Last week I shared a story about a REIT that was formed by nonprofit organizations with the express intent of pooling their resources and experience to tackle and ensure affordable housing throughout the country. An interesting parallel emerged after I read the Indy Star over the weekend. Jeff Swiatek, writes an excellent about a company out of San Diego that has bought more than 300 single family homes in Indianapolis’ urban core. Mt. Helix Real Estate Investment Trust and its bevy of private investors have spent a significant amount of private dollars acquiring and renovating these homes and putting them back on the tax role as rentals. While their business plan is very different than Housing Partnership Equity Trust, they are trying to move the needle on quality, affordable housing, and are using Indianapolis as a case study.

Indianapolis, which ranked among the top five cities in the country for the percentage of its foreclosed houses that were vacant, has an abandoned property problem. There are more than 7,800 homes in foreclosure in Indianapolis, with nearly 2,500 of them vacant. As Swiatek reports, The city’s land bank of unwanted homes contains over 600 properties and its annual sale of tax-delinquent properties has ranged from 2,000 to more than 4,000 in recent years, with many of those being vacant houses. More than 1,000 homes have been razed by the city in the past three years. The city and the privately run Land Bank of Indianapolis are working hard to address these properties but it’s not a simple process.

While I commend Mt. Helix for taking a chance on Indianapolis to rehab these properties and provide high quality homes for an under-served demographic of people, I worry about what will happen a few years down the road if the return on investment does not meet the goals set by the investors. This groups sees Indianapolis as a market that it can make It would be a shame to see the cycle of abandoned properties repeat itself, in neighborhoods where it would be catastrophic.