Buy A House For A Buck? Newark Can Sell Homes For $1 Under New Rule

NEWARK, NJ — A program that could make vacant homes available for sale in Newark for as little as $1 recently got a green light from the city council.

Last week, the Newark City Council voted to approve an ordinance that creates the Homeownership Revitalization Program. It will allow people who have lived in Newark for at least five years – including those displaced by “gentrification” – to purchase an “in rem” property owned by the city.

The city is able to sell the properties for any price it deems “reasonable,” which could potentially be less than the price of a candy bar. People participating in the program will only be allowed to buy one property each.

Read the full ordinance at the bottom of this article.

There are a few catches. The new owner must live in the home for at least 10 years. They also need to provide cost estimates for any work that’s needed to bring the property into conformance with state and local codes, and prove that they have the ability to pay for the repairs.

No more than 12 applications will be taken for a single property, and selections will be made on a “first-come, first-serve” basis. The properties will contain a deed restriction that states that the purchaser or any subsequent purchaser can have their property taken back by the city if they fail to follow through with their end of the deal.

The program will be run by nonprofit Neighborhood Assistance Corporation of America (NACA) in partnership with the city. NACA Newark can be reached at (973) 679-2601.

“This will be a national model where community residents can purchase a vacant residential home or lot for $1, and then renovate or build a beautiful affordable home,” NACA founder Bruce Marks said.

The initiative also establishes a program for homebuyer counseling, hopefully creating “well-informed owners with knowledge of how to successfully redevelop their properties,” city officials said. Participants will gain an understanding of homeownership, including the borrowing process, their housing needs, home maintenance and household budgeting.

The program will sunset after two years.

The council’s vote last week got a big thumbs-up from Newark Mayor Ras Baraka, who said the program is a key part of his administration’s plan to create more affordable housing in the city. Read More: When 'Affordable' Isn't Affordable: See Newark's Plan To Create More Housing

“Across America, LLCs are buying up owner-occupied homes and turning them into corporately owned expensive rental units,” Baraka said, referring to a recent bombshell report from Rutgers that suggested as many as half of all residential properties in the city are owned by corporations. Read More: Corporations Own Most Of Newark's Homes. New Laws Are Pushing Back

Only one in four Newarkers currently own their own home, the mayor’s office said.

“In Newark, where we work hard to expand homeownership, we have created a wide-ranging strategy to do everything possible to counter this dangerous trend,” Baraka said.

According to the mayor, other strategies include:

• Doubling the Live Newark Program to help residents become first-time homebuyers
• Implementing the Neighborhood Development Program, which turns city-owned land into residential and affordable housing
• Allocating a $20 million investment to create housing affordable to residents at a $34,000 income level
• Using Land Bank properties to create Section 8 homeownership opportunities

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