Salvaged homes to land on 25 Southeast Raleigh lots

The City Council voted Tuesday to sell 25 city-owned lots in Southeast Raleigh to a nonprofit developer that rehabilitates houses slated for demolition.

The now-empty lots are located in a block off State Street that Southeast Raleigh leaders and city officials have targeted for redevelopment.

"You took out a lot of ugly multifamily units," said Daniel Coleman, chairman of the South Central Citizens Advisory Council. "It had become a haven for a lot of nefarious activities, so everybody's happy it's been cleaned out."

Under the agreement, the city will sell the lots to developer Builders of Hope for $28,160 each. Builders of Hope will relocate and rehabilitate single-family houses that have been donated to the nonprofit. All the homes will be sold to first-time home buyers, and 70 percent of the buyers must have low or moderate incomes.

The proposed subdivision will be similar to Barrington Village, a 24-home development off Poole Road that Builders of Hope completed in October.

Over the past several years, Raleigh has bought up adjacent properties on State Street and torn down the cinder-block rental apartments. Encouraging more home ownership in the area is part of the city's Garner Road Redevelopment Plan.

Turning the property into 25 single-family lots will require the city to subdivide the property, run water and sewer lines to each lot and build a cul-de-sac off State Street. Most of the cost of installing the infrastructure is being paid with money from federal grants.

Builders of Hope is financing the purchase of the lots through a zero interest loan it acquired through the city. Construction costs will be paid with private donations and bank financing.

Five lots that border Bragg and Coleman streets already have water and sewer service.

Nancy Murray, Builders of Hope's chief executive officer, said the nonprofit will start moving houses to those five lots at the end of January. The nonprofit has begun soliciting developers for the remaining lots.

The first houses are expected to be on the market by early spring, Murray said.

The recession has made it harder for people to get loans, but Murray said it has also increased the number of people who qualify for affordable housing. Builders of Hope has sold all but five of its houses in Barrington Village, she said.

Developers get tax credits for donating houses to nonprofit groups such as Builders of Hope instead of demolishing them.

Murray said donated homes often come with granite countertops, hardwood floors and custom cabinetry, amenities that Builders of Hope is able to keep as part of the house and offer to the new owners without charging extra.

Murray said her company is still able to find donated houses, even though the real estate downturn has reduced the number of houses slated for demolition each month in Raleigh by about two-thirds.