More foreclosed and vacant homes ahead. How can local governments respond?

<p></p> <p>2009 was a record year for foreclosures in North Carolina. Now it looks like 2010 is going to be worse. In the first five months of this year, North Carolina experienced 35% more foreclosure starts as compared to the same period in 2009. (2012 update: a GAO report on vacant homes and foreclosures can be found here).</p> <p>The challenge is to rehabilitate foreclosed properties and return them to full occupancy before they fall into disrepair and cause further neighborhood decline. How are local governments responding to this challenge?</p> <p>The hardest hit areas obtained federal funding through the Neighborhood Stabilization Program (NSP) for the purchase and rehabilitation of foreclosed homes. Funding through that program is no longer available, and no additional funding has been proposed (more information on the program in North Carolina can be found on the NC Department of Commerce website here). For local governments who did not receive NSP funding, are other options available?</p> <p>Three programs illustrate potential local government responses to homes left vacant and in disrepair as a result of the foreclosure crisis. Each program intervenes at a different point in time following a foreclosure-related vacancy. This post will work backwards, starting with programs that intervene later in time (e.g., after a home has become so dilapidated that the local government demolished it) and work toward programs that intervene at earlier stages (e.g., before a home falls into disrepair). A comprehensive program would incorporate the full spectrum of approaches described below.</p> <p>After demolition: forgive demolition liens when owners construct affordable housing </p> <p>Durham encourages owners to build new [...]</p>