A six-member Homestead City Council sitting as the Community Redevelopment Agency board (CRA) discussed changes to a proposed development agreement to build four homes on CRA-owned lots in the southwest neighborhood.
The four vacant lots along southwest Sixth and Seventh Streets with an estimated value of $20,000 each represent the City’s donation to the new homeowners program. Purchase of newly constructed houses would be restricted to buyers with from eighty percent to 120 percent of the area’s annual median income.
The CRA’s proposal gives priority to first-time homeowners living in Homestead, preferring those already within CRA’s boundaries.
Those buyers also should qualify for down payment and closing cost assistance under existing CRA programs, Council was told.
The 51-year old non-profit Broward County Minority Builders’ Coalition (MBC) was chosen as the property developer. MBC offers proof of financing and plans $5,000 assistance for buyers’ closing costs plus $5,000 in building upgrades.
Three home models are offered:
* a three bed/2.5 bath home with a garage at 1789 square feet for $359,000
* three bed/two bath with a garage with 1504 square feet for $325,000, and
* three bed/two bath with no garage at 1125 square feet for $265,000.
MBC representative Brian Johnson said housing affordability calculations were done in advance based on prices of comparable home sales in the area.
“I don’t call $359,000 affordable, certainly not at that income level,” said Mayor Steve Losner.
“It may be more inexpensive in this market but that’s far from affordable.” He said he didn’t want to promote renting bed space to afford a home mortgage.
CRA Director Kametra Driver pushed back.
“Directly across the street from where these homes are being constructed, a home sold for $359,000 early last year,” she said. “New homes constructed in this same neighborhood are priced at this amount as hard as it is to believe.”
Driver told the Board deed restrictions would police the program. A new buyer could not sell the home for fifteen years, the home must be owner-occupied and not leased, the owners must maintain the property in good repair, and the total mortgage costs could not exceed thirty-five percent of the household’s adjusted gross income.
Councilmember Larry Roth said, “That cost to build seems high to me; the numbers seem inflated. The pricing is steep for that neighborhood.”
“Trying to determine affordability is a big deal,” said Councilmember Sean Fletcher. “Last year, the average cost of construction was $110 a square foot.
Adding inflation, I still get a cost of $267,000 (for the large model) versus your $318,000 cost and that’s a big disparity.”
Councilmember Jenifer Bailey said, “Keep in mind this is land we’re currently sitting on and no one has a better idea for it than this first-time homeowner program. Many of my southwest neighbors have at least fifteen people living in the house and I think that’s terrible. I trust this program to look at what we’re concerned with or the project won’t work out.”
Councilmember Roth asked why homeowners had to wait fifteen years to sell.
The CRA Director said the goal was to preserve the integrity of the neighborhood and encourage homeownership for southwest resident.
“We don’t want to gentrify the neighborhood and displace the folks there. We don’t want them worrying about being priced out of their home.”
“Keep in mind where these homes are going and properties surrounding them,” Director Driver added. “You could put in almost anything and it’s going to look better than what is there. New homes have a big impact on community aesthetics and neighborhood home values.”
“Also, if we value-engineer what the builder puts there to lower the cost, the homes will look much different,” the Director said. “The quality will be a lower standard and there won’t be as many amenities.”
Council asked the CRA board to discuss use of federal relief monies or other CRA funds to kick in five or ten thousand more per house to lower buyer’s costs.
Director Driver said adding other homeowner resources to increase a down payment by ten percent decreases the price of the home from a high of $365,000 to $325,000, making it more affordable.
Mayor Losner conceded this was a good point.
Councilmember Erica Avila made a motion to approve the development agreement with MBC with three added stipulations. She said the home price could not exceed the appraised value.
Secondly, the maximum loan amount was not to exceed ninety percent of the price. Finally, she added a requirement for an overall minimum fifteen percent total down payment assistance, including Homestead’s extra $10,000 assistance, not reduced by assisted closing costs.
“That would be considered affordable to me,” she said.
On the motion, Council voted four to two to pass the resolution, Fletcher and Losner voting no.
Before CRA adjournment, the board approved a $15,000 emergency repair grant to a southwest homeowner for bathroom and electrical repairs.
Council’s Committee of the Whole meeting followed.
Council approved three grants to assist police operations.
A federal criminal justice innovative grant of $800,000 against gun violence allows Homestead to join a national program in place elsewhere in Miami.
A $39,955 grant from the state would provide ‘incident-based reporting’ training for up to eighty officers.
Finally, an $80,000 grant would add body cameras for up to forty reserve officers.
No matching funds were required for any of the grants.
Council approved a $49,000 expenditure for a mural at the Cybrarium book mountain from the same firm developing an augmented reality (AR) program for statues in Losner Park. That AR program would be supplemented at the Cybrarium.
Homestead Main Street was given approval to use City Hall Plaza for its annual Eco-Fair event scheduled for February 19 from noon to six.