FORECLOSURE FIX
BEANTOWN'S LESSONS FOR NYC
May 6, 2008
NEW York's foreclosure rate remains well below the national average. One in every 1,631 households here faced foreclosure in March, compared to one in 538 nationwide, reports RealtyTrac. But that good news may not last.
New York's working- and middle-class real-estate markets only started seeing weakness during the second half of last year, city tax analysts say - more than a year later than much of the country. Citywide foreclosures were up 18 percent in March compared to a year ago, as some people who run into trouble paying their bills can't refinance or sell as the market weakens.
And some New York neighborhoods are harder-hit. On Staten Island, foreclosures are up 103 percent over March 2007, driven by the poorer North Shore. Foreclosures in Queens are up 35 percent, driven by Jamaica and Hollis. And turmoil in Brooklyn neighborhoods such as East New York can't be ignored.
To start addressing the problem before it gets worse, Mayor Bloomberg can look to what Boston is doing on Hendry Street in Dorchester.
It all started with a Boston Herald series on the long-forlorn area - which, like some of New York's toughest neighborhoods, had been enjoying some gentrification before the subprime crisis. But over the last year, Hendry Street has "turned into a blighted urban ghost town as a result of foreclosures, shady real-estate deals and abandonment."
Seven three-family houses on one block were "boarded up or empty," right around the corner from six more boarded-up properties. More than 200 foreclosures have hit Dorchester in the last year, with another always-iffy neighborhood, Roxbury, not far behind.
Driving these mass foreclosures is a dynamic also at work in some New York City neighborhoods: Borrowers who bought three-family fixer-uppers with little or no downpayment, on the assumption that they could refinance or flip, got stuck with mortgages they couldn't pay once the credit party stopped.
But the Herald series pointed out a bigger problem: Boarded-up properties pose a policing challenge. (The Post has reported similar woes in Staten Island.) And a crime-plagued street is even less likely to attract buyers for vacant houses - further harming its chances of recovery.
No one can stop the market forces at work - but Boston Mayor Thomas Menino is doing what he can. Partly in response to the Herald series, he opened a "war room" in City Hall for a new "Foreclosure Intervention Team" - with representatives of the city's police, inspection, public-health, public-works, housing and public-property agencies.
