These entries are also now available on the League’s website as a resource for cities in a searchable database called California City Solutions. Indio’s Neighborhood Stabilization Program was submitted in 2013 for the Housing Programs and Innovation award category.
The city of Indio (population 86,755) in Riverside County is nestled in between three mountain ranges in the Coachella Valley. Riverside County and neighboring San Bernardino County jointly create what’s known as the Inland Empire, which has been an area slow to recover from the Great Recession. The Inland Empire was one of the hardest hit regions in the nation in terms of quality of life, housing, and employment. When the housing market plummeted, Indio experienced a tremendous downturn. As a result the city had to develop recovery solutions and developed a three prong approach, including applying for the U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program (NSP).
HUD established the NSP grants to stabilize communities that have suffered from foreclosures and abandonment. Indio used multiple rounds of NSP grants, along with opening a Housing Resource Center and passing a Foreclosure Registration and Maintenance Ordinance to combat the effects of the foreclosure crisis on the community.
Indio successfully managed more than $12 million in NSP funds to transform blighted housing sites and provide low-income residents the opportunity to own their own home. From the first three rounds of NSP granted funds, along with leveraged resources and several partners, the city renovated 128 foreclosed homes.
NSP centers on acquiring, rehabilitating and reselling foreclosed and abandoned single-family homes. The program includes a comprehensive in-take where prospective first time homebuyers are determined to be income eligible and qualify for lending. Qualified participants are then required to participate in homeownership counseling. Concurrently, the city obtains ownership of foreclosed or blighted properties in targeted neighborhoods and oversees the completion of all rehabilitation work.
Qualified homeowners are next matched to an appropriate home with financing and down payment assistance is provided. For families needing time to amend credit or employment histories, the program provides a lease-to-own scenario where the “gift of time” is provided on a case-by-case basis. The program also includes demolishing a small number of blighted properties and building new homes through the Habitat for Humanity Self Help Program. Indio was the only municipality/organization in a four county area to submit a successful application and be awarded highly competitive NSP2 grant funds. HUD ranked the NSP2 award as the “top performer” nationally for having the most grant funds obligated as a percent of the allocation and again for exceeding the 36-month Federal Expenditure requirement.
Today Indio continues to deal with the effects of over-building, over-valuation, and loss of employment prior to the recession. The city’s population grew by an explosive 57 percent between 2000 and 2007. The natural byproduct of this growth was a significant housing construction boom. The local housing market became plagued by falling home prices. The median sales price for homes in Indio was $330,000 in October 2007, compared to $152,860 in 2009, a 46 percent decline.
Increasing foreclosure filings and high unemployment levels also fostered recession-related crime and disorder issues. Almost one in 10 homes, equal to 9.8 percent of all housing units, in Indio became Real Estate Owned from 2004 to 2007 and the number of homes in the foreclosure process skyrocketed from 1,400 in 2008, to 2,800 in 2009. In March 2009, Indio Police reported a 48 percent increase in robberies and a combined 8 percent increase in theft and vandalism, from the same period the previous year. A majority of these offenses occurred in neighborhoods affected by high levels of foreclosures and abandoned properties.
As the number of foreclosure filings continued to rise, desperate homeowners became easy targets for unscrupulous individuals and businesses that seek to profit from their fears and need for mortgage counseling. This was making hundreds of vacant and abandoned properties in Indio magnets of crime and blight. Eyesores such as overgrown yards, damaged gates, and broken windows proved to be inviting for local thieves, leading to an increased number of code violation complaints as well as criminal activities related to abandoned properties.
Another contributing factor to Indio’s troubled housing situation and instability is its number of absentee owners, homes vacated and owned by lenders. Many absentee owners are unaware that the properties even exist. There is a specific gap in California law that does not require lenders to maintain properties during the foreclosure process.
Adding to this challenge is Indio’s aging housing stock. The city’s current inventory of homes contains almost 28,000 housing units with 39 percent having been constructed since the year 2000. Older homes in older neighborhoods are more costly to repair and therefore more prone to blight. According to the U.S. Census Bureau, 8,130 (48.1 percent) of Indio’s housing units were constructed prior to 1980 and 2,439 (14.4 percent) constructed prior to 1960. Housing that is 30 years or older may need repairs based on the useful life of materials. Housing over 50 years old is considered aged and is more likely to need major repairs.
City leaders realized the housing market alone would be unable to absorb the quantity of foreclosed homes. Prior to HUD’s release of NSP the city created two resources in 2008 to help with the housing crisis:
Opened a Housing Resource Center for default and foreclosure prevention counseling for homeowners at risk of or facing foreclosure. Indio was the first city in the Coachella Valley to sponsor, fund and open its own center. As of mid-2010, the center had received over 5,000 phone calls or walk-ins and conducted over 600 formal counseling sessions.
Passed a Foreclosure Registration and Maintenance Ordinance which authorized the city to implement an innovative and effective foreclosure management program, requiring lenders to secure and monitor each property for criminal activity and blight and hire a local property management company that is available 24 hours per day.
The city’s approach has been so successful that they were one of five cities nationwide invited to showcase their success at a Federal Department of Justice workshop in 2009.
Indio’s NSP relies on collaboration with other organizations such as the Rancho Housing Alliance and Sheffield Foreclosure. Both partners provide daily program management assisting developmentally disabled people, landscaping assistance and housecleaning as needed on a per-project basis during the restoration phase and follow Section 3 hiring requirements.
Indio’s Home Depot extends a 10 percent discount on all carpet, plumbing and electrical fixture and appliances. Habitat for Humanity is also participating by undertaking a new home construction project. Through their Self Help Program, Habitat will rebuild/reconstruct five homes previously demolished by Rancho Housing Alliance.
Other partners include local churches, Catholic Charities, and a local transitional housing facility for program referrals (families needing housing along with down payment assistance). Indio leveraged $450,000 in local resources and assigned a staff member to monitor the program partner’s activities.
Three key elements make the city of Indio NSP program unique:
The program strategically targeted very specific, older neighborhoods that are suffering from extreme foreclosure rates and have promise of renewal. This is supported by other programs that are already in progress in these neighborhoods including State Enterprise Zone designation, HUD Low-Income Housing Tax Credits, the location of a workforce development center, a housing resource center and a former redevelopment agency financial commitment.
The program is investing in the next generation of homeowners by improving abandoned homes to energy efficient and green building standards. Water efficiency rebates are captured when possible, sustainable landscaping is installed to accommodate the desert heat and local source materials are being used to boost the local economy. Restoration also includes Energy Star products including refrigerators, dishwashers, light bulbs, fixtures, water heaters, energy efficient replacement windows, auto off light switch sensors, shower heads, increased ceiling insulation, and planting shade structures.
The city has acquired and rehabilitated 68 previously foreclosed and abandoned properties. Of these properties, 56 have been sold to first-time homebuyers. The success stories behind some of these sales include a mildly developmentally disabled man, employed by Wal-Mart and working toward independence, a mature couple who had rented for more than 20 years and was finally able to become homeowners, and a young school teacher, who feared her teacher’s salary would never allow her to purchase a home.
In March of 2011, Indio’s NSP was recognized by HUD as a Best Practices Model in Project Management and in May 2011 it was nominated in the Affordable Housing Category at the 2011 National Development Council Academy Awards held in Washington D.C. All 13 participating NSP1 homes have been acquired, rehabilitated and resold to income-qualified homeowners. Between NSP2 and NSP3, the city has acquired 60 homes out of a targeted 115 and sold 27 homes, with 17 additional homes currently under contract to be sold to first-time homebuyers. The resale of these homes has generated more than $3 million in program income, which will be reinvested back into the program to continue the city’s goal of revitalizing neighborhoods and creating homeownership opportunities within the community.
Indio’s success garnered an invitation in 2011 from the Government Accountability Office to participate in a study session and share the proactive and strategic steps Indio has taken to address the negative affects the foreclosure and vacancy rates were posing to its community. Even with the positive recognition of its efforts, the city continues to recognize that it must remain vigilant in combating absentee ownership.