Nov. 12 2008 12:00 AM

The city has $6 million in federal funds available to help steer it through the housing crisis. What will that money do?

Imagine waking up one spring morning and seeing the vacant house down the block buzzing with activity: Roofers carrying shingles up ladders, the sound of nail-guns and belt sanders drifting out onto the street. Imagine the activity is contagious: Suddenly the chipping paint on your front door or the broken window in the garage soar to the top of your “to-do” list. Imagine none of your neighbors want to own the shabbiest house on the block. Imagine it happens all across Lansing.

That’s the vision behind the proposed plan for nearly $6 million in federal funds available to the city. Mayor Virg Bernero said neighbors “will see some of those (empty homes) being worked on instead of sitting still. Hopefully that means more houses will be attended to. It’s a start.”

The national foreclosure crisis has hit Michigan, and Lansing, hard. Subprime lending, house flipping and Michigan’s economic downturn led to a rash of foreclosures and vacant homes across the city. But with the federal dollars Lansing can begin steering itself — one neighborhood at a time — back on a course toward stability.

The $6 million, of course, is not nearly enough to solve Lansing’s piece of the housing crisis, officials warned at Monday’s press conference, but it’s something.

The funds are part of a federal pot of $3.9 billion set aside for the Neighborhood Stabilization Program. In an interview Friday, after the department of Neighborhood Development and Planning posted the proposed plan on the city’s Web site, development manager Dorothy Boone said the funds would allow the department to augment the work it’s already doing.

“It means more people can be involved in buying homes,” Boone said.

That’s good news for Lansing.

Eight neighborhoods — Baker-Donora, Comstock, Oak Park, Urban Dale, Prudden East Village, Vision 2020 (in west Lansing), Potter Walsh and Southwest Lansing — have been targeted to receive the funds. The goal is to stabilize the housing market by funding the city to buy foreclosed homes and redevelop them before they become blighted or havens for crime.

“There just isn’t a silver bullet to this problem, so we are using a multitude of strategies to tackle it,” Boone said.

One of those strategies is demolition. Budgeted in the proposed plan is $300,000 to demolish 50 homes, with the first wrecking balls set to fly in the city’s 100-year flood plain in the Baker-Donora and Urbandale neighborhoods — the city was recently approved for a Federal Emergency Management Agency grant that would allow it to buy homes in the flood plain and tear them down to create park land. Other neighborhoods would see homes demolished that are beyond repair and have the potential to become hot spots for trouble.

Nigel Griswold is an academic and outreach specialist with Michigan State University’s Land Policy Institute. His study, co-authored with Patricia Norris, linking property values to land banks in Genesee County was referenced in the city’s stabilization plan.

Griswold said demolishing blighted homes is an important component to urban revitalization. “Abandoned houses devalue surrounding homes more than an empty lot” next to a home, he said in an interview. What the city can accomplish with targeted demolitions is actually measureable, he added. “If you demolish really bad housing, it hedges against a loss of value in your good housing stock.” Using selective demolition to minimize potential property value losses in communities like Lansing can help stabilize the market.

The Greater Lansing Housing Coalition, in a public-private partnership, would take the lead on turning the library of the former Michigan School for the Blind at the corner of Maple and Pine streets into a “neighborhood empowerment center.” the neighborhood empowerment center Lynne Martinez, the organization’s executive director, said the benefits would be immediate.

“We hope to create three classrooms for Head Start, a valuable program that provides early childhood education, parent education and family support,” she said in an interview Monday. The neighborhood center will also boast a multitude of nonprofit and government agencies offering housing education programs to create a “one-stop shop” for home purchasing, home repair and foreclosure programs.

“These services will be an asset to people throughout the community,” Martinez added.

Some money will be used to bring stability to those affected by foreclosures. Joan Jackson Johnson, vice-chairwoman of the Lansing-based nonprofit One Church One Family, and the city’s human services director, said her organization would partner with the city to provide housing to homeless families. Johnson’s group will focus on larger families who are “bouncing from shelter to shelter,” some of whom have lost their homes after their rental homes were foreclosed upon.

The plan proposes creating 15 permanent supportive housing units where the chronically displaced and those at risk of becoming homeless can live in quality homes at affordable rents. There will also be various services available to these residents to keep them from falling back into homelessness.

After a period of public comment, including two neighborhood forums scheduled for Nov. 17 and 18, the plan will go to the City Council for a vote. With Council’s approval, the plan will be forwarded to the federal Housing and Urban Development Department for final approval.

But don’t jump in line just yet. Boone says the outreach for the program will most likely occur through local Realtors, meaning those folks already looking for homes who are eligible for the program will get first crack at the assistance.