INDIANAPOLIS— Indiana communities will have the opportunity to apply for a share of $75 million in federal funds to demolish blighted and abandoned homes.
Indiana Lt. Gov. Sue Ellspermann announced the Blight Elimination Program on Monday. The funding will come from the $221.7 million Indiana receives from the federal Hardest Hit Fund, which largely goes toward helping struggling homeowners make mortgage payments.
“Indiana has a challenging housing situation,” Ellspermann said. “There are blighted and abandoned homes negatively impacting our neighborhoods across the state. You know what that does. It reduces property values. It increases crime and it drains valuable municipality resources. In fact, you probably know that Indiana has the highest percentage of abandoned foreclosed homes in the country.”
Indiana counties are broken down by population into six divisions to apply for the money and a set amount of funding is dedicated to each division. Vanderburgh County is grouped with 11 other counties that can apply for a portion of $19 million.
Applicants will have to identify the “end use” of the properties in applying for the funds and the community partner that will participate in the ongoing maintenance of that lot.
Overall, the program aims to eliminate at least 4,000 blighted and abandoned homes in Indiana, which is a small dent of the approximately 50,000 of those properties across the state.
The federal government has recognized the connection between property values and foreclosure rates, said Mark Neyland, director of asset preservation for the Indiana Housing and Community Development Authority. Neyland said while unemployment and loss of wages is a large contributing factor in foreclosure, a significant decrease in a home’s value also plays a role.
“The nexus is we eliminate abandoned and blighted properties to attempt to stabilize property values and to also encourage redevelopment of the area,” Neyland said.
The funding will go toward helping finance the cost of demolition, and while a 10 percent local match is required that can come in the form of volunteer labor or a rehabilitation project, Neyland said.
The national average cost of demolishing a home is $8,600, but the state has built in funds for helping municipalities acquire properties and for ongoing maintenance.
Indiana lawmakers also are weighing legislation this session to help address abandoned homes. The measure would allow properties that are certified as vacant or abandoned to be sold outright at tax sales, without the current one-year redemption period a buyer must wait to take ownership.