Why Cities Should Buy Foreclosed Properties from Banks and Other Lending Institutions

Working in the commercial financing arena, I've recently encountered a couple of mayors looking into the possibility of having the cities purchase dilapidated properties from the banks. Their plan is to do a complete rehabilitation of the property, then help folks get back into them.

This is a fantastic plan that I, personally, would love to see come to fruition. Why? Many of the banks and other lending institutions are tearing these properties down because they are losing so much money on them and they, certainly, can't afford to repair all these properties themselves.

Realistically, it makes more sense for towns and cities to take a proactive approach in tackling the housing dilemma. Property values are way down and having dilapidated areas around only makes it that much worse. Banking institutions can only look at this dilemma in terms of financial gains or losses, whereas towns and cities can see many more opportunities within the situation.

They don't have to purchase all the properties at once. By simply investing in a handful of properties at once, they could help homeless families get back into a home. Instead of charging thousands a month in rent, they could charge lower rent on a rent to own basis. They could also assist these homeowners in finding work around the community, perhaps even look into creating career educational programs to help them hone and craft their abilities.

Suddenly, the rent is going to the community. On a rent to own basis, the community would also receive significant tax advantages. The community is also benefiting from the taxes they're receiving from the renters working in their community.

This is precisely what some community leaders are trying to do. Homelessness, unemployment, and property enhancement are problems surrounding communities throughout the entire nation. There's a change in mindset happening around the country, focusing on the need over the greed. I, for one, applaud these efforts.