"Sweeping changes in the works"
      By Tony Doris

Blighted areas can bounce back.

Take a look at the West Grove. Streets are riddled with rundown houses. Crack dealers materialize like roaches. Garbage collects in vacant lots.

Now look a few blocks away, at the eastern Gables, another low-income, black neighborhood. Night and day. Virtually no drugs. No plague of code violations.

It's not an occupying army of police that makes the difference. It's a piece of paper - a deed. That view is shared even by the Miami police who've been focusing on West Grove crime, with some success, over the past two years.

Lt. Dan Watkins, who leads the West Grove push, freely concedes that no good deed by police has the lasting impact of a warranty deed and the pride that it generates. Referring to the well-groomed streets in the once-blighted area just down the road, he sums it up: "Those people own those homes."

But at a time when a rising economic tide creates opportunities and lifts communities nationwide, Miami's effort to foster home ownership in blighted neighborhoods is being held down by forces from within and without. The good news is that the effort is being made, after years of official indifference; the bad news: It's a battle that will have to be waged on many fronts simultaneously - from repairing the city's finances, to preventing insurance rate hikes and overcoming interest rate rises.

The New York Times led its Memorial Day paper with a story about blighted areas reviving around the country, thanks to dropping crime rates. The article cited Miami's long-depressed Overtown and Liberty City as areas where progress toward economic development is being made.

Crime is dropping in neighborhoods like the West Grove too. Since a 10-officer team was injected into the one-square-mile section of Coconut Grove in January 1998, says Watkins, robberies have dropped by 77 percent, burglaries by 48 percent, stolen vehicles by 52 percent.

While numbers like that hold out hope, the question is whether they indicate long-term relief for residents after decades of despair. Deploy the officers elsewhere for a couple of weeks, and it becomes obvious just how tenuous those improvements are: Postpone a blitz or two to keep the peace for Elian Gonzalez protests, for example, and the bad guys are back on the streets.

"We lost footing," concedes Lt. Watkins. "So now we have to catch up again."

Meanwhile, other neighborhoods are crying out for the same level of protection - Little Haiti, Wynwood and others. But in a city stretched thin by years of financial crisis, it's hard to imagine maintaining such an intense level of enforcement in all places, all the time.

And it's not just law enforcement that has to be consistent; it's city code enforcement as well. Neighborhood enhancement teams, invigorated by the participation of City Commission newcomer Johnny Winton, are mobilizing in the West Grove and other target areas, to force clean-ups and home repairs. And along with city attorneys and asset managers, NET teams are working on a system to speed up foreclosure takings of blighted properties.

The idea, says NET coordinator Manuel Diaz, is to send out a message by taking on the worst violators, to put everybody on notice: "You just can't do this to the city. It's just not fair. It's deteriorating, it's a health hazard to just let the property sit there and rot."

Of course, telling a slumlord that it's not nice to keep a house in disrepair is like asking a murderer to be a good boy. Absentee owners who won't fix houses need to be hammered with foreclosures. That's an expensive process, demanding a lot of staff time because of the legal hurdles required. And it's expensive to maintain properties prior to reselling them, so the city will have to pick its fights with care.

Even if police concentration keeps crime in check and code enforcement and foreclosures remove the worst of the blight, refilling a neighborhood with homeowners presents a more daunting challenge - one aggravated in a major way by one side-effect of the nation's economic recovery: rising interest rates.

To get for-profit builders to come in, to build houses that the working poor from the West Grove can afford, as opposed to just gentrifying the neighborhood, they need to help prospective buyers layer low-cost, second-mortgage programs on top of fixed-rate, first mortgages. But with interest rates rising, as they have by more than one percentage point over the past year, and with a threatened tripling of Florida windstorm insurance pool rates over the next three years, qualifying buyers even for government-subsidized loan programs becomes problematic.

Andy Parrish, the one for-profit builder with a social conscience who's been willing to brave the West Grove in recent years, says that insurance and interest rate hikes are making him less able to qualify the low-end buyers he's been trying to serve.

According to his calculations, to own a three-bedroom house that he could sell for $109,000 and to meet the conditions for subsidized mortgage programs, about a year ago a family income of $28,000 would have been enough. Now it's up to about $30,000, thanks to the interest rate hikes. And for every $100 per month increase in insurance costs - as a proposed windstorm rate hike would create - the minimum family income requirement goes up another $4,000.

In other words, it may soon take a family income of $34,000 to buy a modest new house in the West Grove. That means the working poor are nearly out of the home ownership picture, if they ever hoped they'd be in - unless mortgage subsidies improve, insurance rates are restrained and local governments help builders control costs.

One county commissioner has proposed a program to lure builders to inner city neighborhoods by easing costs. Under the "Green Infill Housing Machine" proposed by Miami-Dade Commissioner Miguel Diaz de la Portilla and under study by county staff, home designs could be approved in advance for use on specific lots identified by municipal authorities to encourage construction. The program could spare builders permit costs and delays and enable homes to be priced more affordably.

The bigger impediment to buyers, though, is not purchase price, says builder Parrish: "It's all in the financing." When loan programs require a buyer's total monthly housing payments to be less than 30 percent of monthly income, it's the volatility of insurance costs that can make financing impossible.

That's a real threat, as the Florida Windstorm Underwriting Agency, which insures 280,000 homeowners from Key West to Palm Beach County, is pushing for a rate hike that would double premiums around the state on average, and triple and quadruple some.

Florida Insurance Commissioner Bill Nelson, a candidate for U.S. Senate, is fighting that in court. And at least one of the contenders for his commissioner job, state Rep. John Cosgrove, has pledged to fight what he sees as an industry-driven attempt at "rate rape."
Richard Naue, a major in the Coral Gables Police Department, remembers when the eastern Gables was as blighted as the West Grove neighborhood that it borders.

Like West Grove, Naue says, the Gables had many residents with long-held ties to the area, a core of community feeling. Police work, an active Crime Watch by residents, as well as code enforcement by the city, contributed to the turn-around. So did removing old rental apartments and replacing them with a series of new homes, a strenuous effort accomplished by a nonprofit group with help from a local architectural firm.

It was the home ownership in particular that instilled pride and lifted the community's expectations of itself, making the improvements sustainable, says Naue.

On the other side of the city line, Miami is showing signs that it can muster the resolve to confront problems in neglected neighborhoods.

If more of the city's elected officials would get active in the effort locally while making the city's needs known in Tallahassee and Washington, lasting change could be achieved. If not now, when the country as a whole is doing well, then when?

Web Published Monday, June 5, 2000
Published in Daily Business Review on: Monday, June 5, 2000

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