Renew Carbondale

Courtesy of D. Gorton, here is the final proposal for the Renew Carbondale project that Mayor Cole will receive next week:


Existing housing in Carbondale is threatened by a number of factors including new developments that both expand housing units as well as provide an attractive alternative to the existing rental market. It is my understanding that students have filled up new units such as Saluki Pointe and they now have a waiting list. More of these apartments are on the way.

The new developments are also an issue for the local business community: most or all of the development’s business is done with vendors and suppliers from other parts of the country. Very little banking, accounting or other services are done locally. Appliances, lumber and other materials are often bought elsewhere. Other construction firms often replace local workers. The profits of the complexes move out of the local business community.

Much of the existing housing, apartments as well as rooming houses, have felt the effects - with reported occupancy rates plummeting. This is coupled with a downturn in enrollment at the university that is lessening demand. A significant amount of the existing rental housing is substandard leading to fears of widespread vacancies.

Vacant and abandoned housing will create eyesores in the community, be attractive to crime and lower nearby property values. Unfortunately, credit markets may not support private efforts to rehabilitate the abandoned or substandard properties.

While there is a widespread view among the rental agents and landlords that the threat to them is from the new housing, our data show that substandard housing poses more of a threat to the existing market. Over 43% of the single-family houses and fourplexes in Carbondale are rentals. Of that total, over 50% are held by absentee landlords. A majority of the landlords in this category hold fewer than 3 properties. Landlords are scattered in 43 states, the result of students, faculty and others buying houses and moving around the nation.

Substandard properties also compete by neglecting maintenance resulting in unfairly low price points for rentals as well as unfair tax responsibility. While our data have not found an exact property-by-property correlation between absentee ownership and substandard housing, anecdotal evidence points to this conclusion.

In spite of the condition of the housing, local businesses state that their employees cannot find appropriate shelter, for the right cost, in safe and comfortable homes.

Renew Carbondale

I propose a not for profit organization, Renew Carbondale, to buy and rehabilitate existing, substandard housing. The goal of the organization is to assure safe, comfortable homes that will be made available at attractive rates to families and other homebuyers in Carbondale. The houses will be bound by a codicil that prevents them becoming rentals.

A board made up of appointees from the Mayor and City Council as well as several members elected from the community at large guides the organization. Its board is to set the policy for the organization and adhere to a written charter in its work.

Funds for the organization might be obtained from a number of sources: the city, bonds, as well as the Federal government and HUD. There may be opportunities for private investment as well in the form of REITs. The amount of funds that are needed should be determined by the scope of the initial effort.

A formula on the back of an envelope says that the costs of rehabilitation might be close to the costs of acquisition of the original property. For instance, a $30,000 purchase would need at least $30,000 in rehab costs. Assuming the goal of rehabbing 200 houses over 5 years, the costs might be close to $4,000,000 per year. These estimates and goals are necessarily inexact and are subject to extensive revision, of course. The moneys received from the sale of rehabbed housing would be placed back into the fund.

A goal of Renew Carbondale is to support local business. To the degree that it is legally possible, all services as well as banking, supplies and labor should be drawn from the local area. Local real estate agents and brokers should market the houses.

Removing the substandard and abandoned properties from the rental market rewards the good landlords who maintain their property, places a reasonable floor under the rental market, enhances nearby property values and improves the general appearance of the town.

This era of perilous economic conditions may bring as many opportunities as it brings pitfalls. We should be prepared to take advantage of any opportunities that come our way. An institution like Renew Carbondale has the potential for helping revitalize our town.

D. Gorton
Carbondale
1/31/ 2009