a reappraisal," he said. "You will, over time, get tax money back."
Nurse said he would not apply for the rebate for properties he renovates.
Fixing up homes would not necessarily guarantee that people would want to buy in blighted neighborhoods, Council Member Jeff Danner said. The city would also need to address problems such as crime and public safety to make the program work, he said.
"Kenwood struggles with this; Grand Central struggles with this," he said. "People aren't comfortable coming in to these areas. You're going to rehab homes, but you have to fill them."