FY 96 Homeownership Zone
Baltimore, Maryland

AMOUNT OF AWARD:

Homeownership Zone Grant — $5,240,000
Section 108 Loan — $6,685,789

NEW HOMEOWNER UNITS:

236 (200 new construction, 36 rehabilitation)

COMPLETION:

February 2007

HOMEOWNERSHIP ZONE SITE:

The Sandtown Winchester Square Homeownership Zone (HOZ) is a 72 square block area in historic West Baltimore. It is bounded by North Avenue on the north, Pennsylvania Avenue on the east, Lafayette Avenue on the south, and Monroe Street on the west. It is located within the City's Empowerment Zone. At the time of the Homeownership Zone designation, the area had experienced significant disinvestment. There were over six acres of abandoned, rubble-strewn lots and 18 percent of the units were vacant. However, the area also had some strengths. In 1989, the Enterprise Foundation and BUILD, a local faith-based community development organization, joined with the City to rebuild the area. Over 1,000 units of housing had been rehabilitated or rebuilt, including 283 homeownership units funded through the Nehemiah program. A new community center had also been developed.

PROGRAM DESCRIPTION:

The City used its HUD Homeownership Zone demonstration grant to subsidize the development cost of 200 newly constructed 3 bedroom, semi-detached townhouses and the rehabilitation of 36 units in historic rowhouses. The new housing was concentrated in two development areas that were chosen to support previous investment in the area (in particular the Nehemiah housing units), provide affordable homeownership opportunities and help stabilize the area. The housing was developed in three phases in a series of small clusters on largely vacant land acquired by the City. Other development in the area included a charter school (K-8); rehabilitation of a City market; and street, alley and infrastructure improvements.

FUNDING:

PARTNERS:

PROJECT OUTCOMES:

Although the Homeownership Zone area is only marginally transformed, the new homeowners are helping to stabilize the area. The new residents report that they are happy with their homes. The Homeownership Zone project focused on small development clusters that addressed approximately 7 percent of the housing units in the area. The scattered development clusters created their own "market areas". From 2000 to 2006, median sales prices in the area increased by 28.6 percent, from $28,000 to $36,000. This is substantially less than the unit sales prices of $65,000 to $111,000. Nevertheless, the increase in sales prices reflects a positive trend. The physical design of the new units reflects the traditional row house style of the area. The following New Urbanist design principles were used: narrow streets and stop signs to control traffic; maintaining the network of interconnected streets; lining streets with building fa�ades; creating green space; i off-street parking; creating inter-block walkways to connect streets; and providing for a more heightened sense of a pedestrian community. The use of federal HOME funds to assist homebuyers required that no homebuyer exceed 80 percent of the median income, even though there was interest from households with higher incomes. As a result, the Homeownership Zone demonstration's goal for a mixed-income community was not achieved. In addition, many of the ancillary components of the Homeownership Zone strategy were not implemented. The federal grant leveraged $29,301,347 in other funds, but shifting City priorities reduced the City's financial commitment to the area. More intensive code inspections and enforcement to support the new housing development, resulted in an increase in violations but also led to more legal action to enforce code compliance. Efforts to improve the commercial area along Pennsylvania Avenue were unsuccessful.

INNOVATIONS:

• The City reorganized its acquisition process for derelict properties by focusing on code enforcement and withholding tax certificates, and restaffed the acquisition department to include attorneys, para-legals, and contract staff.
• Cost-savings were incorporated into the house designs by using standard door and window sizes, calculating room sizes to save on carpet costs, using 7 foot ceilings to eliminate a double course of CMU block, and siting the houses in the excavated area of the old foundations to reduce excavation costs.
• Two small row houses were combined into one unit to provide a more marketable, larger unit on the inside, while maintaining the historic appearance of the facades as two units. The entire historic street of rowhouses was rehabilitated at once for greater impact.

BEST PRACTICES:

• Using a design/build contract to reduce costs, create flexibility in the construction process and ensure good communication between the architect and the contractor.
• Using a limited number of select brokers who understood the Homeownership Zone project to facilitate the marketing of the Homeownership Zone units.
• Using preferred lenders who were familiar with the Homeownership Zone project to facilitate the approval of qualified low-income borrowers.
• Beginning construction after all sites had been acquired.
• Developing a shared vision among all partners.
• Developing a critical mass of new housing to help change perceptions about the Homeownership Zone subtarget neighborhoods.
• Using a long-term Master Plan to guide development decisions.
• Using an energy efficient design and Energy Star appliances to reduce long-term maintenance costs.

LESSONS LEARNED:

• Provide more upgrade options to potential homebuyers to discourage future refinancing.
• Design larger 2nd and 3rd bedrooms to accommodate growing families and older children.

AWARDS AND RECOGNITIONS:

• 2004 Governor's "Commitment to Excellence" Award for Neighborhood Revitalization
• 2005 HUD Secretary's "Best in American Living" Silver Medal Award for Excellence

Additional Information

• Project Contact
• MAP
• PICTURES