By Susan Dickson
Staff Writer
The Orange Community Housing and Land Trust will need $3 million over the next 20 years in order to keep its homes maintained and affordable, director Robert Dowling told county leaders last week at the Orange County Assembly of Governments meeting.
“I wish I could tell you that we were doing both of those things very, very well,†Dowling said. “Our homes are not staying affordable to people who need to buy them.â€
The land trust was created in 1999 to help low-to-moderate-income buyers purchase affordable, quality homes. Through the program, people who earn less than 80 percent of the area median income can buy homes at prices below market value because of government assistance provided to the land trust.
The program sells the homes using a 99-year ground lease. When land trust homeowners want to sell their homes, they earn about 20 to 30 percent of their home’s appreciation.
In order to be successful, the program must keep its 125 homes—nine of which are in Carrboro—affordable and well maintained, Dowling said.
Area median income is determined according to census data for metropolitan statistical areas (MSA) and generally increases annually.
In 2003, the MSA that included Orange County and Wake County split, with Orange County now being grouped in the Durham MSA.
Median income levels in the Durham MSA have stayed flat for five years, while home prices have appreciated. That’s diminished the pool of potential buyers for many of the land trust’s homes. Dowling said the land trust estimates that median income levels will remain flat until 2010.
Dowling said the land trust’s model, patterned after a program in Burlington, Vt., needs changes. “We simply didn’t understand then what we know now,†he said. One of the changes the program has already made is a stewardship fee for the maintenance of homes.
Although most of the homes owned by the land trust are relatively new, Dowling said the organization is planning for future maintenance, which can become costly when homes need new HVAC systems, roofs or extensive repairs.
For new homes, the program will charge a stewardship fee relative to the type of home: single-family homeowners will be charged $120 per month, condominium owners will be charged $40 per month.
According to Dowling, the program will need an additional $1.508 million for maintenance of homes over the next 20 years. The land trust will also need $1.564 million to keep homes affordable during the same time period. This $3 million, he said, “doesn’t have to be taxpayer money.â€
One possibility is developers making payments in lieu of building affordable homes. Fifteen percent of new developments must be considered affordable housing.
With two recently approved developments—Greenbridge on Rosemary Street and East 54 on Highway 54—the land trust could purchase 75 affordable condos for a set price. For each condo not built, however, the town could receive $75,000 from the developers. The funds would not go directly to the land trust, but could be a source of funds used toward affordability and maintenance, according to Dowling.
In addition to funding, the type of housing that’s available is also a concern.
Because many land trust home buyers are families hoping to purchase single-family homes, condos are more difficult to sell, Dowling said. “Families can’t live in a one-bedroom condo.â€
The land trust’s workload is also becoming an issue as more developments with affordable housing are built. With a growing inventory of 125 homes, the staff of one part-time and five fulltime employees is working long hours to keep up.
“This organization needs more horsepower,†he said. “My objective is to make it work.â€