Metro Pulse/Urban Renewal

502 E. Scott Ave.
3,500 sq. ft.
5 bedrooms
3 baths

$249,000

Contact: Jon Brock
Realty Executives
531-2020
www.jonbrock.com

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by Matt Edens

All renovation projects boil down to one simple equation. It doesn't matter if it's the tiniest shotgun house or the Sterchi Building, if the cost of buying the place plus the amount of money it'll take to repair it adds up to more than the finished product is worth—well, you've got problems. And, while the equation itself is simple, there are a whole host of factors to make it complicated.

In a more "transitional" neighborhood like Parkridge, Mechanicsville, or Oakwood/Lincoln Park, fixer-uppers are cheap, but the price for the finished product is low. In Old North and Fourth and Gill, the finished products are commanding respectable prices, but the fixer-uppers (and believe me, they still exist in both neighborhoods) will cost more—in some cases approaching the cost of a restored house in a less established neighborhood.

Then there are the speculators. In Fort Sanders, the hope that some high-rise Volhalla developer will offer outrageous amounts of cash gets factored into the asking prices for properties there. (Thankfully, the NC-1 Conservation district has knocked that notion on the head—somewhat.) Downtown, some property owners are sure they're sitting on a gold mine—if only we could get our act together and build a planetarium, aquarium, terrarium, solarium—some kind of building that ends in -arium. To them, asking 800 grand for a building that's only a half step above a ruin counts as "supporting downtown redevelopment."

Luckily, there are some ways to work with this catch-22—tax abatement and low-interest bridge loans (as in the City's CityLife program for downtown residential) or Preservation Tax Credits (which can knock 20 percent off your renovation costs). But, as useful as these tools are, they're currently only for commercial or rental properties. For homeowners, the primary option is the same one pioneers have always used—whether in the western or urban frontiers—sweat it out, go into debt at the company store (Home Depot, in this case) and pray to God that someday your investment will pay off. Which explains why there aren't too many real pioneers out there.

But they do exist. And they often come up with some creative solutions to the redevelopment conundrum—like the owner of this house at 502 E. Scott in Old North Knoxville. His second home in the neighborhood, it's also the second one where he's used a highly successful approach to renovating a big, rundown house on a limited budget. When he purchased it, this 3,500 sq. ft. house—built in 1906—was a condemned wreck cut up into seven cramped apartments. Today its been brought entirely up to code, with its heart pine floors refinished and other features, like leaded glass windows, a built-in china cabinet, two fireplaces with mantles and the front porch's Corinthian columns all faithfully preserved. It even has a huge new deck out back and an above ground pool. And the primary reason why the homeowner was able to do all this was that he lives in only half of the place. Upstairs is a separate apartment that brings in approximately $900 a month in rental income—which made it financially viable to put this challenged, but charming, house back together.

There are other options too. Before putting it on the market, the owner considered turning the place into a bed and breakfast. And it still could be. Little-used in Knoxville currently, B&Bs have been a key revitalization strategy in other cities (Asheville has more than 20 B&Bs, many of them in the Montford Historic District adjacent to downtown). Whichever strategy you choose, they're good ways to deal with the economic catch-22 of neighborhood revitalization. Just ask the guy who owns this place—he's currently in the middle of renovating his third house in the neighborhood.