Plan would let nonprofits buy, sell affordable housing

Aldermen debate housing program

March 03, 2006|By NIA-MALIKA HENDERSON | NIA-MALIKA HENDERSON,SUN REPORTER

An Annapolis city council member's proposal to allow nonprofit organizations to purchase homes or apartments set aside by developers for "work force housing" has spurred a debate over the best way to modify a new city program.

Alderwoman Classie Gillis Hoyle has said the amendment would make it easier for residents to ultimately buy homes and would keep moderately priced dwelling units, or MPDUs, on the market for a longer time.

"This is an opportunity for a teacher or police officer who might need some extra time to repair their credit or get money together," she said. "We don't want MPDUs to go back to management. Somebody has to buy from developers."

The measure, which will come up for a vote this month, would also expand eligibility to teachers in the Annapolis High School feeder system. The program is now open to qualified city residents and employees, as well as full-time teachers of schools in the city limits.

A city law passed in 2004 requires that developers of new subdivisions set aside 12 percent of units for work force housing. The aim was to expand the stock of housing available for teachers, police officers, city employees and others. At least 6 percent of new or rehabilitated rental units have to be set aside, under the city law.

The city's planning and zoning department may purchase homes designated for work force housing if they have been on the market for 90 days. Otherwise, they revert back to the developer and can be sold at market price.

Hoyle's amendment would allow nonprofit organizations - not just homebuyers - to buy from developers or from the zoning department, so they can sell or rent to an eligible person.

To be eligible to purchase a unit, applicants have to earn 80 percent or less of the median family income for the Baltimore area - which equals less than $40,450 a year for an individual - but more than $35,000.

Since September, when the application process began, 61 people have applied for the program. Of those, 32 were eligible, according to planning and zoning records. Among those denied, eight applicants did not work for or live in the city, and another eight were denied because of credit problems. Two applicants didn't earn enough.

The director of a church-affiliated nonprofit said that income and credit problems should not permanently eliminate interested homebuyers.

"So often it's an all-or-nothing arrangement," said the Rev. Johnny R. Calhoun of the Mt. Olive Community Development Corp. "There should be an alternative for those that just need more assistance. The emphasis is still on ownership, but it's a bridge to ownership."

Calhoun said he knows people in his congregation and in the community who do not feel they would meet the requirements but would like the opportunity. Amending the law to bring in nonprofits would "widen opportunity or at least the perception of opportunity," he said.

He said his organization would be interested in purchasing housing and making it available to residents.

"Even if they are not in an equal position, they will have equal access," he said. "We have to take a second look at MPDU legislation to build a bridge to home ownership."

Hoyle, a Ward 3 Democrat, said she proposed allowing nonprofits to buy the set-aside homes to help those with limited income and credit problems.

"This would be a go-between. The nonprofit would work with them, and then down the line they could possibly purchase the unit," she said. "Zoning would not allow it to be a profit-making opportunity."

Yet others voiced concern that the amendment would create another barrier to home ownership. Currently, 52 percent of residential properties in Annapolis are owner-occupied, according to city figures. The average price of homes sold in Annapolis in 2005 was $511,329, according to Market-Economics Inc. of Eastport.

"This ordinance doesn't increase the stock of affordable housing," said Dean L. Johnson, a former mayor who is now vice president of Arundel Habitat for Humanity. "Instead of new homeowners, nonprofits would be owners. It's creating a new landlord."

Johnson, whose nonprofit organization builds or renovates affordable homes for people with low incomes in exchange for sweat equity, also said the current program's income requirements for buying a home are too high. "Homeownership is still the objective," he said.

Johnson said that his organization has made homes available to residents with income below $35,000 and he questioned why the current program's income limits aren't lower.

Alderman Wayne M. Taylor, a Ward 4 Democrat, said he was concerned that the wording of the amendment could create permanent renters rather than encouraging home-ownership.

"I think the language is too loose," he said. "It leaves too much room, the wording should be `lease with option to buy.'"

Hoyle said that she planned to look at the wording of the amendment before it comes before the council.

nia.henderson@baltsun.com

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