Jefferson City to get out of real estate business
Updated On: Jul 31 2013 07:46:53 AM CDT
Jefferson City is trying to sell off it's remaining properties after a short time in the real estate business.
The city never actually made any money. Instead, the purpose was to lose money, all courtesy of the federal government.
About $440,000 of taxpayer dollars were given to the city via a grant from the Department of Housing and Urban Development.
The city used the money to purchase six properties. Two of the properties were donated to Habitat for Humanity.
Another two were remodeled, and the remaining two are still owned by the city.
The city bought one home for $53,000, invested $30,000, and sold it for $62,000. On that home, the city lost about $20,000.
Another home the city purchased for $57,000 required $60,000 worth of upgrades. That home sold for $60,000, meaning a loss of nearly $60,000 for the city.
When ABC 17 News asked the city why they were in the real estate business losing money, we were told the money is being used exactly for what the federal government intended it for: buying foreclosed homes that nobody else wants and making them viable again. By making the homes inhabitable, the city can then collect tax revenue.
The city said the program will eventually run out of money.
The federal government also put strict specifications on who the homes can be sold to. A family of four cannot make more than $65,000 to qualify as a buyer.
The program was part of President Obama's Housing and Economic Recovery Act.
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