"A Nostalgic Fantasy": Baltimore's $1 Houses Explained (2023)

Last week, Baltimore City Council President Nick Mosby, who is he?fund raisingto defend himself in a federal investigation, he unveiled a dollar housing program that his office says will revitalize the city and narrow its racial inequality. The legislation allows certain Baltimore residents to rent an empty home for as little as $1 for two years while they make necessary repairs. Once the previously vacant home is habitable, title will pass to the $1 tenant.

The need for cheaper housing is evident in Baltimore. City dwellers have long been excluded from the wealth-building opportunities that home ownership offers, and Baltimore's average selling prices almost did.duplicatesince January 2020.

"In addition to creating generational wealth, purchasing an affordable home will also save hundreds of dollars a month for many city renters," according to a press release from the Council President's office. "Nearly half of Baltimore's renters spend more than a third of their income on housing."

Many real estate attorneys and even some investors are suspicious. They say the Mosby legislation is a ripoff of pre-existing policies and caution that, if past attempts at this program are any indication, the program would hugely benefit the wealthy and property developers. Housing Our Neighbors, a grassroots organization that campaigns for affordable housing and the rights of people affected by housing insecurity and evictions in Baltimore, called Mosby's Dollar Homes program a "PR stunt."

"Dollar homes require resources and time, things that many of us simply don't have", Housing Our Neighborstweetedlast week. “This isn't really about fairness, it's a PR effort by @Nick_Mosby giving grants to people who can flip a house while some of us are still in tents and shelters. But go on.

It is not enough

Dollar Home's proposal is targeting formerly fenced neighborhoods in East and West Baltimore. For long-time residents and first-time homebuyers in the city, dollar homes are part of a larger suite of bills that charge home ownership for up to $25,000 for general repairs, $10,000 for emergency repairs, and $10,000 for emergency repairs. $5,000 for Senior Pre-Foreclosure Allowance.

Marc Rollins, a Baltimore-based real estate investor who has been servicing vacant properties for the last three years, sharedbaltimore battlefieldthat the Mosby numbers just don't add up to enough support.

“$25,000, depending on the property you're buying, is not enough,” Rollins said.baltimore battlefield. “Most of these houses need new flooring, they probably still have lead paint. You have to rip out the whole house and put it back together. The overall project can cost at least $60,000 to $100,000."

The proposed dollar housing legislation will require applicants to secure financing for repairs, but does not specify how low-income families, many of whom through no fault of their own have bad credit or poor credit, will obtain the necessary additional equity.

According to an FAQ posted on the boardsite web, repairs and improvements "would be financed by an approved lender under a principal loan at or below the market rate of interest". He does not offer further details. Three contractors with extensive experience rebuilding vacant lots in Baltimore sharedbaltimore battlefieldthat the cost can range from $100,000 to $250,000.

Rollins added that many of Baltimore's homes that would require less work have already been purchased by developers or contractors with the funds to buy.

"You might find a gem here or there," Rollins said.baltimore battlefield. "But they almost disappeared."

"Nostalgic Fantasy"

Mosby's Dollar Homes program cites the previous iteration of Baltimore's Dollar Homes program, which had been in existence for over 40 years.

When former councilwoman Mary Pat Clarke proposed bringing back the Dollar Homes program in 2017, her real impact wasrechecked. In reality,less than 200 housesthey were sold through the previous dollar housing program, primarily to benefit white homebuyers. The previous program also focused on the downtown neighborhoods of Federal Hill and Otterbein, giving buyers immediate access to capital. The housing stock was in much better condition than it is today.

The current iteration of Mosby's proposed program will likely lead to higher home improvement costs. This is because the program focuses on areas that were previously marked in red and are already significant.devalued. As a result, homebuyers are at risk of losing their mortgage, meaning they are putting more money into renovating their home than it was worth when it was appraised. This can leave them tens of thousands of dollars in debt.

Parity Homes, a black-owned developer that converts homes into affordable housing, estimates that the valuation gap has closed in West Baltimore's Harlem Park neighborhood.average $70,000.

That year, Maryland passed legislation passed by Senator Antonio Hayes and Del. Brook Lierman and established a fund with the Maryland Department of Housing and Community Development to close the assessment gap in low-income gated neighborhoods and census tracts across the state.

"If this bill gets full funding from the department and the governor, it could be extremely helpful in renovating vacant housing," said Brook Lierman, who is running for state comptroller.baltimore battlefield.

The program has yet to be funded, and it's unclear when the pilot program will begin: "I'd like to see a minimum initial funding of $15 million for this program," Lierman said.

Other cities experimented with dollar housing, often with less-than-stellar results.

One program that the Office of the Chairman of the Board has reviewed is that of Philadelphia. According to a 2020Philadelphia investigators To analyzeOf the 2,314 homes sold through the municipal program since 2000, more than half are empty. A third was resold, raising millions for real estate developers. Meanwhile, nearly 400 Philadelphia buyers had back taxes and debts owed to the city.over $867,000.

AInvestigationVonThe Kansas City LighthouseIn Kansas City's initiative to sell city real estate for as little as a dollar, the program was found to be riddled with "potential conflicts of interest between board members and buyers and a failure to hold buyers accountable for their own needs." Hefarofound that "as a result, a citywide neighborhood revitalization program leaves dozens of lots vacant for years."

Ian Bukowski, a former project manager for Chesapeake Habitat for Humanity who has worked to build affordable housing in Baltimore for more than a decade, has questioned the effectiveness of the Dollar Homes program.

“It feels like an attempt at a simple solution to a complex problem that relies on nostalgic fantasy and generates headlines and catchphrases rather than true transformation,” Bukowski said.

"Big repairs'

The council president's office said it had spoken with "economic policy advisers, affordable housing experts and community builders" about the dollar housing program. A prominent housing advocate, who spoke on condition of anonymity because his organization has not made a formal statement about the Mosby legislation, said neither he nor the advocates he spoke to had been consulted about the program. He noted that the city is making a number of efforts to create affordable housing that includes comprehensive services and other supports that studies show are critical to successful home ownership.

Mosby's director of communications Yvonne Wenger did not provide any information.baltimore battlefieldwith names of specific people they spoke to and referred us to themfrequently asked questions, which also does not provide a list. The FAQ states: "The team reviewed federal proposals from U.S. Representative Maxine Waters and U.S. Senators Chris Van Hollen and Raphael Warnock. The Office of the Chairman of the Board also reviewed Baltimore's Dollar House program from the 1970s and studied audiences in 2017 and 2019 that evaluated the possibility of repeating the program, analyzing the public testimonies that were offered at the time".

dr. Lawrence Brown, cientista pesquisador do Center for Urban Health Equity da Morgan State University, dissebaltimore battlefieldhe believes that something much more ambitious needs to be established.

"With thousands of homes, you would be talking hundreds of millions to properly finance this to make sure people have the capital," Brown said. "Everyone is happy with the dollar... But the problem with empty houses is, 'Do you have the capital to rehabilitate them?'"

Baltimore is already on the verge of creating affordable housing with a series of initiatives nearing completion. So far, the city has allocated just $750,000 of the $33 million in funding through the Affordable Housing Trust Fund, which was the culmination of a decade of grassroots struggles to invest in developments like community land trusts.

The South Baltimore Community Land Trust will use $750,000 for 10 affordable housing units in the Curtis Bay neighborhood. Available to those earning less than $46,000 a year, these homes offer a 99-year lease, allowing these new owners to build equity if, or if, they leave the Land Trust and sell their properties.

"When you see how communities are affected by divestment, this focus on community management and development is an opportunity to make real change," said Meleny Thomas, executive director of the South Baltimore Community Land Trust.told meearlier this year. "This can only be done through subsidized opportunities to acquire affordable real estate and partnerships with other agencies."

Community land trusts can play a key role in undoing the damage done by racist public policies such as redlining, divestment and segregation.

“Part of economic dispossession is not just that you hurt individual people economically, but entire neighborhoods are hurt economically,” Brown said. “Community land trusts help address the disadvantages and harm done to the community through this model of democratic ownership.”

Brown himself proposed a $3 billion social impact bond for racial justice. in your bookThe Black Butterfly: The Harmful Race and Space Politics in the United States, proposes compensation to Baltimore neighborhoods for the damage that racist public policies like Redlining have caused to black communities.

“If we're talking about the city healing black neighborhoods that it has damaged, as a unit and across multiple agencies, I think it's important to move forward with these larger remediation efforts as well,” Brown said.

Bypass legislative review

Mosby, who has not previously shared the details of his legislation with the mayor's office, invokes the "down committee" to bypass individual committees and chair hearings on the bill directly before the city council. According to Mosby's office, this is being described as "a move that marks the scale of the legislation and the potential it brings to transform the city."

For Baltimore City Historian Matthew Crenson, appealing to the Committee of the Whole is "a way around the committee process and issues that may reveal critical flaws in this proposal."

A city government source who wished to remain anonymous explained some of the problems with Mosby's program, starting with its origins in the idealized but actually dollar-filled housing program of the 1970s.

"The original Dollar Homes program was more affordable for people who could get large loans from banks for home renovations and mostly benefited wealthy white developers," they said.baltimore battlefield.

Furthermore, the Mosby legislation could actually weaken current fairness standards, they explained, "This legislation duplicates existing municipal programs, in some cases with weaker fairness standards, and contains provisions irrelevant to the City of Baltimore as a jurisdiction. "

For example, Baltimore already has a list of available properties and a cost estimate for those properties. And they said that the analysis of the asset disposal process is underway, carried out jointly with the Controllership.

"The council's proposed home repair program is a complete rip-off of the program the city has operated for over 20 years and would legislate weaker standards," they said. “Currently, the city is prioritizing people with less than 30% AMI. This calculation would apply to people below 60% AMI. The council bill limits assistance to $10,000 for an emergency. The city’s current program goes beyond that amount.”

Mosby's legislature also includes a provision for mobile homes, but there are no mobile homes within Baltimore's city limits.

Mosby heavily promotes the Dollar Houses program. In the four days after Mosby announced the law, the Baltimore City Council's official Instagram account, @baltcouncil, posted nine times about the Dollar Homes program. In most of these posts, Mosby tackles the plan with stylish videos or poses with council allies in sharp, professional photos. Of course, there's a hashtag and even a teaser post. It read: "City Council Chairman @nick.mosby wants Baltimore's dollar homes back. Stay tuned for more on this big announcement today. #HouseBaltimore."

For many housing advocates, the Dollar Homes program and the way it is sent by the council is reminiscent of the Mosby Bail Bond Alternatives Act, similarly enacted by Mosby, which the City Council passed, but Mayor Scott later from tenants and vetoed by the professional. - housing advocatesprotested against the proposal. Activists noted how Mosby's fairness rhetoric belied the fact that the bill would have benefited Rhino, a venture-backed start-up in the business of selling deposit insurance, rather than tenants. Housing advocates protested the bill, in one case placing banners at City Hall calling Mosby's bill a "fraud".

Brown emphasized that vetoing that bill resulted in better housing policies. in september scottsigned an invoiceto offer low-income tenants up to $2,000 for their security deposit. This program is run by the city and not a third party like Rhino that could benefit from the arrangement. brown saysbaltimore battlefieldHe hopes there is a similar opportunity to improve the Dollar Homes program.

"I'm sure if the president and the mayor can get together like they used to," Brown said, "a better version, a stronger version of this can be put together."

The first hearing for the Dollar Homes bill and accompanying legislation is December 20 at 5 pm.

Additional information from Brandon Soderberg.

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