Government remedies in conflict
Following the financial and real estate crashes in 2007-2009, two federal agencies worked at cross-purposes in Atlanta’s hardest-hit neighborhoods.
Federal Deposit Insurance Corp.
Action: In late 2009, the federal bank regulator auctioned more than 450 foreclosed homes in metro Atlanta formerly owned by the failed Omni National Bank to a handful of large private firms.
Aim: Facing mounting bank failures, especially in Georgia, the FDIC said the quick, bulk sales were to maximize returns and reduce the risks and costs of holding hundreds of foreclosed homes.
Outcome: Critics said the FDIC sales – some homes went for less than $3,000 each — depressed values in Atlanta's hard-hit neighborhoods. Local groups participating in another federal program aimed at shoring up struggling neighborhoods said the FDIC's foreclosed homes weren't offered to them except in pools too large for them to handle.
U.S. Department of Housing and Urban Development
Action: Starting in late 2008, HUD's Neighborhood Stabilization Program (NSP) granted almost $7 billion over three years to state and local governments, and community groups, including more than $88 million in metro Atlanta.
Aim: The program wanted to stabilize struggling neighborhoods by helping states, cities and community groups buy foreclosed and vacant homes to fix up and rent, or sell to low-income homeowners.
Outcome: Few former Omni bank homes were sold to NSP participants. Most groups bought foreclosures from other sources. In early 2010, HUD rejected Atlanta's request for a second-round program grant of $58 million because it didn't spend the first $12.3 million grant quickly enough. It later got $4.9 million in a third round.
HOW WE GOT THE STORY
Atlanta Journal-Constitution reporters Russell Grantham and J. Scott Trubey were curious about how some of metro Atlanta’s hardest hit neighborhoods were coping with the housing crisis five years after the mortgage meltdown and the start of the Great Recession. The reporters examined hundreds of pages of property records, crime statistics, federal criminal complaints and real estate research. They interviewed residents, investors, community activists, city and police officials, and real estate experts about the housing collapse and the unique issues specific to several southwest Atlanta neighborhoods.
The breadth of Atlanta’s epic housing collapse unfolds block by block in the cluster of historic neighborhoods just west of Turner Field.
In some areas, it’s possible to walk down entire blocks and see nothing but boarded up or fenced off properties, the owners having long since abandoned them to weeds — and thieves. Many of the properties, rehabbed before the housing market’s collapse in 2007, have been plundered for plumbing fixtures, wiring, doors and windows.
Atlanta code enforcement officers do almost daily battle with squatters occupying properties illegally, or attempting, often futilely, to convince occupants to clean trash collecting in yards.
In some areas, half the homes are vacant. The general climate of abandonment has attracted drug dealers, vagrants and prostitutes, who flout the law in full view of the law-abiding residents who remain.
Subscribers can read the full story in Sunday's AJC or on our subscription tablet app.
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