City Government

Boise City Active In Real Estate Speculation

The GUARDIAN got this query from a reader over the weekend and followed with an “official response” from an councilor.

“Is the Boise Guradian aware of the City of Boise purchasing residential houses? I
understand the plan is to fix, repair and update these houses and then sell them.
If they cannot sell them, then I guess the city will become landlords and rent them.”

Here is the explanation–which begs questions of appraisals, who actually benefits (banks and mortgage companies??) and who ultimately pays for deals gone wrong. Also it looks like the city is in direct competition with existing landlords.

“I have spoken with officials in Boise…

This is for the City’s Neighborhood Stabilization Program (NSP). We are a sub-grantee to the Idaho Housing and Finance Association. NSP funds come through HUD and are one of the earlier Stimulus programs actually enacted during the last part of the Bush Administration.

These funds are used to purchase vacant foreclosed homes, make any necessary repairs, and then re-sell them to new homeowners. There are income guidelines for the new owners which are essentially low and moderate income, or workforce housing income levels.

Our program has been doing our best to identify vacant properties that are having a negative impact in their neighborhoods and use this grant as a way of “re-investing” in those areas while providing affordable and workforce housing for families.

Banks sell to us at a minimal discount by regulation (1% or 2% below appraisal), but our city staff has been successful at usually getting much deeper discounts sometimes in the 20% range. For this reason, we feel we can offer these homes at a competitive price point in today’s market. We are also working on creating other incentives similar to our regular homebuyer loan program that can help with down payment and closing costs. It is a great program!

It is true however, that we can choose not to sell, and manage the property as a rental. We have actually offered on a foreclose duplex for this reason. We need to have more affordable units in town that can handle larger families due to our position as a Resettlement Community by the State Department.”

Comments & Discussion

Comments are closed for this post.

  1. I bet the banks love selling these to the city. Foreclosures in the Nampa area regularly sell at auction for $35,000-$55,000. These houses may need some work but generally appraise for $90,000. Under Boise’s HUD program, the bank’s are able to receive $80-88,000 for these.

    **I know my example is for Nampa but I assume similar examples exist in Boise.**

  2. So, let me get this straight. The current administration has lost thousands of jobs and small businesses are getting out of the high tax area that is downtown, while Bieter is professing to “feel the pain of the unemployed” that remain in Boise. At the same time, he is buying the foreclosed properties that people can no longer afford to own, because his buddies at CCDC have jacked up the rent in the downtown corridor, driving small businesses out.

    Just when I think ____(Team Dave) couldn’t possibly get any worse,they decide to play “flip this house”! Absolutely amazing!!

  3. Is a particular well connected bank making most of the sales to the city?

  4. so when the banks come under fire for shady practices, they already are doing business with the city and giving the city heafty discounts? . . . who’s in whos pockets here, sounds like the city will be in favor of foreclosing on idaho families simply in order to make a buck down the road

  5. this is an excellent example of how the people have lost all control of their own government

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