Preserving affordability downtown

Planning the future for ourselves is not easy; doing it for a community is even harder. A few years ago when home prices were skyrocketing, the need to develop a plan to provide housing that is affordable to the working families of our community was voiced loud and clear and thus the North Idaho Housing Coalition (NIHC) was formed to address that need. While prices have calmed, there is still a need to plan for the future.

As executive director of NIHC, I made a presentation to the LCDC board on Nov. 17 relating to planning for the future of our downtown neighborhoods. We asked them to consider this question: "Is it beneficial for a community to have housing that is affordable to its workforce in its downtown neighborhoods?"

Based on what we have heard from the community, we believe it is and we are concerned that as downtown Coeur d'Alene continues to improve and become a wonderful and unique place to live, the neighborhoods will become too expensive for the working families of our community. Maybe that won't happen; some people think it won't, and some people think that it doesn't matter. We understand that. The Press article generated many comments, both for and against this suggestion, and a lot of questions. Below are answers to the most common questions; we would be happy to discuss this in more detail with anyone who is interested.

How would the LCDC donation be used?

The funds would be donated to the Home Partnership Foundation (Foundation), managed by the Idaho Housing and Finance Association, to revitalize neighborhoods and preserve the affordability of chosen homes within the LCDC district. The Foundation would grant the funds to a local housing organization - such as NIHC - to purchase and repair older homes, which benefits the neighborhood and the community. After the home is renovated, it is appraised and if the fair market price is within the price range that the average working family in Coeur d'Alene can afford ($120,000 - $180,000), the home is sold at market price to such a family, or individual, as a primary residence (not an investor to rent). If the appraised value is higher than what the average working family can afford, a second mortgage is provided from the Foundation to cover the gap. The homeowner gets a mortgage for what they can afford and is able to live in a home/neighborhood that they could not afford without the second mortgage from the Foundation (they do not make payments and are not responsible for the second mortgage). In either case, the home is purchased at fair market rate and the buyer does not receive any funds from the program. Additionally, the buyer pays all of the taxes on the property.

Whenever that family moves and sells the home, they receive the appreciation on their mortgage amount, and the Foundation is paid back the original amount of the second mortgage, along with any appreciation, to be used for another home. Again, at fair market rate to qualified buyers.

How do you know this will work?

Programs similar to this are used throughout the country. There are a number of things that make this program work so well: 1) homes are purchased and sold at fair market value; 2) funds are used to improve existing properties; 3) funds continue to grow as housing prices appreciate; 4) the property is taxed at fair market value.

The North Idaho Housing Coalition was fortunate to receive a $1.5 million Neighborhood Stabilization Program grant in 2009 to purchase foreclosed homes, renovate them and resell them to qualified community members (not investors). We are about 2/3 of the way through that grant and have fixed up and sold 22 homes to wonderful families and individuals.

While there are differences between that program and what we proposed for LCDC, the overall goal to revitalize neighborhoods and enhance homeownership opportunities at prices that are affordable for the working families of our community is the same. This is a mutual goal for NIHC and LCDC.

Lori Isenberg is the executive director of North Idaho Housing Coalition. You can contact Lori and the board of directors at (208) 665-4663 or lori@northidahohousing.org.