Another plank for smart growth Low-rate mortgages: Bolstering homeownership will help revitalize older neighborhoods.


WE WILL SOON discover whether providing $40 million in low-interest mortgages to homebuyers in communities such as Anne Arundel's Brooklyn Park and Baltimore County's Gwynn Oak is an effective preservation tool.

Last week, 34 communities in Maryland, from Salisbury to Cumberland, were awarded grants designed to shore up established neighborhoods that are beginning to decline.

The thinking behind the program -- part of Gov. Parris N. Glendening's farsighted "smart growth" initiative -- is sound. Since homeowners have more at stake in their neighborhoods than renters, financially and often emotionally, creating more owners should help stabilize older neighborhoods. This program provides the powerful incentive of low-cost mortgages for people to obtain their stake in those communities. Good schools and safe streets, of course, must be part of the equation, too.

Mortgages with below-market interest rates -- 4 percent, in this case -- should encourage prospective homebuyers to seriously consider properties in Anne Arundel's Pumphrey, Patapsco Park and Linthicum Heights and Baltimore County's Dundalk, Riverview and Hillendale neighborhoods.

Maintaining these neighborhoods has beneficial effects -- and not only for the families living in these neighborhoods. A strong resale market preserves values for all property owners. In many deteriorating neighborhoods, people who have owned homes for long time see their equity disappear as the neighborhood and property values decline.

If values remain strong, so does the overall tax base, which generates the property tax revenues that finance county operations. Sustaining a strong tax base can help keep property tax rates stable. Strong communities also require fewer of the costly public services -- increased police protection and social agencies -- that declining neighbors require.

Preserving these neighborhoods in the long run also dampens the pressure to continue building outward, destroying the region's farms and forests, in turn spoiling the Chesapeake Bay. If this program works as planned, everyone wins -- from the family making a home for itself with a low-interest loan to rural residents who want to save their green spaces.

Pub Date: 12/08/97

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