As it faces an inventory of more than 6,000 vacant and decrepit houses, Kansas City plans to appeal to banks to create a loan pool of $5 million to $10 million to help private rehabbers fix and sell the urban houses. City officials estimate that, with Legal Aid’s help, they get just a few hundred houses fixed up and sold each year, and 200 more houses demolished.
It’s becoming increasingly clear that the pace of progress is so slow that the crisis won’t be solved by city government alone. City officials and Legal Aid representatives said there are plenty of high-quality rehabbers who can put between $8,000 and $25,000 into an urban core home and get each property sold and occupied for about $50,000, but they can’t scale up their efforts without more funding.
The city’s point person on the vacant housing problem had a long career in banking before he took his position with the city several years ago, and he knows banks are risk-averse, especially about making loans in the urban core. But he said the loan pool proposal to banks is doable and added that the city is willing to put up $500,000 to $1 million to absorb any losses the banks might incur.