Under the planned pilot program, which must be approved by City Council, developers would build about 40 houses over two years, including 30 this year. The city then would pay the developer to reduce the price of the home to make it affordable for a household earning between $40,000 and $80,000 a year.
The city land bank expects the average price of those homes to be $240,000. Under the proposed program, if a developer built a $240,000 house on one of the properties but a buyer couldafford only$200,000, the city would pay the other $40,000.
The land on which the houses are built would remain in the land trust, and the new homeowners would be restricted in the future in both the sale price of the house and to whom they could sell.
City and land bank officials say that landtrust model would ensure that the homes remain affordable in perpetuity and help create mixed-income neighborhoods.
“We’re looking for ways to preserve permanent affordability in neighborhoods that are seeing rapid change in the cost of housing,” said Steve Schoeny, the city’s economic development director.
The pilot would focus on building homes in four neighborhoods: the South Side, Franklinton, the Near East Side and Weinland Park. The land bank holds 636 properties in those neighborhoods— about a third of all its holdings— but it initially plans to concentrate on smaller areas within those neighborhoods, where it has 103 parcels.
A typical infill lot on land-bank property costs between $220,000 and $260,000, said John Turner, who oversees the city land bank. Newly built homes in some of the neighborhoods where the land trust is working can fetch $350,000, Turner said.
Turner said the city estimates that a buyer earning less than $80,000 a year can afford a house that costs between $130,000 and $200,000, depending on other factors including the amount of debt they already are carrying.
“We don’t want to build something that… from a price point standpoint is too much for these folks to afford,” said Curtiss Williams, president of the Central Ohio Community Improvement Corp., which serves as the county’s land bank. “We’ve been very thoughtful about how we develop these homes. It will be of high quality, but not so much so that people can’t afford them.”
The gap between development costs and what homeowners can afford will determine the final number of houses that can be built and sold under the program, Turner said. The $3.8 million could pay for an average gap of $95,000 on 40 homes, but if that average drops, more homes could be built.
The land trust is trying to identify its developers now, Williams said, and it expects to break ground on the first house in late spring. It is working with agencies that offer home-buyer education to identify buyers, but the buyers would not have input on the build.
Columbus City Council will have a public hearing on the pilot program at 4 p.m. Wednesday at City Hall.
Among other initiatives, the city has to encourage density to create a larger supply of housing that, in turn, drives down prices, said Omar Elhagmusa, president of the Weinland Park Community Civic Association.
“It’s one of the solutions, not the solution. We have to keep our eye on the big problem and how to fix that. That fix is going to take bold changes,” he said.
Schoeny said the pilot is part of a broader city strategy that also includes multifamily affordable housing.
“We believe homeownership is an important element of neighborhood stability and having people who are truly and financially invested in the neighborhood in a way that is different for folks who aren’t homeowners,” he said.