Merced trying to stem blight by offering loans

Owners in certain parts of city can get low-interest money

jsmith@mercedsunstar.comMay 13, 2013 

— Still suffering from the housing crisis, the city of Merced has identified three hard- hit neighborhoods with more than 800 blighted homes and apartment complexes.

One in three buildings in central, south and northwest Merced need significant structural repairs, according to data from the city's housing division.

"It brings down the sense of community for Merced as a whole," said Elaine Post, the city's development director. "If you have a lot of neighborhoods that look like that, what does that say about our community?"

In an effort to help cash- strapped homeowners fix their properties, the city is ramping up a program to provide low- interest loans for home repairs.

The city hopes to bring in about $850,000 this fiscal year in state and federal dollars to fund the program. At about $25,000 a loan, the city estimates it can help rehabilitate 10 to 15 properties a year.

Many people would like to refinance their home to pay to fix the roof or repair the foundation, but they can't because they're underwater on their mortgage or struggling with credit, Post said.

"A lot of people aren't able to get a loan," she said. "It's extremely important that we try to help them."

This program can help the city recover from the housing crash, said Andy Krotik, manager of Coldwell Banker Gonella Realty.

"Blight can affect your property value 10 to 20 percent," he said. "The desirability to live there can be skewed."

Not as much blight

However, three years ago the blight was "significantly worse," he added. "The blight is disappearing because there's less foreclosures, and third-party individuals are purchasing houses and cleaning them up."

At the same time, it's not disappearing fast enough for everyone.

"These city programs are just a fraction of what's needed," said Mayor Stan Thurston. "I think we need to start talking about upgrading the look of our downtown residences. I think the city's going to have to become far more aggressive with people who have rental property."

This blight holds the entire community back, he added. "In order to have a robust commercial downtown, you have to have a robust residential downtown."


To qualify, an individual must own property in one of the three designated areas. Apartment building owners can also qualify by agreeing to yearly city inspections and rent caps for low-income tenants.

In central Merced, between G and V streets and between Childs Avenue and 13th Street, 43 percent of houses would qualify as blighted, according to city officials.

In northwest Merced in the Loughborough neighborhood, from R Street to Black Rascal Creek and Olive Avenue to Black Rascal Creek, that number is 25 percent.

In south Merced, between G and M streets and 13th Street and Bear Creek, 36 percent of all houses are blighted.

While some home equity is required to qualify for the program, the city doesn't look at credit history. Interest rates are set at 3 percent, and some qualifying homeowners could receive up to a 30-year deferment on payments.

Reporter Joshua Emerson Smith can be reached at (209) 385-2486 or

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