With homeownership being the most common way families accumulate intergenerational wealth, experts say Newark’s low rate of owner-occupancy is a challenge to the long term economic well-being and stability of the state’s largest city and its residents.
So in July, city officials announced a program encouraging residents to use their federal Section 8 vouchers to subsidize the mortgage on a home purchase instead of rent.
This week, Patricia Hobbs became one of the first beneficiaries of the Newark Land Bank Section 8 Homeownership Conversion Program, moving into a 3-bedroom house she purchased on Peshine Street in Newark’s South Ward.
Under the program, Hobbs will use her $300-a-month Section 8 voucher toward her $1,500 monthly mortgage payment — she pays the remaining $1,200 — and begin building equity.
“It’s wonderful,” Hobbs, 46, a senior customer service representative with Newark-based Audible, who had been using her Section-8 voucher toward rent on the first floor of a two-family house in the West Ward.
During a ceremony outside her new house Tuesday morning Hobbs was introduced by Marcus Randolph, president and CEO of Invest Newark, the city’s economic development agency, which sold Hobbs the house, an abandoned property acquired by the city and rehabilitated by a local non-profit.
“The next person I’m going to introduce is a dreamer,” Randolph told the gathering. “Please help me introduce the newest homeowner in the great City of Newark...”
“And the South Ward!” added South Ward Councilman Patrick Council, one of several council members in attendance along with Mayor Ras Baraka.
Hobbs told the gathering that she had “manifested” the house or brought it about by envisioning it and then taking the steps necessary to make it a reality. That meant applying to the program, which granted her application and made her one of the program’s first four new homebuyers, announced Tuesday.
“Two years ago, I woke up and started writing that I wanted a 3-bedroom, 2-bathroom, driveway, backyard with a pool!” Hobbs told the gathering, later conceding that there’s no pool. “I knew that I wanted it, but I did not know that I would get it through the City of Newark.”
Hobbs moved in last weekend with her two adult daughters after she bought the house from the city for $190,000, using a mortgage arranged by the Neighborhood Assistance Corporation of America, or NACA. The Boston-based non-profit specializes in low-cost and no-deposit mortgages.
The program is funded by a $125,000 grant from San- Francisco-based Wells Fargo, a $1.2 million low-cost loan from the Manhattan-based Local Initiatives Support Corporation, and additional financing from the Newark-based Victoria Foundation.
The city launched the program last summer in conjunction with the Newark Housing Authority, taking advantage of a federal Department of Housing and Urban Development rule allowing Section 8 vouchers to subsidize monthly mortgage payments rather than rent.
Newark’s conversion program is one of several city initiatives launched under Baraka to address a variety of housing challenges faced by many of Newark’s 310,000 residents, including a shortage of affordable housing and its low rate of homeownership.
Just under a quarter of Newark’s condominiums, townhouses and single-family homes are owned by their occupants, compared to a statewide rate of 64%. A recent Rutgers-Newark report revealed that Newark’s already low owner-occupancy rate is further threatened by a trend toward corporate acquisition of single and multi-family houses as Newark becomes more attractive to residents, driving up rents and purchase prices.
The mayor congratulated Hobbs and the three other new homeowners, Laura Narvaez, Marlene Wiley and Araselys Maldonado, who attended the event but did not speak.
“This is our own little ‘Miracle on 34th Street,’” Baraka said, referring to the 1947 film and 1994 remake set between Thanksgiving and Christmas when a department store Santa Claus claims to be the real thing.
Baraka said Newark is one of 250 cities across the nation that have created a municipal land bank under state enabling legislation, and the only one in New Jersey, giving the city greater flexibility to transfer city-owned properties.
“We can be very creative and innovative with these properties,” Baraka said. “What we’re doing today is the absolute right thing to do.”
To restore the formerly rundown house on Peshine Avenue before selling it to Hobbs, Invest Newark hired a local non-profit organization, YouthBuild Newark, which trains at-risk teens and young adults in construction, including through the curriculum of the LEAD Charter School, which the organization operates.
A team of two instructors and a half-dozen LEAD students spent six months restoring the house from top to bottom.
“Building is cool,” said Malachi Mason, 18, a senior at the school who was at Tuesday’s event. “It’s a good feeling overall to see a homeowner smiling about a house you helped build. It makes you want to do it again.”
Nobody knows Jersey better than N.J.com. Sign up to get breaking news alerts straight to your inbox.
Steve Strunsky may be reached at sstrunsky@njadvancemedia.com
Ad Choices