Richmond's Plan to Bring Decaying Houses Back From the Dead

The city of Richmond has a zombie problem -- that is, zombie houses.

Those are houses left abandoned and in extreme states of disrepair for years, some stuffed full of refuse and crumbling, others completely gutted by fire. It's not easy to fix them because in many cases the owners have died or were forced to walk away due to foreclosure. 

Richmond estimates that there are 1,000 such homes, each one costing the city $7,000 on average per year in cleanup and policing. They're also a major eyesore in otherwise well-maintained neighborhoods. Now the city has a plan to tackle the problem.

On Tuesday, the Richmond City Council voted to issue $3 million in social impact bonds to private investors.  They're low-interest loans that will allow funders, including banks, to front the money for the city to purchase the houses and renovate or rebuild them. Once they sell, the investors get paid back and Richmond has more money to funnel into revitalizing more houses.  The city can collect property taxes on the lived-in homes, and the property values in those neighborhoods rise.

Richmond Code Enforcement Superintendent Denée Evans says that because the homes are empty, they've become prime targets for illegal dumping and squatters. In the winter people build fires to keep warm, Evans says, and end up nearly burning them down.

There's one such house on A Street in the Iron Triangle. It's been empty for a decade, but caught fire only this past year. Nearly the entire structure is charred, and the lot is open and full of trash and tall grass. Evans is worried about curious neighborhood kids.

"They like these type of structures they can go in and play," she says. "But it's unsafe. You can see the roof is collapsing , the floors are probably unsafe and unsteady. To be honest with you, before this is acquired, we'll probably have to put up a fence because this is a safety issue."

Acquiring the homes is the tough part. The Richmond Community Foundation is helping to facilitate purchasing the properties. Jim Becker is the president and CEO of the nonprofit. He says many of the properties have stood empty because the previous owner died  and heirs either couldn't be found or didn't want to take over the house.

The program will have to navigate the tricky world of probate to reclaim such houses from unresolved estates. Others were abandoned after the 2008 housing bust and will have to be purchased from the banks that hold the mortgages. It's going to take some time.

Once the houses are returned to a livable state, Becker's organization will partner with another nonprofit, SparkPoint, to sell them to low- and middle-income families through a First Time Homebuyer program.

"Clients that graduate from these programs will have the first opportunity to purchase these homes," says Becker, "without competition."

The City Council expects the bonds to be filled within 30 to 60 days. They've got between 10 and 15 houses in their sights to start with, but plan to roll out the revitalization program to many more. In this way, they hope to bring new life to those zombie homes and many of Richmond's neighborhoods.