There are many important issues facing Americans right now, but the one at the forefront of discussion is the high unemployment rate, which is said to be the true indication of a struggling economy. President Obama's recent speech focused on unemployment and a plan to get Americans without jobs back on their feet.
But the plan may also provide some hope to the real estate market, especially in states like Florida that were hit hard by the housing crisis.
The proposed bill would set aside $15 billion to be used for construction workers to rehabilitate houses and businesses which have fallen under foreclosure or have been sitting vacant. Due to the struggling economy and competition from foreclosures, builders have been suffering from the lack of new projects from home builders. The bill's goal is to create jobs and begin solving housing market problems.
Dubbed "Project Rebuild" by the White House, the project would mimic the work of the Neighborhood Stabilization Plan, giving grants to community nonprofits in areas suffering from foreclosures. However, Congress needs to pass the bill before activities commence.
It is hoped that the plan will help improve housing values, which on average typically drop $10,000 if located next to a foreclosed or vacant lot. Interestingly, this still happens if a homeowner is making monthly payments on their house, said the Housing Secretary. However, if the bill passes, he said it will provide a chance for property values to stabilize in all effected neighborhoods.
As of now, the NSP has helped property values in about two-thirds of participating communities, including some throughout Florida.
In addition to residential properties, commercial buildings will be looked at and the bill will provide funding to for-profits. It can also be used along with an incentive to rent out properties which are vacant or foreclosed.
President Obama also mentioned refinancing opportunities as essentially for improving the housing market as our nation rebuilds.
Source: The Wall Street Journal, "Obama Program Calls for $15B for Foreclosure Rehab," Nick Timiraos, Sept. 12, 2011.