HUD has initiated foreclosure proceedings against the current owners, according to the department of housing, and officials from the federal department hope to begin disposing of the properties in August, city officials say. The city is looking for developers with rehab, affordable housing and property management experience. Besides putting the properties into the hands of several new owners, the department of housing envisions some of the one- to four-unit properties converted to owner-occupied units.

"It is our belief that this development, as a single entity, is too large and needs to be divided into smaller units so it can be more effectively managed and that is what we hope to achieve with this development plan," says housing commissioner John G. Markowski. "By acting now, the City will identify who its partners will be as a strategy is worked out to preserve this as affordable housing."

The 1,240-unit Lawndale Restoration was built in five phases, with a mix of properties ranging from two- to four-flats up to corner multifamily buildings. HUD provides project-based Housing Choice Voucher assistance to tenants. The 96 buildings are scattered in an area bounded by Madison and 19th streets, Kostner and Albany avenues. Inspections done by HUD earlier this year estimate the cost of repairs at $44.8 million, which breaks down to $44,333 per unit and $36 per sf. As a result, department of housing officials expect to sell properties for $1 each.

The 57-unit Douglas Lawndale development is spread over seven properties ranging from three-flats to a 21-unit building.