City of Homes

Neighborhoods aren’t static—they are constantly changing, often right before our eyes. So what to do when changes aren’t for the better? When houses are let go, not lived in, not cared for? Do you cross the street? Avert your eyes? Sigh in resignation? Lock your doors and feel afraid?

Not at Way Finders, which has instead been drawn to properties in distress by the vision of what they could be—to future owners and the greater community—since the launch of the City of Homes initiative at the end of 2022. The big picture is to update blighted properties in Springfield, help stabilize neighborhoods, and drive the building of generational wealth.

The initiative’s name is a nod to the City itself: With its many big grand Victorians set within some of the oldest planned residential neighborhoods in the country, Springfield has long been known as the “City of Homes.”

The City of Homes initiative is funded by a $2 million grant from the MassMutual Foundation, in addition to $1 million from the City of Springfield and $300,000 from Baystate Health. It will give qualified first-time homebuyers the chance to purchase—via a lottery—affordable, rehabilitated homes in six Springfield neighborhoods.

Getting from here to there—from scouring potential properties to announcing lottery winners—is no small feat. Each step along the way must be scrutinized through a cost/risk analysis by Way Finders’ team.

For example, since the housing stock in Springfield is some of the oldest in the nation, the need for extensive rehab (“gut to stud”) and lead remediation are likely givens. And long vacant homes are often in such dire disrepair—tree roots growing through foundations, feral cat colonies at large—that they must be torn down. Begging such questions as: Could two homes be built on the lot? All these details, and any associated costs, must be carefully considered.

There are three ways that a property may come into the program. Two of which are known entities: purchasing outright (the most expensive) or via a city’s Request for Proposal, or RFP (if selected from among the non-profits who apply to rehab a property). But it’s the third route—special attorney receivership, or SAR—that Way Finders is excited to pilot, as it could be the start of something bigger. Something other cities, such as Holyoke and Greenfield, could replicate, if it can be shown to work.

SAR is an offshoot of a traditional receivership. But instead of the property ultimately going to auction, where it may be sold at a higher price or turned into rentals, the court does a motion to sell to a nonprofit.

Way Finders is keeping records of their efforts to pursue property through SAR, which have been analyzed by the University of Massachusetts Donahue Institute to promote awareness of affordable housing solutions. As the team continues to get other ducks in a row, including the lining up of contractors—relying heavily on minority- and/or women-owned businesses.

In terms of numbers? Initial projections—about 15 to 20 homes, each rehabbed for about $250,000—have gone down and up, respectively. The team is currently estimating an all-in cost of about $300,000 or $350,000, for 10 units on 8 sites.

Other numbers have remained constant: The program is open to those making 80% of area median income, who would qualify for a mortgage of about $172,500, and there will be a 10-year deed rider.

Meaning that if someone were to sell at year 11, all the equity would be theirs. But if someone were to sell prior to that, whatever remains of the equity that Way Finders contributed (as the cost of renovation exceeds what City of Homes homebuyers can afford) is to be paid out of the equity that’s accrued. Such a deed rider approach is designed to create a strong incentive to stay.

The funding for the program will be bolstered as homes are finished and sold, creating a cycle of funding—and a mini-lottery of sorts for the selected homeowners, who will walk right into a sizeable amount of equity.

Way Finders also could pursue more funding—and envisions the effort to rehabilitate homes continuing for years, driven by the belief that such work makes a big difference for both individuals and communities.