Investment in urban-core housing yields gains for city

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by Jordan Green

New, affordable housing developed on city-owned land with federal funds is part of High Point’s strategy to diversify income and transform struggling Southside.

Community Housing Solutions of Guilford, a Greensboro-based nonprofit, is expected to start construction of two affordable houses in the struggling Southside neighborhood of High Point next month, following approval by city council of $287,038 in federal funds from the US Department of Housing & Development.

The two houses will be built on city-owned lots and sold to eligible buyers through a city-owned lease-purchase program whose participants receive financial and mortgage counseling during regular sessions at the library. The new construction will fill out the Southside redevelopment project, joining seven houses built from 2009 through 2012. Five have been sold to new homeowners, while two are owned by Unity Builders, another nonprofit homebuilder. The seven new houses have added a total of $682,200 to the city’s tax rolls.

Southside is part of the city’s poorest Census tract and one of its most racially diverse. Relatively close to the city’s central business district, the neighborhood’s residents share the area with several historic mills from the city’s industrial heyday a century past, along with numerous small manufacturing operations that are actively doing business.

The demographic the city has in mind for the two new houses is a couple with a combined income of $34,600 or a family of four with an income of $43,200 — in either case a marked difference from the area’s median family income of $13,064. In a neighborhood where it’s easy to spot placards advertising single-family homes as rental investments for as low as $15,000, the assessed values of each of the new houses in the redevelopment project ranges from $92,800 to $116,500.

Two of Community Housing Solutions’ models are respectively described in marketing materials as a “two-story turn of the century-style house” with a “Queen Anne-inspired exterior,” and a single-story Folk Victorian-style house ideal for a corner lot. Both houses boast U-shaped kitchens with breakfast bars that open to dining rooms.

Michael McNair, the city’s director of community development and housing, told members of city council prior to the vote to approve the contract with Community Housing Solutions that the city is bucking the tide of public perception in Southside.

Mayor Pro Tem Jim Davis, who chairs the city council’s finance committee and who is a homebuilder by trade, questioned the amount of the contract before voting with his colleagues to forward the request to the full council.

“I want to get in on that because that’s good money,” Davis said.

Michael McNair
Michael McNair

McNair responded, “We’re pretty adamant about not putting people in bad properties.”

Davis continued to press the issue during discussion in the committee meeting, saying that he couldn’t see how the numbers would work, and questioning whether the money would be better spent if it was spread among a larger number of properties and used to rehab existing housing.

“I will say to you that if we’re not going to invest in that community, it’s not going to change,” McNair replied. “Gentlemen, it’s possible, perhaps even likely that we’ll take a loss. We’re not hiding anything. If we go in and put in houses that look like what’s already there, the community’s not going to change.”

Reflecting on efforts to revitalize Southside and other areas of what is known as the Core City after the committee vote on June 11, McNair noted that it’s a long and gradual process.

“We’re trying to improve the value of the housing stock in the Southside by making properties available on the market that improve the neighborhood’s appearance,” he said. “In Southside we haven’t reached critical mass.”

Visitors to the neighborhood will immediately notice abundant vacant lots, many of them owned by the city as a result of condemnation orders against substandard housing. McNair acknowledged that vacant lots aren’t ideal for the aesthetics of the community, but argued that they are preferable to boarded-up, rundown houses.

Based on the experience of Graves Avenue near Washington Terrace Park on the city’s east side, where Habitat for Humanity of High Point, Archdale & Trinity built six new houses between 2008 and 2010, McNair said he is confident the same kind of transformation can take place in Southside.

“On Graves Avenue I think we’ve tipped the scales,” he said. “If you look at this rendering that they put out before they built the houses I defy you to tell me that the houses don’t actually look like this — maybe with the exception of the grade of the yards. We said we wanted different colors and we wanted front porches, and that’s what we got.”

The two projects — Graves Avenue, where the houses were marketed to families at 50 percent of median income, and Southside, whose target demographic is households from 60 to 80 percent of median income — illustrates the breadth of the community development and housing department’s efforts to encourage homeownership in the Core City, McNair said.

Those efforts have met with mixed success. The city has had difficulty finding takers for its Core City Homebuyers Assistance Program, which offers buyers a $7,500 loan at 3 percent interest that can be deferred for up to three years. The loan essentially gives homebuyers $7,500 they can put towards a downpayment to make the deal more appealing for a traditional lender. “We think there are a lot of people out there spending $1,000 on rent who would like to own a home,” McNair said. “That $7,500 will get you to the table.”

As an alternative, the city is using a lease-purchase program to market city-owned properties under redevelopment by contractors like Community Housing Solutions. Potential homebuyers receive training to improve their savings and credit, while leasing the houses for up to a year. The potential homebuyer has the option of buying or leaving the program at any time, and the city can likewise opt to not renew the lease if the homebuyer doesn’t meet eligibility requirements.

In the meantime, a number of initiatives are underway on the Southside to improve quality of life. “We’ve made several investments over the years,” McNair said. “We’re going to be asking council to build a bridge over Richland Park to essentially double the size of the park. You tie that together with the urban [agriculture] initiative, where they want to do orchards and they already have a community garden. There will be a greenway, and we’ll continue to add housing. Hopefully, as the market picks back up we’ll see some marked changes in the neighborhood.”

While Southside is a quintessential urban neighborhood, it lacks a critical component to attract wealthy condo-dwellers — restaurants, bars and grocery stores.

“It’s a food desert,” McNair said. “The market’s not working in that area. We don’t have enough rooftops with disposable income. Over the long term you have to create an atmosphere where you diversify the incomes.”

  • Observer

    Regrettably Mr McNair may not be the best judge of where the monies are spent, having admitted before open council while questioned by Mr Davis about how much of our grant monies received are wasted in “management” expenses.
    The fumbled and mumbled answer: 90%.
    Councilman Davis commented that he would not donate to a charity with such a track record.
    Most of us feel the same way, but hey, it’s only tax money being wasted for pure local politics.

    • Observer

      PS: in High Point the terms “deferred” for loans for downpayments and home fix ups is polspeak for never having to be repaid, again, pointed out by Ms Mendenhall in open council session.
      Buying votes ain’t cheap, for the taxpayer at large.