An Altruistic Approach to Handle the Condo Glut

The housing boom resulted in the creation of thousands of new for-sale homes and condominium projects. The subsequent crash left many of these properties unsold or partially completed.In many cases, homebuilders and multifamily developers involved in these projects have either cut their losses and walked, lost the assets through foreclosure or are trying to secure additional financing to keep their heads above water. Add to that all the lenders with vacant houses and buildings thrown onto their laps.All the while, there are numerous homes and apartment projects sitting empty or abandoned across the country. Sure, investor appetite is high for most assets out there, particularly multifamily. But even if these projects get snapped up, the demand has yet to materialize.But what if there were something that could be done to both fill those units and address a major social issue at the same time? That’s along the lines of what Habitat for Humanity is doing in Florida’s Sarasota County, according to a report in a local paper. The organization, which usually builds homes for families in need of one, has decided to shift gears for the next few years and instead rehabilitate homes that have been foreclosed on or abandoned. According to the report, Habitat can, in some cases, buy and remodel the residences cheaper than it would cost to build them. The effort would also help to ease the blight on neighborhoods by minimizing the number of homes sitting empty. Sarasota County and the City of Sarasota are partnering with the nonprofit through a $17-million infusion of federal stimulus money, which will help acquire and revamp about 100 abandoned and foreclosed homes by Feb. 11, 2013.Similarly, advocate groups in New York City have been campaigning to have vacant condo and apartment units in some neighborhoods turned into affordable housing. The areas in question are primarily gentrified communities across the city, where developers-swayed by demographic trends-kicked off dozens of high-end projects on spec. Now that demand has decelerated dramatically, many of those luxury condos and rental apartments remain unoccupied. Why not take those vacant units to provide housing for those in need, the groups maintain?I must admit, I’ve had the same thoughts myself, when I happen to venture into those neighborhoods. Take Long Island City, for instance, which houses one of my favorite restaurants, Waterfront Crab House (if you like seafood and find yourself in that area, you must check it out). When my husband first took me there nearly 10 years ago, the area was comprised of mostly industrial warehouses and shut-down factories.A couple of years ago, there seemed to be more people living there and more coffee houses, funky lounges and restaurants opened up, and much of Long Island City was rife with development-mainly, of luxury condo projects. Go there, today, however, and it’s clear that the developers overshot their target. There are no fewer than a dozen high-rise condo towers out there, some unfinished and some only partially occupied-or both.In a city is already suffering from a dearth of housing for low-income households, those vacant units could serve a much better purpose than they are now. Now, given what it cost to develop these projects and the financial weeds the developers and lenders may be in, I don’t know if this is even feasible. But it’s a thought…