Sept. 26, 2018 — Last week, the City of Florence and the Neighborhood Economic Development Corporation (NEDCO) announced the next step in Florence’s journey to affordable housing — a community land trust development on Airport Road.
At the Sept. 17 Florence City Council meeting, City Recorder Kelli Weese said, “I am very pleased to announce that we received the grant for the Affordable Housing Project at the Airport Road site. NEDCO applied for the grant and we are just a partner with them, but it is very thrilling to see that come to fruition.”
Florence Mayor Henry said he was “enthused” about the project and the ramifications for more housing opportunities in Florence.
“We are doing a lot about housing in the city. I’m enthused with the NEDCO project, the Habitat project and even the project with the churches, simply because it indicates that we are doing something to help with the affordable housing issue,” he said. “Stay tuned, because there a whole number of other things in the works that will have an impact on our community.”
City staff members have been working with NEDCO staff since Jan. 5 to develop a plan for affordable housing in Florence at 1424 Airport Road in Florence, currently occupied by the Florence First Harvest Community Garden. At a lot size of 1.73 acres, or 73,359 square feet, and with multi-family residential zoning, NEDCO and Florence identified the site as an ideal piece of city property to form the area’s first community land trust.
Community land trusts legally separate the land from the structure, which can keep prices down. NEDCO plans to build 12 cottage-style homes on the lot, ranging from one- to three-bedrooms, along with parking and shared green spaces. Similar to the condo model, individual homeowners then apply for their own mortgages.
In June, NEDCO applied to the 2018 Oregon Housing & Community Services Local Innovation Fast Track (LIFT) grant for affordable housing. As part of the application, the City of Florence showed community buy-in with the transfer of the Airport Road property, valued at $238,371, to NEDCO.
Through LIFT, developers receive up to $75,000 per unit to pay for development costs associated with land acquisition, infrastructure development, system development charges and other costs not associated with the housing units themselves. In return, the homes must be maintained as affordable for at least 40 years and sold and re-sold to homeowners below 80 percent of the area median income (AMI).
According to NEDCO Grants and Communications Manager Mackenzie Karp, NEDCO will fund the rest of the project through a construction loan at market rate, which will be paid off as homes on the site are sold through mortgages.
“This is the state really wanting to make homeownership accessible for people in this income bracket who are Oregonians and who are going to live in these homes in these communities,” Karp said. “It’s a really awesome thing. We’re hoping with this allocation of funds that it is going to be a continual source of income for this kind of development.”
On Sept. 18, Karp and NEDCO Asset Building Supervisor Luis Mendoza held an information meeting at Siuslaw Public Library for potential homebuyers and community partners. They talked about the community land trust model and NEDCO’s history, current programs and what it plans to do in Florence.
“The goal is to make homeownership achievable for households with low incomes and to help them build assets over time through a shared equity model,” Karp said. “And by separating the house from the land and holding the land in trust, the homes will be permanently affordable for generations of homebuyers to come.”
According to the city, Oregon defines “workforce housing” as households within 60 to 120 percent of the average median income of the county. NEDCO will be working with individuals and families who make up to 80 percent of the county’s AMI. Per Data USA, Lane County has a median household income of $47,318. Eighty percent of that would be $37,854.
“I think everyone in this room knows how vital affordable housing is for economic development,” Weese said at the Tuesday meeting. “It’s a vicious cycle of the need for housing and the need for jobs.”
NEDCO is Oregon’s oldest community development corporation, founded in 1979, and works in four main areas: asset building, affordable housing development, community economic development and community development lending.
“Basically, we do a lot of work in helping Oregonians and communities and neighborhoods to build assets and financial stability,” Karp said. “This project will really be bringing us back to our roots in homeownership. In the last decade, we haven’t had the funding mechanism in place to really do that. We’re so excited to have the grant available through the state to help us make homeownership opportunities available … for moderate income families who are priced out of the current market.”
The nonprofit specializes in financial literacy classes and one-on-one mentoring, helping people take control of their futures and learn how to save and invest.
“We’re going to have a series of free workshops for interested buyers,” Karp said. “It will be a crash course in a little bit of financial preparation for homeownership, classic homeownership education classes and about community land trusts and some of the particularities around their mortgages.”
Florence’s first NEDCO homeownership workshop, focusing on the community land trust model, will be on Tuesday, Oct. 16, from 5:30 to 8 p.m. at Siuslaw Public Library, 1460 Ninth St. People can register at nedcocdc.org/ahcltw/.
While NEDCO’s initial financial workshops in Florence primarily will be available to those interested in the Airport Road community land trust, Karp said future classes could include more people.
“This first round of workshops will be focused on this development and getting prospective buyers ready for homeownership,” she said. “However, as we are doing outreach around the land trust, we are learning so much more about the community needs, and I think more general financial literacy and homeownership educations classes on-site will be in the works soon.”
Also in the future, Karp hopes to bring NEDCO’s employer-based financial education program to bring financial literacy into the workplace as part of the regular work day.
“We are working on building those partnerships with employers in Florence,” she said.
Partners — with the state, area cities, housing services such as St. Vincent de Paul and Habitat for Humanity, mortgage lenders and contractors — are important to NEDCO’s goals and its timeline. The nonprofit will be going through the City of Florence land use process this fall and winter, with construction on the Airport Road projected to begin in March and early spring 2019. If all goes well, the selected families will be able to move in by this time next year.
“The timeline is really interesting and nice because that is a year from now,” Weese said. “People have a year to get their credit score figured out, to work with NEDCO on counseling and to figure out how to qualify and pay for their mortgages. That’s a long time to fix any of your financial woes.”
In the next months, Mendoza said he and his staff want to help clients with education and preparation.
“We’re coming to your community right now saying, ‘We’ve got plenty of time to prepare some of your numbers to be ready,’” he said. “Part of what we’ll do in that nine months of lead time before these houses are ready to be sold is get people into our program to work on stuff like their counseling, building their credit score and getting them ready.”
He emphasized that NEDCO knows that its services won’t be the right fit for every situation. Some people won’t income qualify, some people want to own land and some might not be able to qualify for a mortgage.
In the end, NEDCO seeks to help people build their own assets and equity by identifying a goal and starting to save.
“Part of the hope of this project is that we’re really able to lift people up and help them through a lot of these processes,” Karp said.
A lot can get done in nine months — especially for City of Florence and NEDCO staff who worked to apply for LIFT and other grants for this project.
“We want to build so much housing in Florence!” Karp exclaimed. “This will hopefully serve as a model. By using other funding mechanisms, working with the city and being creative, hopefully we’ll be able to do it in other ways that are more flexible and serve different communities, such as seniors. We’re hoping this is a smashing success that will serve as a great model in this community.”
For more information about NEDCO, attend the next Florence meeting on Oct. 16 or visit nedcocdc.org.