RECLAIMING Waverly Pilot program: Hefty tax credits are available to homebuyers in Waverly to stem the loss of residents from the neighborhood, home to Memorial Stadium.

August 04, 1996|By Robert Guy Matthews | Robert Guy Matthews,SUN STAFF

For 10 years, Jackie MacMillan's allegiance to her quaint Northeast Baltimore neighborhood of Better Waverly has been undying. The historic homes, the diverse residents and the friendly neighbors were all reasons to avoid the urge to move to the suburbs, she boasts.

But not enough homeowners around the neighborhood shared MacMillan's zeal. Residents in the Better Waverly and nearby Waverly communities have been moving out in droves lately. Left behind are vacant houses, renters unmotivated to keep the houses repaired and neglected properties.

To some, Waverly was yet another solid city neighborhood that had become worn and dog-eared, like the pages of an oft-read book. But the next chapter for this venerable, historic neighborhood is filled with the promise of stemming the downward slide through generous tax incentives for new homebuyers.

City officials launched a pilot program July 1 that allows anyone buying a personal residence in Waverly in the next three years to get a 40 percent discount on property taxes -- and a matching reduction in state income taxes. Savings could run into the thousands of dollars.

"I think it is a very great opportunity," said MacMillan, chairwoman of the housing committee for the Better Waverly Community Association. "I hope that it gives us a big boost and encourages people to buy in the neighborhood."

According to statistics from the Greater Board of Realtors, only 47 homes were sold in Waverly in 1995 -- an unusually low number, said Frank D. Boston, the organization's director of governmental relations.

"One of the reasons why Waverly was chosen [for the tax incentive program] was because the movement was stale and the houses weren't selling," Boston said. "There was a high concentration of available homes."

Many of the houses in the tax credit district -- bounded by Greenmount Avenue on the west, 31st and Montpelier streets on the south, Loch Raven Boulevard and Ellerslie Avenue on the east and McKewin Avenue to the north -- are rowhouses and traditional two-story Colonials.

The community includes the closed Eastern High School, which the Johns Hopkins University is redeveloping, and Memorial Stadium, which will be used by the Baltimore Ravens NFL team for two years.

The average house in Waverly sold for about $41,600 last year. There are roughly 1,000 houses in the area, with an owner-occupied rate of about 71 percent, according to the Board of Realtors. Most of the housing stock is older, built between 1850 and 1930.

The racial makeup of Waverly and Better Waverly closely mirrors the city ratio of 60 percent black and 40 percent white and other minorities. The community was chosen for the tax break in part because of its racial makeup, city officials said.

The program works like this:

Homebuyers who purchase a home between July 1, 1996, and June 30, 1999, are eligible to receive credits equal to 80 percent of the property taxes for the first five years, with a 5 percent reduction for each of the next five years.

The credit would be applied as follows: 40 percent of the city property tax paid would be credited to the next year's tax bill and another 40 percent, claimed as a tax credit, would be deducted from the homeowner's Maryland income tax, for the first five years. After that, the credits would drop 5 percent a year, to 35 percent, 30 percent, and so on until 10 years' occupancy is completed.

For example, a homeowner who bought a house with an assessed value of $32,000 and a tax bill of $1,872 would save $1,498 in the first year. Over five years, even allowing for some increase in the assessment, the savings would exceed $7,500 and, for the full 10-year period, $12,000.

Designed to draw new middle-income residents to the Waverly area, the program is open to both those who already own homes and to renters. But homeowners whose principal residence already is in the Waverly/Better Waverly neighborhood, or has been in the previous 12 months, are not eligible. Homebuyers cannot use grants or subsidies from government or a nonprofit agency.

If a buyer sells the property within three years, the new owner may apply for the tax credit for the full 10-year period. However, should the house be sold after the initial three years, the new purchaser would receive no tax credit.

The homebuyer will be required to complete an application, which will be reviewed by the Baltimore City Department of Finance, Collections Division.

The program is a demonstration project that will study the effectiveness of credits in attracting middle-income homebuyers over the three-year period and stabilizing the neighborhood.

The community competed with seven other city neighborhoods for the tax-incentive program. A neighborhood in Baltimore County, Greater Hillendale, also was chosen for the pilot program.

Seven-year Better Waverly resident Paula D. Branch sees her neighborhood ripe for change -- a glimmer of hope that was not there when she first moved in.

"Even when I moved in, I could see that some areas probably needed more homeownership," said Branch, who is co-chair of the Better Waverly Community Association. "We have about 40 percent rental and that is high."

Prospective homebuyers say buying a home in the community sometimes is problematic because of the high number of older houses. Many need to be rehabilitated -- and the tax credit may free up the funds for that.

"This money will help them," Branch said. "With the savings, they might look at it and say 'That's a great deal. I don't want to pass it up.' "

Who to contact

For more information and applications, contact the Department of Finance, Collections Division, Room 3, Municipal Building, 200 Holliday St., Baltimore, Md., 21202 or phone (410) 396-3971.

Pub Date: 8/04/96

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