The settlement money the Fair Housing Center of West Michigan will receive will allow the organization to enter a new chapter in its 33-year history, as it will become a major player in helping to restore and stabilize a residential section of Grand Rapids.
Executive Director Nancy Haynes revealed last week the organization has reached a groundbreaking agreement with Wells Fargo Bank over neglecting the maintenance of foreclosed homes in a southeast-side Grand Rapids neighborhood largely occupied by people of color.
The local office was part of a national complaint led by the National Fair Housing Alliance and filed with the U.S. Department of Housing and Urban Development. The complaint argued that some mortgage lenders favored white areas over those in minority sectors regarding the upkeep of bank-owned homes.
As a result, the Fair Housing Center will get $1.4 million for its new venture along with another $170,000 in damages. Both figures are part of a $42 million settlement Wells Fargo made with the alliance and 13 of its members.
“We’re going to focus on a neighborhood that has really been hard hit by the foreclosure crisis the last six years. We’re going to focus in our area on the southeast side, and we’re going to narrow it even further and try to find ways to stabilize these few streets,” said Haynes.
The Fair Housing Center will be reaching out to potential partners to put its stabilization plan in play. One of those is The Rapid, which is building bus stations along its new Silver Line route, work that is expected to improve the serviceability and aesthetics of those blocks.
Another is the Friends of Grand Rapids Parks, which is interested in creating a green corridor in the neighborhood. A third is the transformation plan Grand Rapids Public Schools is undertaking. There are two schools in the area targeted for stabilization in which the system will make investments.
“We’ll be able to bring resources to those projects to try to leverage other resources to make everything happen and get bigger and better than what the groups were planning,” said Haynes.
“The money that we will be bringing doesn’t have any strings attached to it. It’s here to stabilize the neighborhoods that have been devastated by the lack of maintenance.”
Despite taking on the problem, the Fair Housing Center isn’t going to transform itself into something new. “We’re not going to create a separate part of what we do. We’re not going to create a community development organization,” said Haynes.
“We’re not going to be the one taking titles of houses and contracting with someone to have the houses rehabbed. What we want to do is to work with groups that are already doing that and give them more resources in the form of a loan or grant to do aggressive rehab of these abandoned houses.”
To that end, the Fair Housing Center plans to approach nonprofit housing development firms like LINC Revitalization and the Kent County Land Bank Authority.
In addition, the Fair Housing Center stabilization plan looks beyond the rehabilitation of these houses, as it also reaches out to help new owners for the homes. Haynes said they’ve begun speaking with some employers to see if they can assist their workers in making down payments.
“We’ve talked with some folks at Pridgeon and Clay. A lot of their work force lives in the neighborhood and they have a hard time finding good housing. We’re hoping that maybe they can put some money into some down-payment assistance for their folks, and then we can bring matching money into that to help their employees buy houses because home ownership is such a key to stabilizing neighborhoods,” she said.
Negotiations also are going on with two other national banks over the same matter from complaints filed with HUD last April and September. Haynes said 18 other cities across the country will benefit financially from last week’s settlement. Grand Rapids is the only Michigan city to benefit from it.
Haynes said Wells Fargo has agreed to adjust its policy regarding vacant foreclosed homes through an eight-point program it developed.
“I want to highlight that they took responsibility. They made changes and will hopefully emerge as an industry leader on how to manage and market its real-estate-owned properties,” she said of Wells Fargo and the partnership it agreed to.
“We’ve never done anything like this before. We’ve always been directly focused on fair housing and the fair housing laws. So this is a little bit different. What we really want to do is just bring resources and a fair-housing focus to the great work and planning that other groups are doing.”