The money the city of Grand Rapids received from the Michigan State Housing Development Authority will soon be put to good use.
The $2.5 million the city got in federal funding from the state’s urban anti-blight program will clear 100 blighted residential properties through demolition.
Twenty-six of those homes were recent tax foreclosures the Kent County Land Bank Authority bought from the city, which authorized the land bank to oversee the demolition process. Most of the homes targeted to be razed were either fire burned or are full of mold.
“Our goal is to have all those down by the end of the year,” said KCLBA Executive Director Dave Allen.
Allen said the demolition work will be put up for bid and the city has established a maximum amount it will pay for each razing based on a house’s total square footage. When the properties are cleared, the sites will be sold for redevelopment.
“We are bidding everything,” said Allen.
The final count shows the land bank bought 158 tax-foreclosed properties from the city in July. Real estate agents have listed 127 so far on the Grand Rapids Association of Realtors Multiple Listing Service. Nearly half of the total properties, 78, have already been sold and closings are expected to take place by the end of October.
Twenty-three of the houses were bought by nonprofit developers, while 29 were sold to private buyers. All buyers have signed agreements with the land bank to redevelop a purchased property. Twenty-six were sold to the MSHDA demolition project. Forty-eight homes are still on the market.
Allen said 31 properties are still to be listed. Twenty-two are either occupied or in need of significant renovations. Nine are small, unbuildable vacant lots. “All of the homes that haven’t been listed are higher-value homes,” said Allen.
The average value of the homes still to be listed is $25,000. So far, the total revenue netted from home sales has topped $1 million. If all the Grand Rapids properties are sold, Allen estimated the total revenue would exceed $2.3 million. The land bank paid about $1.1 million for the city’s tax-foreclosed properties.
“It’s anticipated that all of the properties will be sold by the end of the year,” he said.
The land bank also sold a property in Plainfield Township for $50,000 and expects to list one in Nelson Township soon for $140,000. Once all the properties are sold, the land bank should net more than $2.5 million from its foreclosure purchases.
Allen said the process has gone exceedingly well and is eliminating a lot of bad properties from the landscape. He also said renovation work on the houses that have been sold should begin quickly.
To make the entire process official, the KCLBA board accepted an agreement to participate with MSHDA in the demolition work.