11/01/1978 Meeting - Laserfiche WebLink

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I Mr. Delay, a member of the CDC, felt this was a workable solution to address the goals of the CD Act and the neighborhood. He said this e was a unique situation. Mr. Osborn noted that under the Westside NIP, there is a land banking program. He said the land now in the program is all vacant, but there will be disposal of other properties some time in the future. However, he noted, this was would not be high-volume business. Steve Wood, 271 West 10th Avenue, representing the Westside NIP, said the group was supportive of the staff's proposal and hoped Council would approve. Mr. Obie agreed in concept with the proposal. However, he felt the house did cost more than needed, and perhaps could have been developed in a manner that would allow a lower-income family to occupy it. He hoped the City would not get into a great deal of this type of business. He was also concerned regarding no down payment, noting that a down-payment requirement would attract a permanent resident and show the credibility of the buyer. He did not agree with the policy of subsidizing the interest rate on the second loan. He felt the City should get at least the same amount of money back as it has to borrow and should not subsidize interest. He also felt the City should share in the increase in market value or collect some sort of interest for the third loan. Mr. Delay said the CDC had had considerable discussion regarding the down payment. There would be closing costs so the buyer would need some money e up front. It was also noted the family probably would have little savings for front-end costs. He felt the plan as presented could accommodate Mr. Obie's concerns regarding the down payment. Mr. Osborn had also said the three-percent interest on the second loan was an attempt to stay within the 25- to 30-percent gross monthly income of the family. However, he noted that the loan term could be extended to keep the payment down. In regard to no interest on the third loan, he said this was an attempt to find some method of encouraging an owner/occupant status, and this could be that incentive. Mayor Keller wondered whether the City was in the business of creating an opportunity without protecting the public's best interest. He won- dered if this proposal would really benefit the people the City wishes to have occupy this house. He said it appears a person could buy the home and see the opportunity to make a few dollars, and thus, sell the home. Mr. Delay responded that the proposal was an attempt to create an oppor- tunity for a family who would not be able to compete in the normal market for a single-family home. He said it was true that there might be some appreciation on the home, but the family would have to sacrifice by going back into the normal homeownership market and that might be more of a burden than'the family could bear. Mr. Delay suggested that perhaps staff could bring back a proposal for mechanisms to discourage premature resale. e 11/1/78--8 11~