The Handbuilt City strives to rebuild Gary, house by house

2013-12-23T16:00:00Z 2013-12-24T13:57:16Z The Handbuilt City strives to rebuild Gary, house by houseJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com
December 23, 2013 4:00 pm  • 

GARY | Vacant homes and weed-ridden lots seem to outnumber houses people still live in on some residential streets in Gary.

People can sometimes seem scarce in a city that's lost more than 20,000 residents in the last decade. Home buyers can be even scarcer.

Last month, the median list price of houses for sale in Gary was $29,900, less than what it would cost to buy most luxury cars, according to the real estate website Zillow.

But a cooperative is investing money and elbow grease where others fear to tread – in distressed inner city real estate in Gary, East Chicago and Hammond. The Handbuilt City – a collective of investors, craftsmen and designers – has bought more than 450 Northwest Indiana properties in tax sales, including vacant land, houses and apartment buildings.

The Handbuilt City often taps community investors, who might loan anywhere between $100 and $20,000, to renovate homes or redevelop urban real estate. The tax sale houses are typically abandoned, but when they are not, the cooperative aims to work out solutions to keep the residents in their homes, said principal Nathaniel Zorach, who partners with investors on the initiative.

Since March 2012, the Handbuilt City has acquired or helped investors buy $2.2 million worth of tax lien properties in Lake and Porter counties. So far, the cooperative has rehabilitated a few dozen homes, often by hiring local craftsmen. The work could range from new kitchen cabinets to a completely gutted and renovated home.

"If you can buy a house for $300, and then invest $5,000, $10,000 or $20,000 in renovations, you have instantaneous low-income housing," Zorach said.

Many of the properties are laden with debt, such as liens filed over unpaid bills. But buying houses through tax sales clears the titles. The Handbuilt City can then rehab the house and sell it back or rent it out to current residents for less than what it would cost to settle the outstanding debt, he said.

The Handbuilt City purses a variety of projects that include renovation, speculative development and new construction, mainly in Northwest Indiana but also in St. Louis. Smaller projects often are funded by the Brick Trust, a crowd-sourced investment platform that lets small investors bankroll redevelopment projects in their neighborhoods.

Investors make a modest profit, but Zorach said it's more of a high-minded attempt to rebuild inner cities than a traditional investment. He also is studying Leadership in Energy and Environmental Design to ensure all the projects are sustainable.

"We call ourselves the original think/do tank," he said. "The point was so many people were talking about all this great stuff with urban and agricultural policies, but they weren't doing a whole lot."

The cooperative's goals are lofty, and it hopes to eventually expand throughout the Rust Belt.

"We want people to rethink the notion of decline," he said. "We you stroll through the rooms of Gary, Ind., it's a city like any other city. There are people in it. There are families in it. But there's a narrative of urban decline, and we want to figure out how to change that."

The number of tax lien properties in the region is huge. Lake County tried to sell about 14,000 tax-delinquent properties in its April tax sale. The Handbuilt City has bought about 1/10 of all such properties that have been sold, Zorach said.

A few homes turned out to be so dilapidated that they would not be cost-effective to rehabilitate, he said.

"We've had projects where we bit off more than we could chew," he said. "After $10,000 in renovations, we thought, 'what were we thinking?' But in Gary a tax certificate can be bought for $300, so it's not a high-stakes investment."

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