City Raises Aid for Renters Who Buy
Thursday, June 2, 2005
In an effort to make homeownership a more attainable goal for some of Alexandria's most vulnerable apartment dwellers, the City Council voted last week to increase financial assistance for home buyers.
The decision comes as thousands of apartments in the city are being converted to condominiums, potentially displacing renters, many of whom cannot afford to purchase their dwellings, officials say.
About 8.7 percent of the city's rental units in multifamily buildings -- about 2,353 -- have been converted to condos or are in the process, officials say.
Rather than see those renters forced out, the City Council voted to change the Moderate Income Homeownership Assistance Program, which provides money for down payments for the purchase of homes in the city.
The council agreed to increase from $20,000 to $40,000 the amount that residents whose apartment buildings are being converted to condos can borrow if they buy the unit they live in or one in their building.
"There are a range of folks who basically needed the assistance," said Shane Cochran, chief of Alexandria's housing division. "Their incomes are too low to qualify for the mortgage needed, but their incomes are too high to qualify for [low-income] assistance programs. We're trying to fill that gap."
City officials said renters are being given the state-mandated right of first refusal to buy their units before they are converted, assisted in some cases by a 2.5 to 5 percent discount offered at the developer's discretion. If they choose to leave, renters receive relocation assistance funds, which city officials said are required under state law.
In a real estate market in which sales prices are rising more quickly than rents, condo conversions are a lucrative business.
Orion Residential, which has offices in Seattle, Phoenix and Chicago, owns the EOS Twenty-One development of 1,524 apartments on Van Dorn Street, across from Landmark Mall. The company is in the process of converting 344 of the units to condominiums.
Orion's chief financial officer, Daniel Gumbiner, said it was an easy decision.
"It's good business these days," Gumbiner said. "If you do it right and buy right and develop right -- because there's a shortage of housing in the market and the single-family home prices are a lot more than condos -- it's very profitable."
Alexandria Mayor William D. Euille (D) said the conversions are happening more quickly than the city would like, making it tough for some residents to find other housing.