SAN BERNARDINO, Calif.-- Earl Houser has had a gaping hole in the ceiling of his kitchen for three years.
Ever since a mess of wood and plaster collapsed from above into the sink, he's used trash bags, affixed to the ceiling with duct tape, to keep out rainwater.
Yet years of water damage have buckled and yellowed the walls in the kitchen and spread moisture into the adjoining bedroom, which gives off an odor of mildew from water that has soaked his white shag carpet.
"I had to do like the cartoon guys and put lots of buckets out to catch the drips," Houser said. "I was going to get it repaired but my financial situation got bad, unemployment came in, and then I became an unemployed old man."
This year, Houser's home will be getting much-needed repairs thanks to Imran Farooq, a graduate student at the University of Southern California. For his doctoral dissertation, Farooq has developed what he hopes will be a model for how neighborhoods decimated by foreclosures can be restored with maximum benefit and minimal cost using private incentives, as well as existing non-profit and government programs.
Rather than improving homes in isolation, Farooq's project, "Sustaining our Society," seeks to rehabilitate an entire block by helping homeowners to concurrently refurbish their houses in coordination with companies buying, improving and selling foreclosed properties in the neighborhood.
The collaboration helps align the interests of residents and investors, as both work to fill empty homes, raise property values, and keep out the squatters that bring drugs, violence, and other undesirable elements in their community.
As the site for his research, Farooq chose Trenton Street in San Bernardino's Sixth Ward, an area that suffered an epidemic of foreclosures over the past several years and has been one of the hardest-hit markets in California. Last year, there were more foreclosures in California than any other state and, with one in every 195 homes receiving notice of foreclosure, the Golden State had the fourth-highest foreclosure rate in the country. San Bernardino, which saw home prices surge over 167% between 2000 and 2005, has been at the epicenter of the housing crisis. In June of 2008, the county's foreclosure rate was more than five times the national average.
Trenton Street, where Houser lives, looks like any other neighborhood in the Sixth Ward. Some two-dozen ranch houses in alternating shades of beige, brown and blue line the block, which, on a recent Saturday morning, pulsed with loud rap music, pierced occasionally by a baby's wails. RVs are parked on many lawns. At least one home stands abandoned. Squatters, who neighbors say are dealing drugs, have taken up residence in another empty property.
But already, in the three months since Farooq's efforts began, there are signs of change.
A foreclosed property purchased by local real estate investor DCI Investments has been completely refurbished, the once-blighted lot that stood empty for months now gleaming with green grass, newly-installed double-pane windows and a fresh coat of paint.
Farooq worked with the investor to ensure the property's restoration would bring the greatest possible benefit to the environment and to the unemployed in San Bernardino. The home was made energy efficient -- a feature that makes the house more marketable and could save future homeowners money -- and only local workers were hired for the project. A Riverside-based company even donated solar panels that will be installed by unemployed veterans who received green jobs training from the county. The San Bernardino NAACP will also help plant a produce garden in the back yard.
Though non-profits and government agencies are a crucial part of the process, providing funding, training and other resources, Farooq stressed the need to engage private companies and provide them with a roadmap for how they can mitigate the negative effects of the housing crisis.
"My goal is to create a model of neighborhood rehabilitation, anchored around private partnerships that can be used to stabilize neighborhoods affected by foreclosures," he said. "Until we have market-based solutions to issues like poverty, they will always be present. With the rising housing and unemployment crisis, unless we find a way for [the solutions] to be market based, the environment will not improve."
Yet persuading a local investor like DCI Investments to add energy efficient features and source local labor is a far cry from convincing the banks, hedge funds and institutional investors that own many foreclosed properties in San Bernardino to do the same. Most of these investors, located hundreds if not thousands of miles away from the affected communities, are not currently interested in selling the properties, much less in rehabilitating them. Rather, they prefer to hold the homes until the market recovers and are content to let the properties stand empty and unattended.
Recognizing that improving a single property would not alone change the condition of the street as a whole, Imran also went door-to-door encouraging residents to apply for local, state and federal grants that provide weatherization and beautification to low-income families.
Nine homeowners, including Houser, are currently in the process of applying for the programs, which were unknown to some and thought to be scams by others prior to Farooq's efforts.
They predict more of their neighbors will sign up once they see other people's houses being repaired.
"People here, they've got to see something going on before they get going," said Santiago Flores, who will be receiving a $10,000 grant from Neighborhood Housing Services to repair his roof. "Wait till they see one house fixed up, then everyone's going to want to do the same thing. People are competitive. They want their houses to look nice and everything, too."
Farooq's hypothesis is that the concentrated efforts of Trenton Street residents and investors will help reverse the downward slump of home prices. To track the effect of his work, he received an appraisal for Trenton Street property values in January 2011, before his efforts began, and will be receiving a second appraisal this summer once the rehabilitation has been completed.
The residents say that fixing up their properties will not only raise the value of their homes, but also discourage owners from renting to undesirable tenants and decrease the number of empty units, which will in turn improve the appearance, safety, quality and desirability of the block.
"When you've got run down homes, you bring in run down people," said Houser. "You know when you clean up a neighborhood, filth leaves, because then the neighbors become more aware that this is our neighborhood, we can't let this come in. It really gives people some goals."
The beautification and restoration of the homes, many of which are over 50 years old, has less quantifiable effects on Trenton Street, as well. Several homeowners said that rehabilitation program has already encouraged families to become more invested in the well-being of the neighborhood, calling the police to report suspicious activity when before they would have turned a blind eye. Through a community meeting that Farooq organized, two families that had both lived on Trenton Street for over 30 years met for the first time.
"They've given us a lot of hope and I believe they're bringing the street together as a community. Before people were all shut up in their houses, but now neighbors are talking about this program," Houser explained.
He added, on a more personal note, that the home improvement efforts give people more pride and more confidence.
"When you've got a leaky roof, like a lot of homes do on this street, you don't know what that does to a person," he explained. "It's embarrassing when you cant fix up your own home and you got to put tarps on the outside to keep the rain from coming in. It's not the way you should live. If you've got a home, it should be your home, it should be the way you want it."
While Farooq's plan holds promise and has already brought improvements to one California neighborhood, challenges remain in sustaining his initiative and bringing it to blighted blocks beyond San Bernardino. Though the building blocks of Farooq's model - -such as the federal grants to homeowners -- are available to other communities, currently, there are no concrete plans to export the initiative. Still, Farooq said he hopes others will take note of how he has coordinated a company and community, then take up similar efforts in their neighborhoods.
"If no one can replicate this, to me it's not effective," he said.