City encouraging homeownership through new programs
By Katharine Wilson
The College Park City Council is keenly focused on ways in which the city can attract new home buyers and encourage residents who already own homes here to stay. Indeed, the council set this focus as a specific goal in the current strategic plan for the city: to “foster and sustain an affordable and stable City for individuals and families to live, work, play and retire here.” The city’s effort is aimed, in part, at achieving a better balance of homes that are rentals and those that are owned by residents.
According to census data, the percentage of College Park’s residents who rent their home increased by 8% between 2010 and 2019; today, the majority of homes in the city (56%) are rented, not owned. In light of this, the council is examining ways to increase the number of owner-occupied homes in the city. “It’s not against the renters. It’s just the added benefit of stabilizing the neighborhood,” Councilmember Fazlul Kabir (District 1) said. Kabir also noted that established homeowners are more likely to invest themselves in their community.
“Homeowners simply have more skin in the game than renters, who’d have the option to move, were the city to decline,” Whitney noted. College Park has a shortage of affordable housing and a significant population of renters, most of whom are students at the University of Maryland.
The council recently decided to make adjustments to the existing New Neighbor Homeowner Grant Program. These changes would offer potential home buyers $5,000 to offset closing costs, providing they agree to stay in their home for at least five years. The overarching goal is to encourage home buyers to establish themselves in properties that were formerly rentals.
The current program has a number of eligibility requirements that could be modified under the new proposal. To be considered under the existing program, a property has to have been a rental for at least two of the previous five years or it must be a newly built home, or a short sale or foreclosure. Property owners must meet eligibility requirements, too: County police officers, and university and city employees who buy a home within city limits are eligible to apply.
Under the new proposal, though, any house in the city would be eligible for consideration, not only those that were previously rentals. An additional $5,000 could be granted if the house had previously been a rental for two of the previous five years or if the house had been owner-occupied and portions of it were rented to more than two people at the same time. The hope is that by easing certain requirements, the grant program will attract more home buyers. However, a number of suggested changes to the proposal are still being discussed by councilmembers.
Some councilmembers did not support eliminating most of the eligibility restrictions. “My concern is that opening the grant to all home buyers intending to live in their homes might quickly exhaust program resources,” said Whitney, who was in favor of limiting eligibility to certain career categories and to individuals who work in College Park or portions of the Discovery District that legally lie within Riverdale Park..
To adjust for increased distributions through the grant program, the council is planning on increasing the program’s annual budget from $50,000 to $100,000. The program has typically dispersed about half of its budgeted funds, which largely reflects low levels of available housing eligible for inclusion in the program. Sixty-nine homeowners have received grant disbursements since the program was established, in 2005.
Kennedy said that the new grant program, if approved, would likely be incorporated in the proposed Community Preservation Trust. (Note that Kennedy is chair of the city’s preservation trust workgroup.) The trust would operate under the auspices of the College Park City-University Partnership.
The Community Preservation Trust, if approved by the council, would be funded with a $3 million investment from the city, using the American Rescue Plan Act of 2021 funds. Additional state and university contributions would increase the intended total to $10 million. The trust would purchase homes through the College Park City-University Partnership and match them with qualified buyers, who would be able to purchase the homes at below market-value prices. The trust would get first right of refusal if one of these homes later goes up for sale.
“The purpose of the trust is not really to make money; it is to help the new neighbors to own a home affordably,” Kabir noted.
The grant will be discussed next at the Mar. 15 worksession.