East Baltimore residents call for more affordable housing

Group urges City Council panel to ensure action is taken related to Hopkins project

October 12, 2007|By John Fritze | John Fritze,SUN REPORTER

A group of East Baltimore residents asked a City Council committee yesterday to ensure that officials are making affordable housing a priority as part of the 88-acre redevelopment project taking place near Johns Hopkins Hospital.

The council is considering a series of bills that would allow East Baltimore Development Inc., the nonprofit organization created by the city to manage the project, to borrow $85 million to begin the second phase of development -- which will include a school, new housing and the renovation of existing rowhouses.

More than a dozen residents turned out to the meeting of the council's taxation and finance committee to discuss their concerns and to urge the city to keep residents in mind as they move forward.

"The residents of East Baltimore have been promised many things over the last few decades," said Leslie Lewis, 41, a lifelong resident of the area who will be relocated for the construction. "There have been other projects that have come through and yet they have all failed. I just wanted to let you see the faces that go along with this bill. ...We deserve to be treated with respect."

EBDI officials say residents have been offered $150,000, on average, to relocate. Those residents are also given priority to move back into the neighborhood once developments are completed. About 300 families will be affected in the second phase.

Low-income residents who wish to move back into the neighborhood and buy a home must use their relocation stipend and then will be eligible for a mortgage in which the monthly payments would not exceed 30 percent of their income.

Second loan

The difference between the two sources of money and the price of the home would be covered by a second loan that would not be paid back until the new owner sells.

If the resident decides to sell, then the principal of the second loan would be paid back along with a portion of the profit from the sale.

"Residents' lives have been on hold for at least the past few years," said Jack Shannon, president and chief executive officer of EBDI, referring to the residents in the second phase of the development who have been waiting to find out whether they will be relocated and when. "We need to move forward now."

Some who spoke at the meeting are members of the Save Middle East Action Committee, a group that represents many of the residents. A spokesman said the affordable housing loans should be structured so that residents will pay a smaller amount -- closer to 15 percent -- of their income, rather than the 30 percent being proposed.

Some said they are concerned that many of those who return will be relegated to refurbished homes, or rentals, rather than more desirable units. In all, 1,160 new housing units will be built in the second phase, and about 700 of them will be offered to homebuyers, EBDI officials said.

`Many difficulties'

"We just want justice to prevail," said Donald Gresham, president of the Save Middle East group. "These people have gone through so many difficulties. It doesn't really work with the community. We've got to tell them that it's not working."

The package of legislation working its way through the council will create a tax-increment financing district that will be used to pay back the loan. In tax-increment financing, cities borrow money to pay for construction and pay the loan back with the increased value that the completed project adds to the tax base.

A large hotel built on a vacant lot, for instance, increases that property's value for tax purposes, which brings more money into government coffers. The additional money would be used to pay the loan.

In this case, the money would be used to acquire and demolish homes, to pay for relocation and for the school. EBDI officials have said that private investors will pay for housing and other buildings -- though those developers will receive a number of tax incentives.

In addition to housing, the $1.8 billion project includes a nearly 2 million-square-foot privately owned life sciences park, which will be rented by Johns Hopkins and other institutions. The project also includes a senior center, the school and retail space.

john.fritze@baltsun.com

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