Richmond Seeks Socially Conscious Investors In Plan To Flip Neglected Homes
RICHMOND (KPIX 5) -- Richmond hopes a one-of-a-kind plan will fix struggling neighborhoods. The program teams up with nonprofits, contractors and socially-conscious investors to buy and flip neglected homes.
There are about 1,000 so-called "zombie homes" in the city of Richmond. Usually, the homes are a mess and no one wants them, not the owner or the bank.
"There are code violations. They're usually boarded up, they're abandoned. The yards are in disarray but you'll also find places for dumping as well," said Erwin Reeves of the Richmond Community Foundation.
The city hopes a first-of its kind program will turn this block and many others around. It's teaming up with a couple nonprofits, local contractors and private investors to buy up the properties and flip them.
"This gives us an opportunity to get money from social impact bonds, to invest in a community to restore these houses and make them market ready," said Richmond finance director James Goins.
Social impact bonds target socially conscious investors. Instead of expecting a 5 percent return, an investor might get half that.
"The rate of return they get is so low, I mean it's really a gift back to the cities," Goins said.
And they do it he said, because they believe it's for the greater good.
If it all goes according to plan, that good will be spread around. Local workers would be hired, creating jobs, and local first time homebuyers will be first in line for home ownership. The city would collect more property taxes, blight and crime would likely come down.
The Richmond Community Foundation will lead the project and believes the impact will be profound.
"Improving four or five homes in a four or five block radius will actually bring up the entire neighborhood," Reeves said.
Rehabbing the homes, may be the easier part. More difficult will be identifying who owns these houses and getting the paperwork signed. But by spring, they hope to have the first homes on the market.