A Channel 2 investigation found DeKalb County spent nearly $900,000 to renovate homes that resold for hundreds of thousands of dollars less than that.
A top county official told Channel 2 investigative reporter Richard Belcher the program has helped a badly depressed neighborhood. But that same county official acknowledged DeKalb had hoped to spend less on those homes.
The money came from Washington D.C., part of the highly-publicized Neighborhood Stabilization Program, or NSP, that began with high hopes of helping the hardest hit communities.
One of those areas is East Lake Terrace in DeKalb County.
Scores of the 1,200 houses were abandoned or foreclosed by late 2008. Then, DeKalb County won $18 million in federal money under that program.
"(Did it make a difference?) Yes, it made a difference. (Did it save the neighborhood?) No," DeKalb County Community Development director Chris Morris told Belcher.
But Belcher found the county has repaired and resold just six homes in East Lake Terrace, but spent hundreds of thousands of dollars more than the houses brought in.
One house on Hillside Avenue sold for $74,900, but the county spent $163,000 to renovate it. That's 118 percent more than the sale price. Another house on Barberrie Lane sold for $89,900, but the county spent nearly $177,000 on it – 94 percent more than the sale price.
Altogether, DeKalb spent nearly $900,000 NSP dollars on six homes that sold for just $535,000. Total costs were 65 percent higher than the combined sales prices.
"I think they're spending too much per home," said real estate agent Margie Shine.
Shine has been selling homes in East Atlanta, East Lake and East Lake Terrace for 18 years. The county's math doesn't make sense to her.
"I do think they could be much more conservative on their rehab costs and do more houses," Shine said.
"Are these the numbers you wanted to see on a chart of the first six homes?" Belcher asked Morris.
"Oh, no, no, no. I really would have loved to have seen that the most that we invested in a property and couldn't get out would have been a few thousand dollars," Morris told Belcher
"But you're way beyond that?" Belcher asked. "Oh, yeah, we're way beyond that," Morris said.
That spending was already in the books by the time Chris Morris asked two developers for their opinions about the values in this neighborhood.
"There appears to be little or no demand for home prices above $50,000," a developer said.
Brenda Pace, a homeowner in the area since 1975, rejected the claim houses in her neighborhood average in the $50,000 range.
"Did the county raise expectations too high?" Belcher asked Pace. "Yes, they did. I think for everyone," Pace said.
Pace referred Belcher to a real estate agent who says 11 homes have sold for a hundred thousand dollars or more. Pace contends the county didn't spend enough in some instances.
"Why have all this money coming in and there's no major impact anywhere?" Paced said.
Chris Morris insisted the six houses alone have made a difference. "Had we not addressed those houses, the value wouldn't be where it is now," Morris told Belcher.
"Our property's values in this area are really going up," Pace said. "Isn't that a credit to the NSP program?" Belcher asked. "No, it's not. It's a credit to the market turning around," Pace said.
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