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Petersburgs foray into the residential real estate market


 
27.10.2008

Petersburgs foray into the residential real estate market


 

The City of Petersburg is big into real estate. In fact, the city is one of the largest property owners in Petersburg, with more than 450 holdings worth more than $95 million.

Its all part of the citys redevelopment strategy.

While some of the citys properties are traditional government buildings, much of its holdings are in the residential sector.

The citys real estate purchases total nearly $17.2 million, with much of it coming in the past decade, according to city records.

Since 2003, the city has purchased a total of 115 properties for $5.9 million. Petersburgs total assessed value of land and property is $2.02 billion and the city owns about 5.5 percent of that total.

Also, city officials point out that the city has made a good investment it has paid about $17 million for properties assessed at $95 million.

Many of these properties have been purchased in areas targeted for neighborhood redevelopment, especially around the citys elementary schools. The goals were two-fold remove or reduce blight and accumulate the properties into a critical mass for redevelopment purposes.

But the strategies have raised two issues: First, the properties arent generating taxes. Second, the city has to spend resources trying to maintain these properties.

The city concedes it has been a challenge to maintain the properties, partly because city manpower is diverted to maintain the properties of unresponsible owners. While we understand the citys goal of acquiring property for future redevelopment, having city-owned buildings that are turning into urban blight is not a good idea.

One solution is to incorporate the cost of maintaining a property in the purchase price of any building. Thats the recommendation of a recent efficiency study on Petersburg governments. The study says the citys acquisition of properties is increasing the workload for the Department of Public Works.

Also, its time for the city in the near future to start looking at avenues to redevelop the residential properties. The city has had some success in redeveloping properties, but more needs to be done.

Petersburg is trying to work with Virginia Local Initiatives Support Corporation to redevelop some of the properties. Virginia LISC acts as a bridge between corporations, government, and developers interested in increasing the supply of affordable housing.

But that effort has yet to produce a redevelopment project, although LISC is working with a developer to begin some of that work.

What more can the city do to redevelop its growing inventory of residential properties? Can it establish a low-income housing fund that would help potential homeowners buy and renovate the properties? Could it get grant money for such an endeavor? Or are there other avenues to redevelop these properties?

All those questions should be a key part of any economic development plan for Petersburg and should be a major focus of energy for the Petersburg City Council.

SV Development