High number of foreclosures has WVC seeking federal funds

Posted: 7:48 PM- West Valley City is one of several local entities seeking a chunk of $19.6 million in federal funding to help with foreclosed homes in Utah.
City officials and housing advocates pleaded Wednesday for a share of the Neighborhood Stabilization Program Fund during an hour-long public hearing on how money would be allocated.
West Valley City officials made a passionate plea, saying the city could lose more than $15 million in property-tax revenue because of its high number of foreclosures.
The Housing and Economic Recovery Act of 2008, which Congress approved in July, contains $3.92 billion in relief, including the Neighborhood Stabilization Program.
There have been roughly 800 foreclosed homes so far this year in West Valley City - Utah's second largest city - comprising half of foreclosed homes valued at less than $200,000, said Claire Gilmore, assistant West Valley City attorney.
The state's Division of Housing and Community Development will allocate the federal cash money but the division won't seek formal funding-request applications, said Gordon Walker, the division director.
State officials are assessing the need for money statewide and will submit a plan for public comment by Nov. 15. A Dec. 1 deadline is in place to submit plans to the U.S. Department of Housing and Urban Development (HUD).
West Valley City also has the highest percentage of low-to-moderate income families, Gilmore said.
"We can take these funds and do great things with them immediately," Gilmore said Thursday. "We can start rehabbing those properties tomorrow."
For example, Gilmore said West Valley used federal money in 2002 to revitalize Harvey Street, where aging homes were demolished and a new neighborhood was built for low-to-moderate income families.
City officials plan to use the funding for similar projects, Gilmore said.
Federal money can be used to refinance troubled mortgages; buying and rehabilitating homes; buy homes to be used for low-income housing; and redevelop demolished or vacant properties, Walker said. Funding will not be spent on high-end properties, he said.
If HUD approves Utah's plan, the first funding allocations could be filled by mid-January, Walker said Thursday. All the money must be allocated and spent by summer 2010, he said.
"It's in everyone's best interest on moving this money forward," Walker said.
In September, owners of 1,746 Utah properties received some type of foreclosure-related filing - up almost 114 percent from September 2007, according to RealtyTrac, a company that tracks the foreclosure market nationwide. The company reported one in every 516 Utah households received such a filing last month.
Even though West Valley City expects to lose revenue from foreclosures, Gilmore said the city has ideas and programs to cope.
Still, without federal funding, the city wouldn't "be able to do it as effectively," she said.
"At the end of the day, we're going to lose some neighborhoods without the money," she said। "There won't be anything we can do about that." -JULIA LYON contributed to this story.

By Jennifer Sanchez
The Salt Lake Tribune