When Lee Walker Heights was transformed from 96 apartment units into a subdivision of 212 units, it was a prime opportunity for Asheville to convert these units from subsidized housing apartments into affordable condominiums that qualifying low-income residents could buy. This would be a win-win for residents and the city.
More people would enjoy the benefits of homeownership, and they would pay less for mortgage payments and ad valorem property taxes than many people currently pay for rent. The city would benefit by (1) selling the condos and getting repaid most or all of its investment and (2) using the sales proceeds to fund other housing options.
This would be preferable to pushing more “bonds” on taxpayers. Bonds simply lead to increasingly expensive property taxes, which ultimately make housing less affordable.
Granted, people would need to qualify for a mortgage, but there are housing grants available, and Federal Housing Administration loans available that finance up to 100% of the purchase price. The city might also contribute or waive the down payment, such that a mortgage company would be willing to provide financing for the units. How many people would be willing to work harder or clean up their credit score if they knew buying their own home was a viable option?
According to dwellics.com, in 2022, the average cost of a one-bedroom apartment in Asheville was approximately $1,474 per month. As a hypothetical, if a two-bedroom, one-bath condo unit sold for $200,000, a 30-year mortgage financed at 5% interest would result in a monthly mortgage payment of $1,073.64. If $125 per month were added to the mortgage for estimated property tax, homeowners insurance and homeowners association maintenance fees, the monthly housing cost would still be under $1,200 per month.
This is affordable for the average individual or family earning $3,600 a month, or $43,200 a year. If an individual wanted to sell their unit within a certain time frame, there could be a mechanism in place to keep it affordable. One example would be that they could only sell it for an amount sufficient to recoup the principal that had been paid on the mortgage.
People would take better care of the units if they owned them. They would also care more about their neighborhood being free of drugs, crime and litter.
Instead of borrowing money (bonds) that is given to investors, perhaps the city could invest directly in its citizens.
— L. Cash