Published February 18, 2019
By Jeff Edelstein

A zip code in Trenton has the most homes underwater, percentage-wise, in the nation. This, according to Attom Data Solutions, the self-styled “curator of the nation’s premier property database.” According to their numbers, 70.3 percent of homes in the 08611 zip code are “seriously underwater,” meaning what’s owed on the houses are is more than the houses themselves are worth.

As you might imagine, this is an issue. Many of these homes end up either in foreclosure or abandoned, and it creates all manner of problems, not the least of which is the domino effect. The more homes abandoned or foreclosed, the harder it is to maintain the value of your home.

And of all the issues Trenton has to deal with, this one might be the most important. It’s like the bottom of the pyramid. Without a thriving home ownership ecosystem, it’s tough, bordering on impossible, for anything else to fall into place.

“A lot of our housing stock is either in foreclosure or abandoned,” said Trenton Mayor Reed Gusciora. “A lot of it stems back to when the Roebling factories closed, state government buildings that moved to suburbs. A whole history of exodus. And that’s why when I ran, I ran on a ‘1,000 homes in a 1,000 days’ because if we’re going to prosper we’re going to need more people and we’re going to need people to take over these abandoned houses.”

Thankfully, things are starting to change.

Gusciora told me he’s on track to hit the 1,000 homes in 1,000 days promise, and the city has also made moves to force — or gently glide — the hands of owners of abandoned homes.

”We’ve increased the vacant property registration,” he told me. “By increasing the vacant property ordinance fees, we’re trying to encourage owners of these properties to either give them up or rehab them.”

A lot of these properties are owned by the banks, and due to prime mortgage interest insurance, they get paid. Bumping the vacant property fees - in some cases from $250 to $1,500 - starts to take some of the profit motive away.

Additionally, the city has been working with the Housing and Community Development Network of New Jersey to come up with even more ways to shake owners out of their abandoned homes.

“One of the things city is looking to do, and we’re happy to help, is adopt an abandoned property ordinance which allows the city, if it chooses, additional powers to address the state of abandonment and if the owner chooses to not maintain the property, it would give the city the right to take that property by eminent domain,” said Staci Berger, the group’s president and CEO. “The city then could turn that over to non-profit developer for a $1, and the non-profit could rehab it and put a family who wants to live there in it. That’s one tool the city could use.”

But she said they might not need to if the state steps in, as there is a package of bills is floating around that would help places like Trenton get out from under the foreclosure and abandoned mess. Berger said the previous administration, under former Gov. Chris Christie, did nothing to help the situation.

“Programs that were enacted under his Department of Community Affairs were marked by … ‘ineffectiveness’ is the nicest thing I can say,” Berger said. “They basically made it impossible for people to keep their homes. They spent money on projects that were ill-advised and proven to be unsuccessful despite every advocate’s efforts to get the Christie administration to spend that money in a way that we know will keep people in their homes.”

And in the end, keeping people in their homes is a win for all involved. The family gets to stay, the bank continues to get paid, the neighborhoods continue to thrive.

“If you have more stable properties, if you have more folks paying their property taxes, you have higher demand for goods and services, so you create small businesses that meet those needs,” Berger said. “You have a stronger local economy because the local housing market is successful”

See? Pyramid.