Council to consider down payment assistance at Feb. 12 meeting

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NOTE: On the morning of Feb. 12, the Down Payment Assistance Policy was continued to the Council meeting of Tuesday, Feb. 26.

Prospective first-time homebuyers may soon get a leg up from Asheville’s government thanks to a new program slated for discussion at City Council’s Tuesday, Feb. 12, meeting. The Down Payment Assistance Policy could provide $1.4 million, in no-interest loans of up to $40,000 each, toward mortgages on single-family residences within Asheville city limits.

As explained in a staff report by Paul D’Angelo, the city’s housing development specialist, the policy is meant to promote homeownership among “moderate- and lower-income families” making up to 120 percent of the area median income. That equates to $51,600 annually for an individual or $73,600 for a family of four.

Up to $1 million in funding would come from the city’s $25 million Affordable Housing General Obligation Bonds, which were approved by Asheville voters in 2016. Half of these funds would be reserved through the end of 2021 for buyers making under 60 percent of the AMI, while the remainder would be available to those making up to 80 percent of the AMI and would be spent by the end of October 2023.

The remaining $400,000 would consist of $300,000 from the city’s Affordable Housing Trust Fund and $100,000 from the Federal Home Loan Bank of Atlanta. Money from this pot, which would expire in March 2020, would be restricted to city government employees and Asheville City Schools teachers — referenced in the policy as “Community Heroes” — making between 80 and 120 percent of the AMI.

Homebuyers would not make monthly payments on the down payment loans but would be required to pay the money back upon the sale or refinancing of their properties. While the city would charge no interest on the loans, the repayment amount would be adjusted proportionally to any appreciation in home value.

Capital ideas

Before their regularly scheduled meeting, Council members will hear a budget briefing about the city’s Capital Improvement Plan. According to a presentation posted before the meeting by city Chief Financial Officer Barbara Whitehorn, Asheville will spend $33.6 million on capital projects in the current fiscal year, with over $45 million in spending anticipated for the next budget cycle.

However, the presentation notes that the city’s infrastructure needs far exceed its currently planned funding. While $60 million has been earmarked for projects through fiscal year 2023, city departments have requested $330 million in funding through fiscal 2024.

Specific unfunded projects include $60 million to renovate the Thomas Wolfe Auditorium, $26 million in greenway system expansions and $5 million to upgrade infrastructure at McCormick Field. The Transit Master Plan — unanimously approved by Council in July and originally slated to expand bus service this summer — also remains unfunded to the tune of $76 million, including $50 million for a new bus operating facility.

“Like most communities, Asheville has historically been challenged to fund capital needs,” Whitehorn writes in the presentation. “Continued investments are required to maintain our momentum.”

Consent agenda

Council will vote to approve 12 items on its consent agenda for the meeting. Unless specifically singled out for separate discussion, these items are typically approved as a package. Highlights include the following:

Asheville City Council meets at 5 p.m. in council chambers on the second floor of City Hall at 70 Court Plaza, Asheville. The budget briefing on the Capital Improvement Program will be held in the same space starting at 3 p.m. The full meeting agenda and supporting documents can be found here.

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About Daniel Walton
Daniel Walton is the Green Scene editor and a reporter for Mountain Xpress. His work has previously appeared in Capital at Play, Edible Asheville, and the Citizen-Times, among other area publications. Follow me @DanielWWalton

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9 thoughts on “Council to consider down payment assistance at Feb. 12 meeting

  1. Wrong

    “The Transit Master Plan — unanimously approved by Council in July and originally slated to expand bus service this summer — also remains unfunded to the tune of $76 million, including $50 million for a new bus operating facility,” is a lie. Original article in Xpress stated that bus “service” would expand routes in the first of the year…one presumes that would be 2019. Watch this money be frittered away…things don’t change.

    • According to Council member Julie Mayfield at Council’s formal meeting on Nov. 27: “I’m aware that [former Transit Planning Manager] Elias [Mathes] kind of set this expectation that implementation of the new plan would start July 1, even though we didn’t have a mechanism to allocate new money until July 1. … The transit committee was informed this week that, in fact, that’s not going to happen, and we can’t plan to roll out a system on July 1 when we have not allocated the funds to do that yet.”

  2. jason

    Terrible idea. Just take that money and set it on fire. The city will NEVER see repayment of that money. This is in the worst interest of tax payers. Why should we just give no interest loans to people who may or may not be able to pay them back in 20+ years? Too much can go wrong. If you can’t afford a house, you likely can’t afford to take care of one either. This is a dumpster fire of an idea.

    • luther blissett

      “If you can’t afford a house, you likely can’t afford to take care of one either.”

      I see that you’re neck-deep in stereotypes about renters, which is telling.

      You conveniently forget that the federal government created lots of schemes to make home ownership affordable for [white] people who otherwise couldn’t afford to buy, going back to the FHA and then the GI Bill. The 30-year fixed-interest federally-backed mortgage — unique to the US — was specifically devised for this purpose. If you’re outside the Asheville / Biltmore Forest limits in Buncombe County you have the option of a USDA loan on a modest house with no money down.

      Nevertheless, this is a dumb dumb dumb idea. The problem with the FHA / GI Bill / USDA model is that it allocates public capital to individuals, and a generation or two down the line, the beneficiaries think it was all through their hard work and not a hand-up, and why do they need to pay property tax on a home they inherited free and clear?

      Build housing. Rent it out. Let renters paint the walls and put some life in their living space. It’s not rocket science. And yet City Council runs away from it because developers demand the profit margin on condos.

      • Mike

        The feds also created the Community Re-investment Act … which led to banks being coerced to make mortage loans to folks with no way to pay them back which led to the banks selling junk mortgage backed bonds which led to a the massive financial crash in fall 2008.

        • luther blissett

          Yeah, that’s not what happened.

          If it makes you feel better to blame low-income people (especially people of color, who were mostly locked out of the massive redistribution of wealth to white people in the FHA / GI Bill / Levittown years) then go right ahead. It means lying to yourself that Alt-As and Jumbos and HELOC abuse and cashout refis — known at the time as the “housing ATM” — weren’t a huge part of the equation, or that the banks weren’t complicit in labeling high risk as low risk. Much easier to kick down from that pedestal.

  3. C-Law

    At least the headline is right track.

    But the real issue is in exploring why Asheville, indeed, most cities in the American Empire are so expensive.

    In other words why is it that a $50,000 salary isn’t more than enough for a family of four to live on?

    Remember, we’ve been told that there is no inflation issue over the last 30+ years. Well, if there’s no inflation (increase in the cost of living) then why is it that all these people have huge amounts of student debt and why is the cost of living so damn high?

    One of the two has to be false. Either all those “struggling” are lying or there has been massive inflation.

    Inflation, I remind you, is always and everywhere a monetary phenomena — and as a result, since Congress is in charge of the Federal Reserve (they not only enabled it originally they control the law governing it) and the regulation of banks that emit credit and thus expand the money supply it is entirely within the responsibility and control of Congress that has, in fact, led to this circumstance.

    In other words, as I pointed to my late father in the 1990s, you voted for this **** and as a result you already spent the ****ing money. And to the politicians who always trot out their “soak the rich” argument for higher taxes–No, you cannot tax your way out of this because you already spent the damn money over the last 30+ years!

    You can’t spend the same dollar twice. The outright fraud peddled by people with their “MMT” nonsense is exactly identical to claiming you can. Ditto for those who says “deficits don’t matter”, or that we should “use” deficit spending to “prop up” this or that.

    The price of all of this is inflation and by definition inflation drives up the cost of living in nominal dollars.

    You can’t fix this by “giving” people raises, government guaranteed minimum handouts, etc., because that also results in more dollars being introduced into the economy, especially when any part of it comes from the Federal Government that simply prints it into existence through the Treasury market.

    Asheville has the same basic problem as does damn near everywhere else. There’s no accountability — that township spends a crazy amount per-capita on some essential and many non-essential services for which there is little to no demand. Likewise, Asheville has a crazy cost of living because just like most areas they “need” to spend all this money on schools yet there is no evidence that any of it actually improves educational outcomes. We also “need” to spend nearly $4 trillion a year in this country on “health care” most — about 3/4 or more — is siphoned off through fraud, felony, extortion and price-fixing..

    This can end today.

    Right here, right now.

    We need no new laws or regulations. We merely need to enforce existing law, specifically 15 USC Chapter 1 against all medical firms as regard disparate pricing based on one’s insurance status, a clearly-extortionate and illegal act under 100+ year old law which forbids any collusive act intended to limit competition and/or fix prices. Said law has been challenged twice by the insurance industry all the way up to the United States Supreme Court with the first such challenge in 1979 (Group Life & Health .v. Royal Drug, 440 US 205) claiming an exemption for health insurance providers under McCarran-Ferguson. THEY LOST.

    All of these things and more have driven the cost of living in real terms through the roof.

    The problem isn’t that full-time skilled workers only make $40,000 or $50,000 a year. That’s pretty good money.

    It’s that a family of four can’t live on that because all the pie-in-the-sky “free money” games have driven up inflation whether reported or not.

    It shouldn’t be like that and absent fraud and felony it wouldn’t be. Productivity is by definition deflationary; the definition of improving productivity is doing more with less! Therefore if productivity expands at 2% a year (for example) then what you used to have to pay $100 for now costs $98! So why is it not $98, but $105? Because someone stole the other $7 from you, that’s why.

    The answer is to collapse price, not increase wages. Increasing wages simply steals more by forcing more credit and currency into the system and prices will rise further. You can’t win that game; you can try to take it from the “rich” but the rich always get their hands on it first and thus they can (and do) evade the impacts more than you can as a common person. That’s just a function of how capital works; the first person to get their hands on emitted credit can evade a part of the inflationary impact while everyone else bears the full price. No matter how you try to structure this you as a common person lose because some bank gets their hands on it first.

    The only answer to stop this is — again — to collapse price. While not all of this problem lies in education and health care a huge percentage of it does and resolving 80% of most problems can be tackled in one or two places. The remaining 20% is harder because it’s more-diffuse but if we resolved the 80% then hard working folks making $40,000 or $50,000 a year would be doing just fine.

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