Baltimore administrators panned City Council President Nick Mosby’s proposal to revive the Dollar House program, suggesting Tuesday that it duplicates existing city services and doesn’t offer enough financial support for homebuyers.
The plan, introduced by Mosby in November, calls for a return of the Dollar House program, which gave away city-owned houses in the 1970s for $1 in exchange for homeowners renovating and living in them.
Unlike the original Dollar House program, Mosby’s plan calls for targeting longtime residents who have been renting rather than owning. The plan also is targeted at homes in underserved areas of the city left behind by the racist mortgage lending policies of the past.
Baltimore administrators got their first chance Tuesday to speak publicly about the proposal. Leaders in the city finance office, as well as the Department of Housing & Community Development and the Mayor’s Office of Children and Family Success, oppose the legislation. Baltimore’s law department said previously that it believes the bill violates the city charter.
Alice Kennedy, the city’s housing commissioner, highlighted numerous concerns with the proposal, which she said does not take into account the access to financing that city residents would need to complete renovations on the newly purchased homes.
The original Dollar House program offered low-interest loans to city homebuyers. Mosby’s proposal offers home repair grants of up to $25,000 that can be coupled with the $1 purchase of a house. Kennedy said that falls well short of the $100,000 to $300,000 needed to renovate some of the city’s vacant homes.
“Based on the restrictive nature of the location of properties as proposed in the legislation, the cost of rehab is greater than area sales prices,” Kennedy wrote in an 18-page memo to the council.
Buyers would immediately be underwater, owing more than their homes are worth, she added.
Other community housing experts offered similar input during a previous meeting on the proposed legislation. Several questioned the willingness of banks to finance loans to residents in the targeted neighborhoods.
“One of the key pieces is ensuring residents have access to that capital for renovation loans that would be necessary,” Kennedy told council members Tuesday.
As proposed in Mosby’s legislation, the city would maintain a registry of city-owned vacant homes eligible for the program. Those homes would need to be in neighborhoods deemed overlooked by investors or historically subject to redlining, the often racially motivated denial of loans and other services to communities considered less desirable.
Eligible neighborhoods would have to have “assets” that can be a hub for revitalization, such as public markets, transit corridors or emerging development activity, according to the bill. City housing officials would choose the neighborhoods; they are not specified in the bill.
Buyers would first lease the property for two years at a cost of $1. They would have that time to renovate the properties using financing from groups independent of the city. Buyers would be required to occupy the homes within six months or seek an exemption from the rule.
In addition to her concerns about funding, Kennedy told members of the City Council on Tuesday that Mosby’s proposal would duplicate other city services already available. For instance, Baltimore already has a public-facing registry of city properties available for purchase as the legislation requires. Grant programs are already available for home repairs, she said.
Mosby said he doesn’t see the program as supplanting existing programs, but instead supplementing them.
“More needs to be done,” Mosby said. “It’s not that it’s duplicative. It’s that it’s a supplement. It’s not that it’s restrictive. It’s that we want to hone in on the areas that have been disinvested in for far too long.”
Council Vice President Sharon Green Middleton said some of the city’s existing housing programs aren’t getting the job done.
“The programs that were already in place have problems,” she said, singling out the city’s weatherization assistance program.
Kennedy said the city’s funding for weatherization was reduced due to the coronavirus pandemic. She acknowledged that existing city programs would be more effective if they received more robust funding.
Middleton argued the American Rescue Plan offers the money to help. Mosby has said publicly that he wants to use $200 million of the $641 million awarded to Baltimore from the federal recovery program to fund the Dollar House revival and accompanying bills.
“There are all these different funding sources,” Middleton said of the city’s current housing programs. “Here we have one that can help and really hone in on the main problems.”
Mayor Brandon Scott controls the city’s American Rescue Plan spending and has not committed to funding the program.
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Shamiah Kerney, director of the city’s Office of Recovery Programs, said funding from the federal program generally ca be applied to housing-related expenses. The program’s rules also encourage a focus on low-income residents and people of color, she said.
However, more specific concerns remain, Kerney said, about whether the funds can be fully spent by the 2026 deadline and whether there could be a duplication of benefits for recipients of U.S. Housing and Urban Development funds.
Baltimore Budget Director Bob Cenname told council members it would cost about $2.3 million annually to administer the programs. An additional $13.8 million would be needed annually to pay for the proposed home repair grants, he said.
“The assumption is this could be paid for with [American Rescue Plan] funding, but I don’t think we’re ready to commit to that at this point yet,” Cenname said.
And the city’s general fund would be unable to absorb the cost, he said, particularly with increased costs for education on the horizon in association with the Kirwan education reform legislation.
Mosby, who left Tuesday’s virtual meeting before many city agency representatives had the chance to speak, remained positive about the bill despite the opposition, telling Kennedy that they were “more in alignment” than it might seem.
“I think we are in agreement that more funding is needed to support the programs that already exist,” Kennedy said.