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Mayor Jerry Sanders announced today the city of San Diego’s piece of a $4 billion federal grant package for combating blight in neighborhoods impacted by foreclosure.

The city will receive $9.4 million as part of the Housing and Economic Recovery Act of 2008, passed in July.

“As we are all painfully aware, the San Diego region, like the rest of California and much of the nation, has been hit hard by the mortgage crisis,” Sanders said this morning at a press conference outside of a foreclosed home in Encanto.

The money can be used to:

  • Fix up or repair homes that have been repossessed and abandoned.
  • Expand code enforcement.
  • Demolish or remove abandoned properties.
  • Buy or rehab homes to sell, rent or redevelop.

Sanders made it clear he doesn’t think government needs to be in the business of buying houses. He said he thinks the money can go further by boosting financing programs like the ones the Housing Commission offers, including assistance with down-payments and rehabilitation.

I asked Sanders how this money fits with the land bank plan that is planned to be a partnership with government, private and philanthropic funds to purchase blighted homes and rehab them in some of the region’s worst-hit communities. That plan has been gaining traction at the City-County Reinvestment Task Force, the region’s committee tasked with incentivizing investment in depressed neighborhoods. Proponents of the land bank have been anticipating these federal funds as a potential boost to their efforts.

“That’s just one of the ideas out there,” Sanders said of the house-purchase part of the land bank plan. “Nine million dollars in the city of San Diego isn’t going to land bank much. We’re going to be looking at the full impact of this before we start buying houses.”

Under the grant program, Chula Vista received $2.8 million and the county received $5.1 million. The agencies will file applications to the federal Housing and Urban Development Department by Dec. 1. San Diego officials hope to be using the money by early spring 2009.

KELLY BENNETT

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