Shelbyville may begin purchase of blighted homes

The city of Shelbyville may soon be negotiating the purchases of homes and structures in order to put them in front of a wrecking ball at some point down the road.

Among items the city council will vote on next Thursday will be approval for city manager Ed Craig and planning and codes director Kip Green to work out the prices and acquire blighted properties under the Neighborhood Stabilization Housing Grant that Shelbyville recently received.

The $326,023 grant is from the National Stabilization Program (NSP), part of Phase I of the Housing and Economic Recovery Act of 2008, also known as the first "stimulus package" that was signed into law by former president George W. Bush.

With the grant, the city can purchase blighted properties around Shelbyville within specific guidelines, demolish them, and prepare the lots for other homes to be built.

Councilman Lee Roy Cunningham asked Green Tuesday what would happen if a property owner chose not to accept the city's offer.

"Then we'll move on to another property," Green said.

Green also said there were some property owners that want to sell at the rate being offered by the city and he added "we'll get our ... addresses."

The city has partnered with the Shelbyville Housing Authority in the effort and once the dilapidated building is torn down, the property will be turned over to the Authority.

After that, the Shelbyville Housing and Development Association (SHDA), a non-profit established by the Authority, would buy the cleared lot at a discounted rate.

The NSP grant calls for placing a family whose financial status meets the criteria of earning 120 percent or less of the average median income. Working along with Habitat for Humanity, SHDA would build a residence while helping the families acquire the needed financing.

Green said last month about 25 locations in Shelbyville could be considered "blighted," but the city will only be able to take care of six properties with the grant.

The grant is "very specific" and the structure to be torn down must be within a residential neighborhood, with some homes targeted on Bethany Lane, Jackson Street on the west end of Shelbyville and one home on Earnhart Street.

But Green added last month he did not know how the list would finally work out.

According to information from the Tennessee Housing Development Agency, NSP funding is provided by a formula based on areas with the greatest number of home foreclosures, areas with the highest percentage of homes financed with sub-prime mortgages and areas identified as likely to face a significant rise in the rate of home foreclosures.