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Contract No. H 2291



Prepared for:

February 1977

Office of Policy Development and Research
Department of Housing and Urban Development

Prepared by: Peat, Marwick, Mitchell & Co.




"The research and studies forming the basis
for this report were conducted pursuant to
a contract with the Department of Housing
and Urban Development (HUD). The statements
and conclusions contained herein are those
of the contractor and do not necessarily
reflect the views of the U. S. Government
in general or HUD in particular. Neither
the United States nor HUD makes any warranty,
expressed or implied, or assumes
responsibility for the accuracy or

completeness of the information herein."

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The Department of Housing and Urban Development has been experimenting with ways to deal with a problem that you, as a mayor or city manager, may be facing--blighted neighborhoods with large numbers of vacant and vandalized houses. The Community Stabilization Program described in this report is one of those experiments. It is attempting to reverse the decline of a 400-unit subdivision, which is suffering from vandalism, a depressed real estate market, resident flight, and other urban problems.

Under this program, HUD-owned houses were removed from the sales market by first repairing and then renting them. The rental program will end when a sales market has been reestablished in the neighborhood.

The city government has agreed to serve as property manager for the vacant properties. HUD arranged for the repairs necessary to bring the houses up to habitable condition and the city is overseeing the renting and maintenance of the houses and is helping to arrange their eventual sale. The city is also providing a concentrated neighborhood service effort including such efforts as increased police patrols, day care programs, and other stabilizing influences.

Should you find similarities between the problems described here and those in your city, this report can be used as an outline for devising your own Community Stabilization Program. It is important to emphasize that this is not a blueprint for establishing a program. Rather, it describes one city's problem and the program developed for its resolution. It also offers model agreements and other documents developed for the program. Your own program must be tailored to the specific problems affecting a distressed neighborhood in your jurisdiction.

If, after reading this report, you feel that a Community Stabilization Program might provide an effective remedy for your neighborhood problems, you should discuss with the local HUD field office the next steps to be taken.


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