Abell to offer guarantee on home values Patterson Park owners eligible for reimbursement

'A powerful incentive'

Program aims to bring stability to neighborhood

October 15, 1998|By Amy Oakes | Amy Oakes,SUN STAFF

Baltimore's Abell Foundation is making current and would-be Patterson Park homeowners an offer they might find hard to refuse. Starting in January, house buyers and owners will be able to enroll in a unique program that guarantees their property values will not decrease.

Abell Foundation and community officials are banking on such an offer, found in only a handful of neighborhoods nationwide, to bolster area home sales and property values, which have slipped slightly in recent years. They were to announce the initiative today.

"This program is meant to keep people from moving out and give some stability to the community," said Ed Rutkowski, executive director of Patterson Park Community Development Corp. (PPCDC), which is running the program.

Existing homeowners and those who buy a home in the area -- bounded by Patterson Park Avenue, Fayette Street, Pulaski Highway, Haven Street and Eastern Avenue -- would be eligible. The program ensures that if the participant sells the home for less than the appraised value at time of enrollment, the foundation would reimburse the difference, as long as the selling price is reasonable. Rutkowski said the average appraisal for the area's roughly 5,000 homes is $50,000.

Homeowners must agree to live in the house for at least five years, pay an annual fee of about $150 and contract for an appraisal. Other stipulations and details of the program, such as the reimbursement process, are being worked out, Rutkowski said.

Daniel P. Henson III, executive director of Baltimore's housing administration, said the program complements other residential initiatives in the city.

He said a home value guarantee, which has never been used in the city, addresses one of the perception concerns for most homebuyers: the security of their property value.

"The program takes away one of the reasons people give for not seeing East Baltimore as a place to live," Henson said. City officials would monitor the program, Henson said, and might implement it.

Abell Foundation President Robert C. Embry Jr. said the foundation created the program in Patterson Park because of its past work with the community. The number of people who enroll and seek reimbursement would determine how much the foundation spends on the program. "There's a good chance it won't cost us anything, and the neighborhood will strengthen," he said.

Cathy Werner, a broker for the Re/Max American Dream Realtors on Belair Road, said programs to entice buyers are good for the city. If the program is explained clearly, she said, many homeowners and first-time buyers would likely be interested.

"I definitely think it will help that area," Werner said. "It's a great location with the businesses around and being close to downtown."

Rutkowski said the foundation conducted preliminary surveys to gauge community support, and his group would attend neighbor- hood meetings and churches to discuss the program.

L. Trent Brown III, 33, who has lived on the first block of N. Linwood Ave. for more than a year, said he plans to enroll. Brown said he thinks the program would improve the quality of the neighborhood because it would keep and bring families there.

"With the home value guarantee, more individuals with higher incomes will move into the area and fix up the houses," Brown said.

Rutkowski said the program would be a success if 150 homeowners enroll during its first year.

Similar programs the foundation studied in the Chicago area have worked well, said Beth Harber, the foundation's program officer for economic development. In four communities, where 8,400 have enrolled in equity assurance programs since 1977, there have been five claims.

"Each of these programs found that as they've gotten more people into the program, there's been a decrease in the number of people leaving the neighborhood," Harber said.

The Abell Foundation, a private organization established in 1953 to improve the quality of life in Maryland through grants, has been involved in the Patterson Park area for three years. Foundation grants have helped the PPCDC purchase and renovate area houses and provide homebuyers free tuition at local private schools. The corporation has contracts on 62 homes, Rutkowski said.

"The programs combined offer a powerful incentive to buy, or to continue to live, in the Patterson area," he said.

Pub Date: 10/15/98

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