City presses for Westport housing

Goal is affordable homes, but critics see room for more

Sun exclusive

August 04, 2008|By John Fritze | John Fritze,Sun reporter

More than a year after Baltimore passed a law intended to keep housing affordable for working-class families, City Hall is testing the limits of its newfound power on a prominent stretch of waterfront property.

Relying in part on the new law, the city is negotiating with Turner Development Group to build at least 200 affordable homes and apartments alongside the massive residential project proposed for the Westport neighborhood on the Middle Branch of the Patapsco, The Sun has learned.

Despite a deteriorating housing market, homes for low- and moderate-income residents can be hard to find in Baltimore, especially in strong neighborhoods. The city's ability to address the shortage might depend on how it applies the new law to projects such as the one proposed for Westport, a $1.4 billion residential and retail development.

"We have now not only the moral authority but the legal authority to say to a developer that 'We want to see a mix of incomes in your development,' " said 1st Deputy Mayor Andrew Frank.

But as details about the development emerge, a growing coalition of advocacy groups are questioning the deal, for which the city plans to borrow $160 million. About $90 million of that will directly benefit the Turner project. The remainder will be used for affordable housing near the Turner site, financing and other costs.

While praising Mayor Sheila Dixon's administration for making progress, the groups are asking the city to double the number of affordable units.

"It's a good first step," Bibi Hidalgo, managing director of the Inclusive Housing Coalition, said of the city's affordable housing commitment. But, she asked, "Is everything being done, given that the city is putting in such a major subsidy?"

The city's affordable-housing law - also known as the inclusionary housing legislation - was introduced in December 2006, and the City Council approved it in June 2007, months before the September Democratic primary that effectively decided the races for mayor and City Council.

Local governments across the country rely on similar laws to encourage developers to sell a portion of their homes at lower cost. That allows low- and middle-income families to buy and also promotes income diversity in neighborhoods.

Under Baltimore's law, residential developers who receive tax breaks and other subsidies from the city are required to set aside 20 percent of the project's housing as affordable units. Taxpayers, not developers, pick up the cost of building those homes.

But the legislation, which faced a barrage of more than 100 amendments in the council, gives the city housing commissioner broad power to exempt projects or alter the 20 percent goal. The commissioner is appointed by the mayor.

Of the $70 million not being directed to Turner, the city plans to spend roughly $6.5 million to renovate 70 nearby vacant rowhouses for affordable housing.

That money would come in the form of tax-increment financing, an increasingly common arrangement in which the city borrows money for a project and repays the bonds with property taxes generated by the development.

In addition to the $6.5 million in bond money, the city has also vowed to identify roughly $15 million to build 130 affordable apartments within the development. At least part of that money could come from federal grants and tax breaks.

In all, the 200 affordable units would represent 10 percent of the project if Turner builds the 2,000 units he has proposed - half of the 20 percent goal that is set in the legislation. Frank and other city officials said 20 percent is not feasible for the Westport project.

Patrick Turner, head of Turner Development, did not return a phone call seeking comment.

Housing advocates said their enthusiasm for the city's efforts is tempered because they have not seen the details. Turner has not yet signed the proposed agreement, and city officials promised to release the specifics of the deal only after he does.

Some advocates question why more isn't being earmarked from the $160 million tax-increment subsidy - the largest ever issued by the city - so that more affordable units could be built.

Unite Here, a union representing 2,200 hotel and restaurant workers in the city, organized a forum recently to discuss Westport, the subsidies and affordable housing generally. The union's leaders have said many of their members live in Westport.

Dan Pontious, acting executive director of the Citizens Planning and Housing Association - which helped draft the housing law - said he, too, has questions about how the deal is structured. On the other hand, he said, affordable housing might not have even been on the table for Westport if the bill had not been in place.

"I think the law set the tone for this development," Pontious said. "This is a starting point, [and] it is significant."

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