Manteca may roll out a lease-buy program for foreclosed homeowners in a bid to get them back into a home of their own.
City Manager Steve Pinkerton said that was a possible housing assistance program the Manteca Redevelopment Agency could roll out in a bid to battle the negative impact of foreclosed homes on RDA areas in the city including nine neighborhoods given the green light for inclusion in a new RDA project area.
The council doubling as the RDA commission with Steve DeBrum and Debby Moorhead stepping away due to conflicts of interest voted 3-0 Tuesday to form a third project area. A second reading of the ordinances takes place May 2. If passed again at that time, the ordinances creating the RDA project area goes into effect 90 days later.
Among the key points in the creation of the new RDA project area are:
•It is an economic development tool to help provide affordable housing, allow fixed income seniors to stay in their homes by helping with critical repairs, entice retail investment, and provide infrastructure necessary to bring business parks and other employers to Manteca.
•The agency is barred from using eminent domain.
•Inclusion in the RDA project area will not change how property is taxed or increase property taxes per se.
•Manteca will keep 70 cents of every $1 paid in new property taxes from new constriction or if property sells at a higher price than it is currently assessed compared to 11 cents without the RDA.
•Manteca Unified will not lose any money but will actually gain more local tax dollars. Currently, Manteca Unified receives $600,000 a year from the RDA for facilities. That money has helped the district build three community gyms in the past several years at Godden West, Stella Brockman, and Shasta elementary schools.
•The boundaries were determined based on economic snapshot taken almost a year ago which is why some neighborhoods that today have a lot of foreclosures weren’t included because that wasn’t the case at the time the study was done.
•There are nearly 4,000 parcels in the new RDA project with a combined value of $438 million. The RDA is expected to generate ultimately $116 million over the next 30 years to be used on affordable housing program, fighting blight, and economic development.
The lease-buy program is aimed at helping those who have lost homes in foreclosure and have their credit shot but ironically have adequate income to afford payments for homes at today’s prices after Manteca housing values dropped by more than 60 percent.
The plan could work by having a “buyer” lease the home for five years while repairing their credit, saving some additional money for the down payment, as well as using a part of the lease payment toward qualifying for a private sector loan.
Such a program would help the RDA achieve a goal of promoting home ownership to stabilize neighborhoods. The city has concerns that a growing number of foreclosures are being bought and turned into rentals.
“The more homeowners in a neighborhood the more stabilized the neighborhood is,” Pinkerton noted.
A year ago Councilman John Harris was anything but a sure vote on creating another RDA project area. Although he has repeatedly lauded efforts of the existing RDA in enhancing the economy he thought city staff was “overreaching” by including newer neighborhoods that simply had a lot of foreclosures.
On Tuesday, he said after being shown the criteria and the research he could support the creation of the new RDA project area. He added that there was a risk - although small - that it wouldn’t work.
Pinkerton noted that the worst case scenarios would have property values remaining flat for the next 10 years or so which essentially would not generate any money for RDA projects.
Manteca is one of the first cities to add to RDA project areas as a result of economic and blight issues brought on by the foreclosure mess.
Councilman Hernandez lauded the RDA as an effective economic tool to help Manteca enhance its general fund revenues by generating more retail and employment opportunities that in turn increase sales and property taxes to the general fund. He noted Manteca - as a Central Valley community - lags behind the revenue generating capabilities of similar-sized and smaller cities closer to the coastal regions of the state. Manteca, for example, has 68,000 residents with a general fund of $26 million derived from economic activity that supports everything from police and fire to parks. Hollywood, with 33,000 residents, has a general fund of $170 million and Pleasanton, with 65,000 residents, has a general fund of $70 million.
Hernandez said the RDA allows Manteca to compete for things such as Bass Pro Shops that bring in a lot of non-local sales tax dollars. He also pointed out it allows Manteca once they have researched a development opportunity to move quickly.
He noted that because Manteca was able to move quickly thanks to the RDA Bass Pro Shops, JC Penney, Best Buy, a 16-screen theater and other stores are in place. A project that started six months later - a shopping center on the southern edge of Elk Grove off Highway 99 - ended up being stopped after it got started due to The Great Recession. It is still an unfinished shell today.
City Manager Steve Pinkerton said that was a possible housing assistance program the Manteca Redevelopment Agency could roll out in a bid to battle the negative impact of foreclosed homes on RDA areas in the city including nine neighborhoods given the green light for inclusion in a new RDA project area.
The council doubling as the RDA commission with Steve DeBrum and Debby Moorhead stepping away due to conflicts of interest voted 3-0 Tuesday to form a third project area. A second reading of the ordinances takes place May 2. If passed again at that time, the ordinances creating the RDA project area goes into effect 90 days later.
Among the key points in the creation of the new RDA project area are:
•It is an economic development tool to help provide affordable housing, allow fixed income seniors to stay in their homes by helping with critical repairs, entice retail investment, and provide infrastructure necessary to bring business parks and other employers to Manteca.
•The agency is barred from using eminent domain.
•Inclusion in the RDA project area will not change how property is taxed or increase property taxes per se.
•Manteca will keep 70 cents of every $1 paid in new property taxes from new constriction or if property sells at a higher price than it is currently assessed compared to 11 cents without the RDA.
•Manteca Unified will not lose any money but will actually gain more local tax dollars. Currently, Manteca Unified receives $600,000 a year from the RDA for facilities. That money has helped the district build three community gyms in the past several years at Godden West, Stella Brockman, and Shasta elementary schools.
•The boundaries were determined based on economic snapshot taken almost a year ago which is why some neighborhoods that today have a lot of foreclosures weren’t included because that wasn’t the case at the time the study was done.
•There are nearly 4,000 parcels in the new RDA project with a combined value of $438 million. The RDA is expected to generate ultimately $116 million over the next 30 years to be used on affordable housing program, fighting blight, and economic development.
Lease-buy program for those trying to comeback from foreclosure
Pinkerton referenced the lease-buy program in answer to questions about specifically how the RDA would address the issue of foreclosed homes. He noted the city currently uses RDA funds to help make non-profit services available to Manteca homeowners who are trying to deal with mortgage holders to stay in their homes. RDA money is also being used to help first-time home buyers purchase foreclosed homes as well as rehab them when needed.The lease-buy program is aimed at helping those who have lost homes in foreclosure and have their credit shot but ironically have adequate income to afford payments for homes at today’s prices after Manteca housing values dropped by more than 60 percent.
The plan could work by having a “buyer” lease the home for five years while repairing their credit, saving some additional money for the down payment, as well as using a part of the lease payment toward qualifying for a private sector loan.
Such a program would help the RDA achieve a goal of promoting home ownership to stabilize neighborhoods. The city has concerns that a growing number of foreclosures are being bought and turned into rentals.
“The more homeowners in a neighborhood the more stabilized the neighborhood is,” Pinkerton noted.
A year ago Councilman John Harris was anything but a sure vote on creating another RDA project area. Although he has repeatedly lauded efforts of the existing RDA in enhancing the economy he thought city staff was “overreaching” by including newer neighborhoods that simply had a lot of foreclosures.
On Tuesday, he said after being shown the criteria and the research he could support the creation of the new RDA project area. He added that there was a risk - although small - that it wouldn’t work.
Pinkerton noted that the worst case scenarios would have property values remaining flat for the next 10 years or so which essentially would not generate any money for RDA projects.
Manteca is one of the first cities to add to RDA project areas as a result of economic and blight issues brought on by the foreclosure mess.
Councilman Hernandez lauded the RDA as an effective economic tool to help Manteca enhance its general fund revenues by generating more retail and employment opportunities that in turn increase sales and property taxes to the general fund. He noted Manteca - as a Central Valley community - lags behind the revenue generating capabilities of similar-sized and smaller cities closer to the coastal regions of the state. Manteca, for example, has 68,000 residents with a general fund of $26 million derived from economic activity that supports everything from police and fire to parks. Hollywood, with 33,000 residents, has a general fund of $170 million and Pleasanton, with 65,000 residents, has a general fund of $70 million.
Hernandez said the RDA allows Manteca to compete for things such as Bass Pro Shops that bring in a lot of non-local sales tax dollars. He also pointed out it allows Manteca once they have researched a development opportunity to move quickly.
He noted that because Manteca was able to move quickly thanks to the RDA Bass Pro Shops, JC Penney, Best Buy, a 16-screen theater and other stores are in place. A project that started six months later - a shopping center on the southern edge of Elk Grove off Highway 99 - ended up being stopped after it got started due to The Great Recession. It is still an unfinished shell today.
