Mosby pitches dollar house program to council
City Council President Nick Mosby pitched his effort to revive Baltimore’s famous dollar house program to fellow council members at a hearing Monday night, telling them he wanted to “get ahead of misinformation.”
“We're able to take a non-performing asset that's not bringing in any tax revenue and turn it into a performing asset and provide it to a resident who's been here, who's been living with the conditions that are byproducts of failed policy and the disinvestment of their communities,” the Democrat said. “I think that it's incumbent on this body and the leadership of the city to ensure that.”
The original 1970s program revitalized now-thriving neighborhoods such as Otterbein and Pigtown, after the city sold blocks of decrepit homes for $1, requiring buyers to pour their own money into renovating the properties. Eligible participants had such high demand for the program that officials ran a lottery.
Mosby argues that his program would bolster generational wealth among poor Baltimoreans, particularly among Black families who were harmed by redlining and less likely than white city residents to own homes.
He called for Mayor Brandon Scott to fund the initiatives through the American Rescue Plan Act federal stimulus. The mayor wields sole power over most city spending; the council cannot move money around the city’s budget nor dictate any spending of the $641 million in ARPA money.
“We've constantly talked about the importance of not just spending money in this once in a lifetime opportunity, but investing money, particularly investing in the citizens and the communities that have been disproportionately disinvested in for far too long,” Mosby said.
Scott has not weighed in on the specifics of the program itself, but has said that he will announce ARPA funding for housing initiatives early next year and will carefully consider any measure the council passes. According to several sources speaking on background, senior Scott officials are already lobbying progressive council allies to strike down the measure.
Council members responded to Mosby’s pitch with questions about eligibility and logistics, trying to get a handle on how many residents could enroll in the program and where exactly their homes would be.
Mosby’s Urban Homesteading Program would offer two-year leases to the vacant properties for $1, during which prospective buyers would pay for renovations needed to make the homes habitable. Within six months of executing the lease, participants must make the property their primary residence. If the home is brought up to code, the city would then transfer the title to the buyer.
The cost of those renovations would depend on specific property conditions, but would likely run participants at the very least tens of thousands of dollars. Mosby cited a report that found the average renovation cost in the U.S. is around $140,000 or $150,000. Another bill in the package would offer general home repair grants of up to $25,000 and emergency repair grants of up to $10,000.
The Department of Housing and Community Development would oversee the programs. Not all city-owned vacant properties or city residents are eligible.
The legislation does not name eligible neighborhoods, but defines them as “those that have been overlooked by investors and revitalization initiatives or was historically subject to redlining.” They must have “assets that can provide a central focus for revitalization, including: public markets, public spaces, transit corridors and emerging housing and commercial development activity.”
“We didn't want to pick winners and losers through legislation,” Mosby said. “We wanted DHCD, through the information that they have that they've been working on, to help develop the actual program and how the program was going to roll out.”
He said he hopes DCHD will create an interactive registry that allows residents to look up dollar home properties.
Baltimoreans would have three ways of qualifying for the programs: those who have lived in the city for at least 15 continuous years, those who have lived in an eligible neighborhood for at least 10 years and city employees who have worked for Baltimore for at least five years would be eligible.
Applicants would also be required to prove to the city that they have the funds to complete repairs. If they are renters, they must prove they’ve been in compliance with the terms of their lease for a continuous period of at least 12 months.
The dollar home bill prioritizes first-time homebuyers and those with a household income at or below 80% of the city’s average median income, as well as participants in the Federal Housing Choice Voucher program.
Mosby staffers said there was no perfect data to estimate how many residents are eligible for the program, but that there are about 17,000 households in the city that have rented for 15 years or more.
The package, which also includes a bill to create a grant program to pay down the reverse mortgages of senior residents, would cost around $200 million, according to an estimate from Mosby’s office.
Scott’s agency heads did not give presentations at the hearings, but raised their concerns in other ways.
In a memo, Chief Solicitor Victor Tervala called the dollar home bill unconstitutional and in conflict with city charter, which does not say whether the council can set lease rates and sale prices of city property.
He argued that the program allows individuals to receive favorable leasing rates and sale prices of city-owned property, citing a 1981 Supreme Court ruling that said governments cannot favor established residents over more recent residents.
“The benefits provided participants are not rationally related to the need for the benefit,” he wrote. “If a City resident loses their home because of a discriminatory housing practice, whether they resided in Baltimore for 15 years or 1 year, their need for the program benefit is the same.”
To be constitutionally lawful, the bill must remove time of residency requirements and allow the housing department or city spending board the discretion to oversee sale and lease rates, Tervala wrote.
Before Mosby moved to public testimony, Housing Commissioner Alice Kennedy, whose department would oversee the programs, asked the council president if there would be further opportunities to discuss her apprehension.
“We do have a number of different concerns about different pieces and structures within the legislation, of all three bills,” she said. “There are limited available properties and analysis.”
Mosby replied that he wanted to host the hearing early “because we know it was one with a lot of interest out there and we want to ensure that we were all on the same page.”
He said there will be additional hearings and work sessions where agencies can provide input. Later on in the hearing, the council president took testimony from the public.
Nneka N'namdi, founder of Fight Blight Bmore and the Stop Oppressive Seizures Fund, said she does not support the legislative package due to eligibility criteria and affordability concerns.
The definition of eligible neighborhoods “puts the focus around developing, around assets and revitalization efforts for investors, not based on community needs or repairing the damage done by racist policies,” she said.
She added that the program doesn’t account for the lack of availability of low-interest mortgages for program participants. “And we can't trust the banks to do that,” she said.
Dvonne Nobles, a mother who was born and raised in Baltimore, grew up in a home owned by her family before they lost it. She said she had to move out of the city and live with family for an entire year before she could afford to come back and buy a home of her own.
“Finally being able to buy a home after a very traumatic experience has really brought value to my family,” she said. “My own father is now about to move in with me because he cannot afford to rent in his own neighborhood.”
Nobles said she appreciates those who are criticizing the bill to ensure that it’d help those that really need it, adding that “there’s also low hanging fruit, and there's people who could use some support right now and could be benefits and assets to the city that you will absolutely lose if they cannot find affordable housing and safe spaces right now.”
Mosby said that further hearings for the bills will be scheduled in coming weeks.