Down payment assistance gets unanimous Council backing

Paul D'Angelo presents to Asheville City Council
FOLLOW THE MONEY: Paul D'Angelo, city housing development specialist, presents the $1.4 million Down Payment Assistance Program to Asheville City Council. Photo by Daniel Walton

Asheville City Council member Julie Mayfield had a very clear request for prospective homebuyers regarding the city’s new $1.4 million Down Payment Assistance Program. “Please come get this money,” she said. “We want to spend it and we want to put people in houses.”

The program, unanimously approved by Council members at their Feb. 26 meeting, offers no-interest loans of up to $40,000 for low- and moderate-income borrowers to make down payments on single-family residences within Asheville city limits. Loans will be funded by $1 million of the 2016 Affordable Housing General Obligation Bonds, $300,000 in Housing Trust Fund money and $100,000 from the Federal Home Loan Bank of Atlanta.

Paul D’Angelo, the city’s housing development specialist, noted that the use of bond funding for this purpose is an uncommon tactic that nonetheless makes strategic sense for Asheville. “It’s not something I’ve seen out there, and especially around North Carolina,” he said. Area nonprofit organizations such as OnTrack WNC, Mountain Housing Opportunities and Habitat for Humanity, he added, all support the program.

Eligible properties, D’Angelo continued, include condominiums and townhouses in addition to traditional single-family houses. “If there’s any developers out there listening, we’d love to see more condominiums and townhomes out there; they can be a more affordable product,” he said.

Council member Keith Young drew particular attention to the $500,000 set aside for individuals and families making less than 60 percent of the area median income, or $36,780 for a family of four. The remainder of the $1 million in bond funding, as well as most other city affordable housing initiatives, uses 80 percent of AMI as the income threshold.

“There is a chunk that is set aside to make sure that those who really need it can access it,” Young explained. He added that those funds will only be reserved through the end of 2021 before rolling into the broader program, which expires in October 2023.

An additional $400,000 is reserved for “community heroes,” full-time employees of the city of Asheville or Asheville City Schools who have been at their jobs for at least a year. To be eligible for the program, these borrowers can make no more than 120 percent of the AMI — $73,600 for a family of four — and must apply by March 2020.

Although the city will charge no interest or monthly principal payments on the loans, borrowers must repay the original amount, plus an additional amount tied to the property’s appreciation, if they sell their homes within 20 years of purchase. The appreciation payment decreases by 10 percent annually after that point, and the loan is completely forgiven after 30 years.

Originally slated for Council’s agenda of Feb. 9, consideration of the program was postponed so its language could be made clearer. Mayfield said developing the policy had been problematic but thanked staff members for their hard work in taking the idea through “really complicated waters” from its “messy” origins in the Housing & Community Development Committee.

The only member of the public to comment on the policy, Devinceo Priester, also expressed his support. “I feel real good that somebody is actually willing to give Asheville a chance,” he said.

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About Daniel Walton
Daniel Walton is the Green Scene editor and city government beat 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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16 thoughts on “Down payment assistance gets unanimous Council backing

  1. Lulz

    LOL and when they default on them then this assistance will be nothing more than wealth transfers. So the city is again forcing one person to pay and possibly lose their property so another can get handouts that they’re never going to pay back. That’s smart.

    • luther blissett

      You’ll have heartburn when you find out how the USDA loan guarantee program works.

  2. cecil bothwell

    This looks more like show than substance. If the average loan is $25K, it will subsidize fewer than 60 purchases. At $10K only 150. If, as some believe (I do not) we are experiencing a “housing crisis” this is a drop in the bucket. If we are not in a crisis then it is a meaningless gesture.
    Far better to invest this kind of money in expanding the transit system to enhance affordability for many more people and let the market solve the mortgage equation.

    • luther blissett

      This was why (like Cecil) I opposed the housing bond, because it created too many incentives for marginal policies. It is a stupid decision on the heels of another dumb decision with the Hilliard development.

      “If there’s any developers out there listening, we’d love to see more condominiums and townhomes out there”

      Uh, they’re not listening. We’ve already established that. Developers want the margins of more upscale development. If you want affordable housing you will have to build it — or have it built to your specifications — and retain it as an asset.

  3. SpareChange

    This is another example of many policies being upside down in terms of which level of government in our federal system attempts to take responsibility for it. Local government is best equipped to deal with distributive (as opposed to redistributive) policies, such as basic service delivery, law enforcement, to some extent education, local transportation, etc. It is not in a position, and lacks the resources, to make much difference when it attempts to have an impact on huge issues like housing, much less trying to move the needle on systemic economic inequities or disparities.

    Local government’s tax base is in most respects inherently regressive, and as such it makes little sense for local government to attempt to engage in redistributive policy on any scale. Something like housing is so huge, so complex and so expensive, that a city really can’t expect to have any impact on this policy area (except through its zoning power), even within its own boundaries. That’s without even getting into the unanticipated consequences of such policies, or the trade-offs and loss of resources to other policy areas where local government can make a difference.

    • SpareChange

      I’m sure there would be some uncounted benefits I am overlooking to go along with the uncounted costs that I’m just as certain the city is missing. However, even crude calculations suggest that this is just not a good use of $1.4 million.

      Looking at things at a macro level, with 40,000+ households in Asheville, selecting 60 of them is less than .0015 of the total households. About half of the households own their own homes already (the census shows an owner occupied housing rate of approx. 50%). Even if we very conservatively make a guess that 10,000 households might qualify under one or more of the scenarios for receiving these loans (and I believe it could be substantially higher), those 60 families would be 6/10ths of 1% of the eligible households.

      Even if we assume the money is distributed in absolutely optimum fashion, what will be the unseen administrative costs in managing it? How many personnel hours have already been devoted to this? How many personnel hours will it take to implement the program and see it through the application process, the approvals, the actual granting, the supervision, the paybacks, over a period of 30 years? What are the costs to the City to cover all of that administration? Against that backdrop, it just does not seem like the program can possibly have any impact on the Council goals stated in the staff report: “Quality affordable housing & equitable and diverse community.” It creates less than a ripple in addressing such issues, and does so at considerable expense.

    • Enlightened Enigma

      WHO gets to pick the winners and losers ??? WHO makes the decision ?

    • Jim

      Taxpayer subsidy for those that can’t afford the increasing cost of housing because of Asheville City Council policy, well done indeed! Karl Marx would be proud!

  4. jason

    The recipients of these “loans” aren’t even capable of budgeting for a day much less a week. This is a waste of money. Can we throw them out on the streets when they can’t make their two mortgage payments?

    • luther blissett

      ‘The recipients of these “loans” aren’t even capable of budgeting for a day much less a week. ‘

      [citation needed]

      A permanent sneer isn’t a good look.

  5. Shim

    Government should never be involved in housing. Gains for the few, risk for the whole. No one learns the lessons of the past especially this city council.

    • Enlightened Enigma

      exactly… which is why have WAY too much public housing in Asheville ! Asheville Housing Authority is Asheville’s BIGGEST ENEMY led by Asheville’s BIGGEST Segregationists, Gene Bell and David Nash. Evil people and they should be ashamed to show their faces in Asheville! Help us STOP the Lee Walker redevelopment now!

      • luther blissett

        Public housing is good and there should be a lot more of it, enough that people on middle incomes are happy paying rent with secure tenancies that allow them to paint the walls.

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