LORAIN — A wrecking ball may be in the works for a home meant to symbolize neighborhood stabilization in Lorain, and the future of the nonprofit group that was supposed to replace the home doesn’t look good either.
On May 30, 2012, City Council members authorized Direct Action of Central Lorain to spend $160,000 in federal taxpayer money from the Department of Housing and Urban Development to demolish a foreclosed house at 958 Lakeview Drive and build a new one. The house, across from Lakeview Park, was considered a “tipping point” property by Lorain officials who had hoped the new home would be owner-occupied rather than a rental property. By having the owner living in the house, officials hoped it would keep the block from becoming blighted.
The new house was supposed to be completed in May, but it likely will never be built, according to Leon Mason, Lorain’s deputy safety service director for community programs and affairs. Mason said Tuesday that Direct Action is ineligible to spend money from HUD’s HOME program because it no longer has paid staff.
The remaining $139,000 — about $21,000 was spent on asbestos and siding removal from the home — probably will have to be repaid to HUD. Mason said the cost of demolition and building a new home would cost between $180,000 and $210,000 while the property value of a new house in the neighborhood is only about $80,000.
“The HOME program doesn’t operate like that,” Mason said. “You don’t build it and take that kind of a loss.”
Mason, who said renovation also would be too costly, said it’s unlikely HUD regulations will allow Lorain to spend some of the $139,000 on demolition. He said the partial federal government shutdown has delayed getting an answer.
HUD also requires cities to use authorized community housing development corporations to handle the projects rather than letting the city hire a contractor. “I wish it was that simple,” Mason said.
Mason said Direct Action may be asked to turn the property over to Lorain County’s land bank for demolition. Ron Feldkamp, who lives next door to the Lakeview house, said he’s disappointed that a new home won’t be built.
“It’s a good neighborhood,” said Feldkamp, who moved into his home in 1963. “It’s a shame.”
Daniel Sabolsky, Direct Action executive director, said his group has fallen on hard times. He blamed it on the housing collapse and Great Recession caused by risky Wall Street derivatives trading tied to fraudulent home loans.
Sabolsky, who said he once earned $60,000 annually, said he hasn’t been paid by the group since September 2011. Sabolsky said he has stayed on as a volunteer but will leave Nov. 4.
Sabolsky said community housing development organizations around the region have been disbanding or consolidating due to the weak economic recovery.
“I was trying to turn things around, but it was very difficult to do that,” he said.
Theresa Wooten, president of the nine-member Direct Action board of directors, said the group has run out of money and is reorganizing.
“A lot of community development organizations are struggling and we’re one of them, but we will survive,” she said.
Sabolsky said Direct Action, which owns 13 properties in Lorain in addition to the Lakeview home, according to the Lorain County auditor’s website, has done a lot of good in Lorain. Sabolsky said Direct Action, formed in 2000, provided homeowner training for 1,000 families, helped raise money to keep city pools open and helped raise money for the creation of the rose garden at Lakeview Park.
“There’s a lot more good to be done,” he said. “It’s just the money ain’t there.”