Operation Neighborhood Recovery, a demonstration project to repurpose foreclosed homes, has brought 47 properties (93 units) located mainly in urban Essex County, New Jersey back to productive reuse.

An increase in the number of vacant properties in HANDS’ target neighborhoods signaled the fallout of the sub-prime foreclosure crisis and the 2009 economic downturn. HANDS discovered one lender associated with a large real estate fraud and subsequent bankruptcy on 47 troubled houses and decided to act; Operation Neighborhood Recovery was born.

The goal of Operation Neighborhood Recovery was to return a healthy market to these neighborhoods through an innovative collaborative strategy to minimize the effects of the foreclosure crisis on streets where vacant foreclosed homes threaten neighborhood quality of life, drive down property values and accelerate decline.

HANDS purchased 47 mortgages on 47 of these troubled vacant properties and immediately cleaned up the properties while beginning to clear titles. HANDS assembled a team of community development corporations and private investors to take over the properties and redevelop them. Of the 47, what happened?

By intervening in vulnerable neighborhoods of greater Essex County, HANDS and its partners minimized the destabilizing influence of foreclosed properties. Doing so set in motion a movement to stabilize the market and preserve eight neighborhoods in metro Newark, NJ, the first step to redeveloping 700 properties over the next seven years.

Operation Neighborhood Recovery led to the creation of a separate entity that owns the mission of purchasing defaulted mortgages through bulk purchase throughout New Jersey and conveying the properties to responsible redevelopers who will quickly return them to productive re-use.