City Raises Aid for Renters Who Buy

"We'd like to think they'd find something else in the city, but the odds are remote and they'd probably go elsewhere," Euille said. "This program is a tool we're making available to our citizens and residents to encourage them to live and work in the city."

The council also adopted changes to the program that affect participants who want to buy a home unrelated to a condo conversion. Those buyers may now receive up to $30,000 in assistance, an increase of $10,000.

In both cases, buyers use the money as a no-interest, deferred-payment loan that is repaid to the city if the property is resold or 99 years pass. The limit on the amount the buyer can spend is $399,600.

Buyers are required to put $3,000 of their own money toward the purchase. Salary is also a qualifying factor.

Last week, the City Council approved an increase in the maximum income for eligible residents, raising the limit for a one-person household to $71,440 from $68,000. The two-person household limit was lifted to $80,370 from $68,700, and the amount a household of three or more can earn was raised to $89,300 from $79,500.

In Arlington, which is also experiencing a spike in condo conversions, would-be homeowners can receive up to $25,000 in assistance for a down payment and closing costs or to reduce the interest rate of their first-trust mortgage through the Moderate Income Purchase Assistance Program.

Only households earning less than 80 percent of the Washington area median income -- which, for example, is $58,550 for a two-person household -- are eligible.

The county's assistance is provided through a second- and/or third-trust mortgage. Nothing is paid back for five years. Starting in the sixth year, homeowners begin paying back both trusts at an interest rate of 3 or 4 percent, depending on the loan, officials said.

In Alexandria, assessments for residential condominiums, the largest source of affordable home purchases, have increased much more than for other types of property over the past four years, officials said.

The average assessment for such units increased by 23.4 percent in 2004 and 28.8 percent in 2005, to an average of $287,765. The annual income required to be able to afford such a unit is $86,627, according to city housing officials.

The city typically provides about 25 loans a year through the moderate-income assistance program, but officials said they hope to help 47 households in fiscal 2006 using $822,500 allocated by the City Council from the Housing Trust Fund.

Euille said city planners will meet with owners of apartment complexes Wednesday to explain the city's objectives for maintaining affordable housing. Euille said the newly formed Alexandria Housing Development Corp. would like to purchase some of those properties to keep rental prices down.

"We don't want to see the market driven up to a degree that after the conversions, renters can't afford to buy the units," Euille said. "My hope is that we'll be able to slow down the process."