On the consent agenda for the next meeting of Asheville City Council is a request to change the terms of a contract with Habitat for Humanity for constructing affordable housing on Brotherton Avenue. In 1999, the city bought the 7.19 acre tract with the hope of selling it for an affordable housing project. The city spent $527,000 in federal CDBG dollars to buy the land and prep it for development. The city then selected a developer to construct 30-32 condominiums for low-income families. The developer had to abandon his plans when he couldn’t get enough pre-sales from people of the right income level to secure a loan from a bank.
The city then resold the property to another developer. This time, 44 condominium units would be constructed, 18 of which would be affordable. Two years later, the second developer had to quit, saying he could not meet the terms of bank loans or otherwise turn a profit with escalating costs – even if the city were to give him the land for free.
The city then asked Habitat for Humanity to please develop affordable housing on the land. Habitat proposed constructing a 22-unit development for $5000 down and $462,500 payable ten years after the date of closing. Since then, Habitat crunched the numbers on its vision. They will be asking council Tuesday to waive the balloon payment requirement and instead allow payments to be deferred so long as the housing remains occupied by persons earning 80% of median income or less. The CDBG investments are considered a sunk cost, since Habitat’s plans call for redoing the groundwork.
Wantonly spewing euphemisms in double-speak that insinuates government controls create sustainable and liberty-promoting scenarios, the staff report states:
The provision of third mortgage financing helps ensure the sustainability of the affordable housing created through this project while not prohibiting free-market sales of the homes.
