If you live in a city, you’ve heard the term “workforce housing” more than once. It’s an oft-misunderstood term, some think it means “low-income” or Section 8 housing, this is not necessarily so. Workforce housing is affordable to people who earn roughly 60 to 120 percent of the area’s median income.
Instead of repackaging the City’s failed “SCOPE” program as the unsustainable “Vacants to Value” program — how about fixing up the vacants that are structurally sound, to the point where they’re habitable? Make them available for purchase by City residents (proof of residency required, i.e., tax returns) who are eligible for workforce housing? Further improvements on the homes (granite counters, stainless appliances, etc) could be at the new owner’s expense — the City would provide the bare bones (laminate counters, basic appliances, etc.) If the buyer defaults on the loan (made through state/federal/City partnership), the City takes back the home and sells it at market rate.
Speaking of market rate — after the residency requirement has passed (I suggest a minimum of 5 years) — the home can be resold. However, the original owner can only set the asking price at 10% more than what he or she paid (including additional renovation costs), guaranteeing the homes would always be available to middle-class residents. This could easily be written into the deed/program documents. An example of how this would play out:
- Homeowner A buys the house at $80,000 and puts another $10,000 into it for upgraded appliances, counters, etc. Homeowner A can now sell the house for $99,000 after five years. ($90,000 + 10%).
- Homeowner B buys the same house for $99,000 and spends an additional $5000 for a new patio, and an additional $5000 to add a powder room to the basement. Homeowner B can sell the home for $119,900 ($109,000 + 10%)
Some possible hurdles and responses:
The City has said it doesn’t want to be in the real estate business — Well, folks, the City is in the real estate business — that’s what Vacants to Value is. Instead of expecting residents to totally gut and rehab vacants, do it for them — put the City’s huge unemployed population to work, combine the program with one of the City’s many job training programs, and let these folks work on the homes.
Investors will buy the homes, not residents. This is where closer screening comes in. Tax returns would be useful in determining residency — see also the University of Maryland’s requirements for receiving in-state tuition. (Scroll to Paragraph II.) For most of the University’s requirements, just substitute “Baltimore” for “Maryland”.
This will cost the City too much money. Considering what the City already spends in tax incentives for big developers, why not spend some of that money on taxpaying residents? In the long run, the City would recoup its costs (and potentially make a hefty profit once most of these areas are revitalized). The homeowners would perhaps stay in Baltimore longer, after making such a commitment, and would be paying taxes on the homes — and hopefully shopping, dining, and playing locally. Everyone wins!
I’d call the program Welcome Home, Baltimore.
I posted a shorter version of this on our Facebook page, and it’s gotten a few interesting responses. Please feel free to comment on this post — ideas are always welcome!