Thursday, April 22, 2010

A House Divided

By Todd Morehead

Every residential neighborhood in Columbia bears an individual flavor as varied as the folks who call it home, be it the Bohemian flare of Olympia, the stately old South feel of Elmwood Park, or the laid back charm of Rosewood. Though each neighborhood is as distinct as the next, the majority of them currently share one trait: they are dotted with “for sale” signs. Meanwhile, city-subsidized housing developments, resembling modern suburbs, are popping up around the city. While some of these neighborhoods are quickly colonized, others have sat virtually empty, giving the acres of new homes the feel of an abandoned movie set.
According to the Columbia Multiple Listing Service, used by licensed realtors to monitor overall property inventory, at press time there are 583 houses for sale in the downtown Columbia area under the $150,000 mark. And that number does not include “for sale by owner” listings.
Some are beginning to question the efficacy of new city-subsidized development in the name of affordable housing, citing a glut of existing homes already on the market and concern that new publicly-funded projects are competing against low to moderate income property owners who could use those monies to revamp existing neighborhoods. Yet, proponents of affordable housing say the development projects are key to revitalizing neglected neighborhoods and ensuring a stable downtown housing market in the long run.

“It really depends on the project, developer, the need, and the finished product,” says Howard Hunt, Broker-in-Charge, at Front Porch Realty in Columbia. “I don’t think [the development projects] have hurt my business as a realtor, but it has hurt other developers. If I was trying to sell a home as a home owner, then I would see it as flooding the market, which hurts sale prices.
Still, Hunt says he believes such development can be a plus, if it is successful.
“A new development adds a new tax base to the city if it is a successful development,” he says. “If it is not, the city loses money.”

[caption id="attachment_1476" align="alignright" width="265" caption="The city committed $3.5 million to infrastructure costs for The Columbia Housing Authority development project, Rosewood Hills. The homes are listed between $156,000 to $227,000. Photo by Todd Morehead"][/caption]

It is a gamble to be sure. A new tax base, in theory at least, can generate the needed tax dollars to further improve the greater area. Another school of thought is that the city could hedge that bet and improve the greater area right away.
Chris Barczak, a local realtor and former member of the city’s board of zoning appeals, wholly supports the need for affordable housing in Columbia, but says the city can foster it –and neighborhood revitalization, to boot—by supporting properties and property owners that are already here.

“Government should allocate monies towards infrastructure development such as street lights, water, sewer, and police,” Barczak suggests. “This will entice neighborhood renewal and public enterprise will follow it.”

Julia Prater, Deputy for Affordable Housing at the Columbia Housing Authority, says she believes the new developments are healthy for the city.
“I think the city’s investment in our [CHA-affiliated] developments was smart and important to the revitalization of residential neighborhoods,” Prater said. “I call it an investment, because as we demolish obsolete barracks style public housing that has never been on the tax rolls and develop a mix of housing that includes owner occupied homes, we are putting homes on the tax rolls and stabilizing neighborhoods.”

Tackling Affordable Housing

The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Most mortgage underwriters use a percentage near that range, as well, and will factor in other hardship variables. According to HUD statistics for 2009, the median income for a moderate- to low-income family of three in Columbia was $33,540 (or 60 percent of the median income for Richland County). Thirty percent of that total –or what percentage of the family should spend on housing—comes out to around $838 maximum per month. Using the current 5 percent mortgage rate, a moderate- to low-income family could pay as much as $1,107 per month for a $140,000 house, without the aid of a specialized loan program.

The Columbia Housing Authority development project, Rosewood Hills, lists homes generally between $156,000 and $227,000. That project seeks to mix affordable housing units with market rate units and the City of Columbia offers specialized loans to low-income buyers through the City Living program to help with the affordable housing component.

In June 2006, the City of Columbia created an Affordable Housing Task Force made up of members of the banking community, affordable housing advocates, developers, lawyers, neighborhood leaders and others. Their task: to study housing issues facing low-income residents.  According to a 2007 release by the group, Columbia enjoyed “a respectable amount of affordable housing” at the time of the report’s release. They found that, overall, the city was doing a good job on the affordable housing front.

[caption id="attachment_1477" align="alignleft" width="300" caption="Some developers can cash out big by utilizing city and government grants under the banner of building affordable housing. In 2006, Steve Benjamin, as the registered agent of the Village at Rivers Edge, LLC, pitched a plan to city council to implement an urban renewal development project. The City of Columbia committed $1.6 million to help defray infrastructure costs for the project and the Columbia Housing Authority secured a $10,000,000 HUD grant to help with the affordable housing component."][/caption]

“The National Association of Homebuilders (NAHB) Housing Opportunity Index released on August 22, 2006 ranks Columbia 34th in the nation in the availability of affordable housing and 4th in our region,” the task force release stated. Columbia’s ranking, coupled with the City Living low-interest mortgage loan program and the creation of city-affiliated development corporations, insured that two-thirds of the neighborhoods in Columbia are affordable places to live, they said.
Speaking to the demolishing of the Saxon Homes and Hendley Homes housing projects, the task force recommended the construction of new multifamily rental units in their place. Unlike their predecessors, these housing sites would be available on the open market and would “allow low-income families to access private-market multifamily units, by... imposing conditions on the sale of property owned by the city or its affiliated development corporations.”
The task force brought up the interesting factor of zoning, specifically “inclusionary zoning,” which requires developers to include a certain percentage of affordable housing in their development projects. The task force didn’t believe that mandatory inclusionary zoning would withstand the scrutiny of a court if challenged, so it recommended that the city adopt a policy of “voluntary inclusionary zoning” in targeted development areas. They suggested sweetening the deal for developers with incentives like increased density (more bang for the buck per acre); reduction of parking requirements; a rebate of a portion of water and sewer tap fees; rebates on permit fees and expedited reviews of plans, required hearings, etc.

The Village at Rivers Edge project, off River Drive, is a good example of an incentive deal, as the city granted a PUD-LS zoning variance to increase density and also agreed to finance the construction of its utility infrastructure.
Detractors of inclusionary zoning say it levies an indirect tax on developers, shifting the burden of affordable housing away from local government and onto the development community. Free market advocates question the practice of giving the aforementioned density incentive because it could create a glut of housing that burdens local government.

To analyze the overall housing market, the task force compiled and analyzed a huge amount of data, including population changes, outlying areas of residential growth, building permit data, the sale of existing homes, median home price, and income. They determined at the time of their report that although there has been rapid growth in the region at large, growth in the city had remained stagnate and showed that population growth had actually shifted away from the city center and towards outlying areas like Lexington. They determined that “the city does not need to encourage the development of more housing, but it does need to consider ways that it could encourage developers in the future to include a mix of income levels within their proposed developments.”

Julia Prater says her agency’s numbers echo the findings of the task force in terms of the demographic shift toward the suburbs.

“Median income buyers in recent years have been pretty much pushed out to the suburbs,” she says, “because new developments could offer much more affordable housing. This is because developers’ land and site costs were much more reasonable in suburban areas.”

At the time of the 2007 report, Rosewood Hills and the Village At River’s Edge were already moving forward.  It is important to note that the task force report was done prior to the worst of the economic downturn and resulting housing crisis. The housing inventory undoubtedly went up as homeowners went upside down on mortgages and banks foreclosed.

Enter the Developers

The City of Columbia has created four nonprofit development corporations to provide affordable housing and economic development opportunities in the city. The Federal Dept. of Housing and Urban Development (HUD) doles out funding for city development projects through a number of grant programs. These development corporations use funds allocated through one such program, HOME funds, as lines of credit. The development corporations can solicit funds from the city general fund, private funders, and other avenues.

A good example of a project green lighted and subsidized by the city under the affordable housing banner (in conjunction with the Columbia Housing Authority) is the Village at River’s Edge. Currently a 24-acre tract of undeveloped land off River Drive near the Broad River, the city approved Phase One of the project last month and granted the development a high-density zoning variance at its March 1 meeting.

The City of Columbia wanted to beautify and renovate pockets of low-income housing as part of the North Main Master Plan (circa 2005). The Roosevelt Village apartments, on what is now the Village at Rivers Edge, site was one of the areas in question. In 2006, Steve Benjamin, as the registered agent of the Village at Rivers Edge, LLC, pitched a plan to city council to implement an urban renewal development project on that land. His project would feature 128 single-family homes, 100 town homes and 66 condos/apartments. He asked for the city to help defray the cost of the development.

The city approved the project at a September, 2006 meeting so long as 50 percent of dwellings were for buyers at 80 percent of the Area Median Income (AMI) and 50 percent were for folks at 80 to 120 percent the AMI. The city agreed to help with the design and cost of infrastructure.

In September 2009, the city issued Resolution R-2009-075, which officially committed $1.6 million to its overall funding obligation. The agreement states that the city must “repay the funds back to the Section 108/EDI funds administered by the City of Columbia’s Community Development Department.”

The funds will be used for streets and storm water management, according to the   Columbia Housing Authority.

Benjamin removed himself from the Village at River’s Edge, LLC after he announced his run for mayor. He reportedly sold his share for around $492,000.

If the Village at River’s Edge is an example of an affordable housing project in its infancy, the Rosewood Hills development is an example of such a project when it comes out the other side.

According to the Columbia Housing Authority, the development boasts 60 single-family homes, 32 town homes, and 22 duplex units, as well as a 52 unit senior apartment complex. The rental units are a mix of affordable and market rentals.  Of the 60 homes, 41 were planned to be sold to the public at market rate and the remaining 19 would be set aside for affordable housing units for homebuyers at 80 percent of AMI ($49,700 for a family of four). The city committed $3.5 million to infrastructure for that project, according to the Columbia Housing Authority.
The neighborhood, completed at the apex of the housing crises, sat mostly empty for months on end. Sales in the neighborhood appear to be on the upswing, however, and Russell and Jeffcoat Realtors recently took over the contract to market the homes.
City Paper inquired about the sales figures coming out of Rosewood Hills to a Russell and Jeffcoat realtor involved with sales there, but has not received a response at press time.
A homeowner in Rosewood Hills who asked not to be named, said it seems to him like home sales are on the rise in his once deserted neighborhood since Russell and Jeffcoat took over.
“I’m not a realtor, but from a consumer standpoint, Russell Jeffcoat [sic] is a recognizable ‘brand.’ They probably have more of a customer base to pull from, which is why they’re selling these homes so quickly,” he said. “Of course, it could also be that the market is finally taking a turn.”

Regardless of your opinion on the development projects, the homes are built and they are here to stay. Whether realtors can continue to fill them all remains to be seen and until the housing market fully rebounds, the argument over continued development will carry on.
“[The CHA] has been able to partner with the city due to a few unique opportunities of significant in-town parcels of land and significant HUD Capital Fund Grant monies we were able to bring to the table,” says Prater. “Those stars don’t align very often and there aren’t many large open parcels of land left in the city, so I don’t know that it is a model that could continue to be replicated.  I think the developments that have been done are sustainable and successful.”
Howard Hunt suggests that those concerned with new development and how it affects their property should take a proactive stance.
“A neighborhood with a new project coming in should get involved and see who is charge, what roles the city is taking on, and what it could do to existing home values and sales... the impact on schools and utilities, and its economic sense,” he said. “We cannot assume the city is doing this for us.”


  1. Susan Broome AdamsApril 22, 2010 at 2:44 PM

    The fact that Benjamin did not ever share his accounting for the project but claimed he made no profit was one concern I had about his candidacy. Another was how he would reconcile the conflict of interest since his wife is a city judge and the mayor and council are her bosses.

  2. hmmmmmm the ol double dippin.......the plot thickens. now it will be interestin to see how his incident gets swept under the rug

  3. Great survey, I'm sure you're getting a great response. City Index forex review

  4. With global interest in cryptocurrency trading at an all-time high, a number of investors are looking to cash in on the ongoing crypto boom that is sweeping the world right now. And even though the market seems to have stabilized over the course of the past few days, many pundits are of the opinion that currencies like Ethereum, XRP, Bitcoin Cash, Litecoin will scale past their ATH values with ease by the end of 2020. Auto crypto bot.

  5. I am always searching online for storys that can accommodate me. There is obviously a multiple to understand about this. I feel you made few salubrious points in Attributes moreover. Detain busy, awesome career!

    Vedic Astrologer Usa,
    California Astrology Horoscopes,

  6. I am happy to be here and this wonderful article. I've found here a lot of interesting information for my knowledge I want. everything you provide to us, it was very helpful and useful, thanks a lot for sharing this phenomenal post.

    Top Best Famous Feng Shui Online Consultations in Jhalawar,
    Top Best Famous Gemologist in Beawar,
    Top Best Famous Ex Back Specialist in Bundi,
    Top Best Famous Horoscope Readers in Ganganagar,

  7. Fantastic weblog! Is your topic customized produced or did you obtain it from somewhere? A design like yours with a few basic adjustements would really make my website stand out. Remember to enable me know the place you obtained your design and style.…

    Get Ex Back,
    Top Astrologer in Hong Kong,
    Expert Astrologer in Denmark,
    Best Astrologer in Finland,
    Ask Expert Astrologer in Costa Rica,