County May Help Its Workers Buy Into Its Glut of Homes

Prince William County officials, trying to cope with the highest number of foreclosures of any jurisdiction in Virginia, are considering making loans available to county employees to buy homes there.

In this way, Prince William would attempt to reduce the glut of homes on the market and attract county employees, many of whom drive long distances to work because they cannot afford to live in the county.

The proposal, which officials will present to the Board of County Supervisors tomorrow, is the latest effort by a local government to boost the number of affordable homes. Gerald E. Connolly (D), chairman of the Fairfax County Board of Supervisors, recently proposed using county money to buy foreclosed properties and selling them at below-market prices to working families.

Under the Prince William plan, the county government would invest up to $25 million in pass-through certificates of deposit at a bank. The proceeds would be used to offer mortgages to the county's 3,500 employees. Entry-level public safety employees, who earn about $44,000 a year, would be the target group. For years, firefighters, police officers and teachers have had the most trouble finding an affordable home in Prince William.

"It's a brilliant and innovative idea," said board Chairman Corey A. Stewart (R-At Large). "This is not a panacea, however. It's not going to solve the problem. It might be able to help it a little bit. We rose fast and high during the housing boom, and when the bubble burst, we were the ones taking the biggest brunt."

The large pool of low-income, first-time buyers who bought homes in the county during the boom years and defaulted on their loans contributed to the nearly 7,000 homes in various stages of foreclosure in Prince William, according to county Finance Director Christopher E. Martino. Employees eligible for the loan program could buy those homes or others on the market.

"Left unattended, the foreclosure problem could easily deteriorate as neighborhoods are allowed to slip into decay," Martino said.

Foreclosures drive down home prices and require costly county oversight to maintain properties. For example, cutting the lawns of vacant properties could cost the county as much as $1.2 million a year, officials said.

"That is well beyond the current capacity of staff and the budget to deal with," Martino said, citing a study that found each foreclosure costs a municipality about $27,000.

The county formed a task force last fall to reduce the number of homes on the market and help stabilize home prices. In April, the median price of a home in Prince William was roughly $282,000, compared with about $398,000 a year ago, according to Metropolitan Regional Information Systems, the local multiple-listing service.

Because the county has no money to spend on housing incentives and cannot offer real estate loans, the task force came up with what it called the "Home Help" program. If the board approves it, the task force will survey county employees to see how many are interested. If implemented, Prince William officials would use the plan to help recruit and retain employees.