Affordable housing becomes reality on Swinburne Street
The Church Community Housing Corporation of Newport County provides home ownership opportunities for qualified families with low to moderate incomes. The three single family homes to be built on Swinburne Street in Jamestown are an example of the program.
CCHC Senior Project Manager Brigid Ryan said that Jamestown “was very accommodating” and over time has been “incredibly supportive.” Ryan acknowledged that the high cost of real estate in Jamestown is a challenge but she said that, “The community of Jamestown has really stepped up having created the Affordable Housing Trust Fund.”
Without the fund, Ryan said, “This project would not have happened.” The trust fund, which is administered by the Jamestown Affordable Housing Committee and the Planning Department, is the aggregate of a $50,000 annual town budget affordable housing line item that accumulates between projects.
Following federal guidelines, families who earn 80 percent or less of the area median income and have good credit may qualify for a mortgage (interest and taxes included) that is equal to, but not greater than, 30 percent of the family’s gross income.
Since 1994, CCHC has been providing home ownership using the Land Trust Program that excludes the land value in the ownership equation. Homeowners own the improvements only. CCHC retains the ownership of the land. Ryan explained that because the funding for the home is derived from a variety of community sources, building an affordable home is “creating a community asset.” She added that leasing the land protects the community asset.
Ryan said that the Land Trust Program “protects the affordability [of the property] in perpetuity.” She added that simply restricting the deed, the method of insuring affordable for succeeding homebuyers before 1994, was insufficient.
She described the current land lease process in detail: “A homeowner, who is income qualified, gets a mortgage from a traditional lending institution and buys the improvements only and we retain ownership of the land. We enter into a ground lease agreement, they have rights to be on the land and it’s a 99-year lease.”
The model is currently found more often in commercial real estate, according to Ryan, but she added that the model was used extensively in the 1970s and 1980s in Vermont for affordable housing.
Executive Director Steve Ostiguy helped to bring the concept to CCHC 17 years ago. Since 1994, CCHC has developed 90 units using the land lease model.
Of the 90, six single family homes in Jamestown are part of the Land Trust Program. The homes – located on Cole Street, Narragansett Avenue, Garboard Street, North Main Road, Pemberton Avenue and Sloop Street – will soon be joined by the three single family homes yet to be built on Swinburne Street. It is important to note when they are building new construction as they are for two of the Swinburne units, that the CCHC prefers to convert existing homes into affordable housing. They do not build spec houses. Three-bedroom lot appropriate houses are designed but construction will not begin before a homeowner is qualified and selected. The homeowner has a role in the final selection of finishes.
Ryan was quick to point out that affordable housing “isn’t meant for speculation. It’s really meant for long-term home ownership for people who are from the community and work in the community, to make a place in our community.”
A formula that includes an appraisal of the improvements and takes into account the affordability criteria of 80 percent of area income and a mortgage payment not to exceed 30 percent of that income yields a selling price in the event of a resale. Ryan pointed out that the resale values of the houses are subject to the markets. In an economy where salaries are increasing and house values are increasing, the seller is far more likely to realize a capital gain from the sale.
She said that the best way to insure growing equity and the highest possible resale is to buy the home, keep it for a long time, pay down the mortgage and take excellent care of it.
“It very much mimics the market but what we do is take it down a notch,” she said. “We create a mirror market in which [more] people can participate in,” she said. CCHC sells a three-bedroom house for approximately $150,000 and mortgage payments are based on mortgage interest and taxes.
Since 1994, resales have averaged about one per year among the 90 units that have been built and sold using the Land Trust Program. Perhaps more extraordinary, particularly given the current mortgage banking environment, is the absence of any foreclosures among the 90 homes.
The lack of foreclosures to date is undoubtedly due in part to the qualifying process that includes required classes in homeownership. Ryan said that CHHC homebuyers want what most people want. “A stable place to live, they want to be a part of a community, and they do want to make an investment.”
CCHC does whatever it can to help buyers maintain ownership. Beyond preparing buyers for home ownership, Ryan explained that CCHC provides support for its homeowners all of the time and especially during tough times. Regular communication includes the use of e-mail and newsletters, and programs include budget advice and counseling, low-interest repair loans, and access to community resources.
Besides home sales, CCHC also builds or rehabilitates rental units, a total of 800 throughout Newport County. The same affordability guidelines apply to those who seek to rent from CCHC or the various housing authorities that manage the properties.
In Jamestown there are a variety of affordable homes and apartments in which CCHC has had a hand. Pemberton Apartments – 12 units of affordable housing for persons 62 years or older – were co-sponsored with the Jamestown Housing Authority. In addition, CCHC operates Bay Side Apartments, which are 20 family apartments on Conanicus Avenue. Six of those units are currently being rehabbed.
Vigorous efforts by CCHC and other organizations including Jamestown Housing Authority, Bridges and East Bay Community Action Program, continue to be made to increase the number of affordable housing units to reach the state mandate which requires the number of affordable housing units to be equal to or greater than 10 percent of the total number of housing units in any given municipality.
The lack of affordable homes in Jamestown impacts the community by preventing those whose salary is typical of teachers, firefighters, town employees and police, who cannot live in the town in which they work.
The cottages at Swinburne, designed by the Jamestown firm Ronald F. DiMauro Architects, will stand on three lots sized similarly to the neighboring lots. Currently, plans include renovating the existing house (approximately 1,100 square feet) and locating two 1,200-squarefoot cottage style homes to the west of the original house.
Applicants must first be graduates from the homebuyer education program, an eight-session course. More information is available at CCHCNewport.org.
CCHC will hold an information session regarding the Swinburne homes and the Home Buyer Training Program on Wednesday, July 20, at 7 p.m. at the Jamestown Philomenian Library.