Waterbury Real Estate - The View from the Edge
11/09/2007

A Column By Bob DeCosmo

The Real Estate Slowdown has hit Waterbury hard with a one, two combination punch according to many local real estate brokers. Not only are home sales very slow, apartment rentals have tailed off significantly lately! This is probably due to the large amount of foreclosures that are currently in the pipeline.

Banks historically do not establish a rental relationship with tenants who live in buildings they foreclose upon due to risk factors. Therefore tenants who would normally be seeking apartments are getting a rare holiday treat this year, they are living rent-free for the moment. When and if the banks finally complete their foreclosures, these tenants will be offered “Cash for keys” and can voluntarily vacate their apartments or the bank will evict them for “Lapse of time, or no right to occupy the premises.”

The banks have moved rather slowly with their foreclosures mostly due to the fact that once the properties are listed for sale, they will have to recognize the huge losses they will be taking on their loans. This could force the bank auditors to require the lenders to set up larger loan loss reserve accounts to guard against future foreclosures and this will deplete the banks ability to extend credit to existing and new customers. If this scenario plays out further, we are looking at a devastating repeat of the real estate market collapse in the late 1980’s.

The Waterbury Development Story from last month generated several phone calls and many have echoed their frustration to me with the agency as the story pointed out. However recent personal changes have occurred there and have created a positive feeling around the city concerning the WDC. Mr. Leo Frank was brought in as the interim director for the agency and he has a wealth of knowledge on local issues and years of banking experience to back him up. He has served on several local boards and brings a fresh viewpoint to the agency and is receiving good compliments from local folks I have spoken with.

Along with Mr. Frank, another experienced addition was made recently; Kevin Taylor has been hired on and is working in WDC’s project management group and neighborhood re-investment division. Kevin was actively involved in the Main Street Waterbury’s economic restructuring committee and has a lot of good ideas and energy. It is nice to see local individuals being brought onboard in key positions at WDC who can move this community ahead.

The Duggan School Project slated for redevelopment in the Brooklyn section of Waterbury also generated a big response from my last article. The current plan leaving two large 16-unit apartment buildings standing on the corner of Bank Street and West Porter is not making any sense to local residents and several community leaders. State Representative David Alderando has offered to look into additional funding for the project to enable the development to proceed with acquiring these structures and making a complete encirclement around the block and not the current land carve out as proposed.

Neighborhood president Lisa Velez repeated her desire to also take these buildings as part of the school project. Her group, the Brooklyn Neighborhood Association went in front of the School Board and stated their desire to include these building in the city’s eminent domain process, they where told that there was not enough money in the project budget to include these properties, that is a true shame! I just cannot believe that 1.5 million or so of federal or state money can’t be found to do this project the right way. The government wastes billions of dollars annually on so many bad projects and programs; here is one that will be a huge asset to the community.

I often sit and look at this site and just shake my head in the lack of understanding here with leaving these two properties standing next to a new grammar school. Drug dealing is open and rampant on that street corner and building a new school will not deter these drug sales. It was pointed out to me that when the new school goes up, the corner will be within 1500 feet of a school or public housing authority site and will call for stiffer penalties for anyone arrested for drug dealing. Sorry, the site is already within that distance to Barnyard school, the Porter Street Apartments and the Begg Apartments so it already qualifies for the stiffer penalties. Let’s get this one right, drive by and tell me that the neighborhood would not be better off with the school taking these two structures as part of the project, there is still some time left, but not much!

The Waterbury Mayors Debate on October 23rd at the Greek Orthodox Church concerning housing issues was a really good event. The turnout was near 100 folks and the candidates felt at ease with the crowd and many of their comments where laced with a bit of humor. Having known all three candidates for over 10 years it was good to see them sitting side by side and sharing some light moments that evening. Waterbury has obstacles to overcome and our housing market can be both an asset or burden as property taxes that help fund the city’s operations need to come from a strong commercial component and Waterbury needs economic development for a strong future. The Property Owners Association of Waterbury looks forward to helping shape a course of action to better help the newly elected administration with meeting this housing challenge.

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