After Setbacks, Newark Alters a Program to Encourage Home Building


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Gilbert Gomez on the site of his future home on North 13th Street in Newark. He and his brothers bought the lot during a highly publicized land sale last year.

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Bryan Anselm for The New York Times

NEWARK — For the past week, on a block of North 13th Street just past the Morris & Essex Line tracks in this tumbledown city, the air has been full of diesel fuel and promise.

At 48 North 13th Street, or what is left of it, Gilbert Gomez directed his brother Leonardo, who sat behind the wheel of a roaring backhoe, scooping masses of sienna-colored earth into the air. Another brother, Geovany, gave the signal when the bucket was over the small dump truck they had rented to cart away the dirt as they dug a foundation for their new home.

“This is what we came here for, to build a better life,” Gilbert Gomez said, standing amid the discarded cups from Popeyes, plastic shopping bags and concrete chunks that littered the street.

The brothers, dreamers from Ecuador, were bundled against the near-freezing cold. They had ventured out in almost the same conditions a year ago to secure the 25-foot-by-100-foot lot when Newark held a highly publicized land sale on Valentine’s Day. Hundreds of couples — any pairing would do — lined up for a chance to buy one of 98 vacant lots for $1,000. The Gomezes, who already lived in the city and worked in construction, arrived around 2 a.m. and were already 48th in line.

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Left, a lot at 810 South 17th Street in Newark that was bought in the sale last year. Right, a vacant lot at 86 Ninth Avenue.

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Bryan Anselm for The New York Times

Now they are first.

While city officials initially thought construction would be underway on most homes at this point, the Gomez brothers are the only people in the program who have broken ground. For many, a deal that seemed too good to be true has turned out to be exactly that.

Newark remains undeterred, and on Sunday, it unveiled a new phase of the project in time for Cupid’s return: The city will now team up with about half the couples from the program to build a house for them, which they would then buy.

The new plan is intended to remove obstacles that have slowed the process, including designing a home, getting permits or, most challenging of all, finding a bank willing to provide not just a mortgage but a construction loan in one of the most depressed real estate markets in the country.

“We learned that people want this, they are hungry for it,” Baye Adofo-Wilson, the deputy mayor for economic and housing development, said at City Hall last week. “We just have to make sure they have the capacity to build a home, and if not, we will help them do the rest.”

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Ace Militar, center, who bought a vacant lot at the Valentine’s Day land sale in Newark last year. The city sold the lots for $1,000 each.

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Yana Paskova for The New York Times

While so-called urban homesteading programs are not uncommon, they typically involve buyers’ fixing up abandoned properties, not building new ones from scratch. With at least 2,000 vacant lots, Newark was eager to experiment.

Under the program, buyers are required to live in the homes for five years and will receive a five-year tax abatement. As they rebuild, properties would be knit back into the community.

But, even as the city continues to recover from the 1967 riots and the urban blight that followed, the challenges of the Valentine’s Day sale showed that innovation was not always enough to get the job done.

LaToya Davis, a nursing assistant from Irvington, N.J., believes that if not for a loan from the Department of Veterans Affairs, thanks to her husband’s service in the United States Army, they could not afford to build a house in the Weequahic neighborhood of Newark. “Everything in life is a gamble, so you have to take your chances,” she said.

It does not help that some homes surrounding the lots were not in the best shape. One of the two next to the Gomezes’ lot has been abandoned for years.

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The Gomez brothers, from left, Leonardo, Gilbert and Geovany, at their lot last week.

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Bryan Anselm for The New York Times

Twenty-one Valentine’s buyers returned their lots within a month or two, including Annette Newton, who lives in neighboring East Orange and was 113th in line on the day of the sale.

“It was one of the last lots available, and the location turned out to be pretty run-down,” Ms. Newton said. “I still thinks it’s great what they’re doing.”

Those who moved forward were less frustrated with the city than with the banks that all but ignored their inquiries — sometimes with good reason.

The average Newark home sold for $150,000 in 2015, an 18 percent increase from three years earlier, but less than half the price fetched in 2006, according to RealtyTrac, an online real estate data firm. And foreclosures are on the rise, reaching 2,469, or one in 47 homes, last year, a level not seen since 2010.

Most couples have been expecting to spend between $250,000 and $350,000 to build their homes.

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Bern Woods, left, and Christina Coaker on their lot at 51 Gray Street. The couple have tried every major bank and are now turning to a private one for the two-family, loft-style home they plan to build.

Credit
Bryan Anselm for The New York Times

“The good thing is, the city didn’t just do this for all the hoopla, and then forgot about these people,” said Arnold Cohen, senior policy coordinator for the Housing and Community Development Network of New Jersey. “They are in it for the long haul, to solve these problems.”

Besides the Gomezes, four couples have closed on their properties and are finishing their financing. An additional 18 had their permits approved but have been unable so far to secure construction loans. Despite her connections as a real estate agent, Christina Coaker and her fiancée, Bern Woods, have tried every major bank and are now turning to a private one for the two-family, loft-style home they plan to build in the North Ward.

“We drive by pretty regularly, so it’s fresh in our mind and we don’t give up on it,” Ms. Coaker, who lives with Ms. Woods in a condominium in Jersey City, said.

Some homesteaders have been delayed by circumstances. Jacqueline Machado was six months pregnant when she joined her husband in line. The birth of their twins made the Brazilian couple, who live in the Ironbound neighborhood, wait until this year to begin planning. John Errico, a start-up founder, and his wife, Shannon Guy, a lawyer, had already renovated two homes in Union City, N.J. But when his father, who lives in Florida, found out he had cancer, it caused a re-evaluation.

“It was a little difficult to justify a $300,000-plus expenditure on a new home when pre-existing homes in the area on similar lots can be had for less than $100,000,” Mr. Errico said.

That is a reason Mr. Adofo-Wilson is now urging people to consider building more affordable single-family homes that can cost as little as $179,000 with the city’s help (most participants prefer two-family homes for the rental income). The Newark Community Economic Development Corporation hopes the remaining 54 couples who have made little progress will work with its selected contractors to begin building.

While the homes may not be there yet, the real goal — getting more people to want to live in Newark — may have succeeded.

“Since we’ve done this, we’ve had people in here every day asking for lots,” Mr. Adofo-Wilson said. “I think if we had another Valentine’s Day sale this Sunday, we’d have had another 400 or 500 people out there. Whatever kinks we had in the system, we’ll get rid of them, and then maybe we can do it again next year.”



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