Launching the largest homebuyer program in the U.S., Newark prepares for a five-day conference to place thousands of residents into homes as owners.
This weekend, the City of Newark and the Neighborhood Assistance Corporation of America (NACA) converge to host an event that hopes to build generational wealth in Newark. The “Achieve the Dream” conference will run from Friday to Tuesday, June 23 to 27, at the Robert Treat Hotel. Planners are ready to host thousands of interested homebuyers in Newark who have found difficulty in purchasing a home while navigating the volatile economic waters of a gentrifying city within reach of NYC.
The idea is simple. The city sells homes from $1, while new homebuyers secure a renovation mortgage from NACA to fix up one of the thousands of distressed or foreclosed properties in Newark. While the concept seems easy, the application comes with a multitude of challenges.
Newark, New Jersey has long been a symbol of resilience and transformation. As the largest municipality in the state, it faces a myriad of challenges, including affordable housing, which has caused grave economic disparities, and a stunt of growth with community development. The 2020 census reported that Newark’s median income is $41,335. Most Newarkers do not work in the majority-Black city (48.6%), and only 23.2 percent of the homes there are owner-occupied. The wealth gap was also shown in a recent low voter turnout, where roughly 12,675 people cast a ballot for the mayor in a city where over 164,000 voters are registered.
After a Rutgers CLiME report revealed that most single-family homes were purchased by corporations in recent years, which resulted in rents rising and owner-occupancy to fall, the Ras Baraka Administration has put into place several initiatives to thwart the loss of Newark homeownership.
| Watch: Newark has one of the worst housing crises, dismantled Black middle class a Rutgers CLiME report reveals
This past May, the Newark Municipal Council approved an ordinance from Mayor Baraka’s office to deal with the rising difficulties in housing. The Homeownership Revitalization Program is a recommendation made from the Equitable Growth Advisory Commission, an entity formed to deal with Newark’s extreme wealth gaps. The measure enables low-cost sales in rem properties to residents who have lived in Newark for five years or more or been displaced by gentrification.
“Across America, LLCs are buying up owner-occupied homes and turning them into corporately owned expensive rental units,” Mayor Baraka said. “In Newark, where we work hard to expand homeownership, we have created a wide-ranging strategy to do everything possible to counter this dangerous trend. The Homeownership Revitalization Program is a new way to enable longtime Newark residents to become homeowners at costs that they can afford.”
The city plans to partner with several housing organizations to meet the needs of the average Newarker who wants to buy. Their first collaborator, NACA, has emerged as a potential catalyst for positive change in Newark. With its focus on affordable homeownership and financial empowerment, the NACA program has the capacity to uplift the city and its residents, creating a brighter future for Newark.
Earlier in the year, at an event where the city announced it was launching again, their $1 home initiative, NACA presented at the meeting which had attendees waiting in a line that snaked around the corners of City Hall.
With a “no down payment, no closing cost, no fee, and no mortgage insurance at a below market fixed rate without consideration of one’s credit score,” model, NACA’s founder and president, Bruce Marks projects that the Newark measure can serve as a “national model where community residents can purchase a vacant residential home or lot for $1 and then renovate or build a beautiful affordable home.”
The idea will be tested this weekend.
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The rocky real estate market
When it comes to purchasing a home, many potential buyers face numerous obstacles, including high down payments, strict lending requirements, and unaffordable interest rates. Jerome Powell confirmed that interest rates will continue to rise throughout 2023, which could have significant implications for the housing market.
Many economists believe the housing market recovery will continue to decline as well as the homeless population on the streets to increase as the squeeze on the American people accelerates. From Los Angeles to New York, the unhoused numbers are skyrocketing, which has led to a trickle-down effect of both social and financial woes.
Currently, commercial real estate is hemorrhaging with corporations walking away from leases. Trillions of dollars worth of commercial real estate are going bad leading to a commercial real estate crisis in the U.S. For example, the Westfield, a shopping center giant, has purposely defaulted on a $558 million loan securing the San Francisco Centre mall.
San Francisco has become the epicenter of the commercial real estate crisis, with declining sales, occupancy, and foot traffic. Even Elon Musk says Twitter has stopped paying rent on its headquarters in San Francisco, with no plan to restart payments.
Major cities like New York City, Los Angeles, Philadelphia are experiencing a decline in quality of life and existence so if equality is what the current administration is after we must make all practices fair and equitable. When an everyday citizen walks away from paying bills they become homeless with soup kitchens as their restaurants, governments and corporations get debt ceiling raises and bailouts.
With the distress in urban areas after the pandemic, cities like Newark need to implement programs like NACA to keep residents as productive consumers and citizens that will in return, spur the ecosystem of businesses to stay and provide employment. Forget the banks, the entire population is too big to fail. The NACA’s of the real estate industry will be essential to offset the carnage we all currently face because these foreclosures do not seem to be slowing down anytime soon. Now the question is: Will NACA’s initiative adequately help the real Newarker?
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