Workforce housing efforts get boost

SANDPOINT — The same economic forces that knocked the stilts out from under the housing market might prove to be just the thing Bonner County needs to build up its inventory of workforce housing.

In both price point and appearance, the proposed face of workforce housing looks very different from a subsidized or low-income property. In fact, once they’re built, proponents say you could drive through any Sandpoint neighborhood and find these structures to be virtually indistinguishable from the home next door.

These homes are geared toward working families making 80 percent or less of the median income for the county. In Bonner County, that means a family of four earning $41,350 would be eligible for a new loan program offered by USDA Rural Development Housing Services.

In a convergence that has as much to do with timing as it does with intent, the Bonner Community Housing Agency has teamed up with a group called Community Frameworks to administer a program that could, in the next few years, begin to make home ownership possible for people who have watched real estate prices escalate steadily out of their reach.

BCHA was formed in August of 2007 to work with employers, local government and other agencies to find ways to keep working families from being crowded out of the housing market. Since that time, prices have fallen, new loan programs have been developed and BCHA has hired its first employee — former Met Life loan officer Chris Bassett, who now works as BCHA’s administrator.

Bassett sees the combination of lower land costs, existing loans and the new USDA home ownership program — designated a 523 loan — as the catalyst for change.

“From working in the mortgage industry for four years in Sandpoint, I saw a lot of people who have the dream of home ownership, but they have no way to get it,” he said. “This provides a lot of opportunity for the policeman, the fireman, the school teacher and the person who works at Litehouse or Coldwater Creek to build a home.”

The administrator does not use that last phrase loosely, for building these homes from the ground up is the foundation for the 523 program. The working families that qualify will be required to invest sweat equity — and plenty of it — doing 65 percent of the construction work with the help of training, tools and a site manager supplied by Community Frameworks.

“What we’re hoping to market is the metaphor of a barn-raising, where families who are interested help themselves and several other families realize the dream of owning a home,” said Stephen Drinkard, BCHA president and project coordinator for the city of Sandpoint planning department.

“We’re going to produce, not just one or two houses, but maybe 11 in this first year,” he added.

If it sounds like the kind of production schedule a developer would undertake, that’s exactly what BCHA has in mind, working with Community Frameworks as its development partner. That regional affordable housing group already has built 169 homes for working families in Spokane, as well as other homes in a four-state region that includes Idaho, Washington, Oregon and Montana.

Using USDA program funds, Community Frameworks plans to buy land in existing Sandpoint neighborhoods. A depressed housing market apparently has prompted at least one in-town developer to consider selling property that would be used for the program.

“We’re looking at purchasing already developed lots,” said John Fisher, HomeStarts program manager for the Community Frameworks office in Spokane. “The streets, the sewer and water — all the infrastructure — are already in. All that’s missing is the house.”

When BCHA was formed three years ago, the group was cautioned by affordable housing advocates in other resort communities to get in front of the curve before Sandpoint went the way of Sun Valley, where workers who couldn’t afford housing were forced to move farther and farther away until, in the end, they found it more convenient to quit their jobs in favor of new positions in the towns that grew up around them.

The USDA’s 523 loan will attempt to turn that trend around. With its existing Idaho programs located in the southern part of the state, the federal agency went looking for a spot to plant its workforce housing standard in the Idaho Panhandle.

“Sandpoint quickly rose to the top as a place to start because of the high prices and the inability of people in the workforce to afford to buy a home here,” Fisher said.

According to BCHA estimates, a new home in the $200,000 range these days will cost the first wave of loan recipients about $135,000 — a price Sandpoint hasn’t seen in a good, long time.

The people getting that deal have to fall within the income guidelines, have reasonably good credit, low monthly debt and a killer work ethic. They’ll need it, because, if things pan out as planned, they will be on the construction crew that builds their new neighborhood.

Bassett doesn’t expect any shortage in people who want to sign up for what Community Frameworks is calling a “self-help program,” since interest at a recent BCHA “Finally Home” education program was unanimous. Those classes, conducted in partnership with the Selkirk Association of Realtors, help attendees navigate the USDA’s 502 loan program. Although helpful in addressing the workforce housing shortage, the popularity of the 502 loan option and the fact that its funding must be reinstated quarterly, means that the waiting list is long and many families become frustrated by the slow-moving process.

By combining the administrative resources available from Community Frameworks, a new financing stack is made possible. At the top, the 502 funds cover most of the expenses. Beneath that, the 523 loan puts sweat equity to work in leveraging down home costs and, when needed, providing down-payment assistance, usually about 20 percent of the total price.

Best of all, those who take part in the program don’t get bumped each time funding undergoes its quarterly review.

“The beauty is that, if you’re using a 502 loan coupled with this 523 program, you jump to the front of the line,” Fisher said.

The structure of the build-your-own-home process sounds much like the one used by Habitat for Humanity, which, in Bonner County, has built about a dozen homes, averaging roughly one home per year since Idaho Panhandle Habitat for Humanity was formed in the early 1990s. The difference, Fisher said, is that Habitat works exclusively with very low-income families, where this new program will focus on working families earning considerably more.

Like it or not, it’s a distinction that could remove the “not in my back yard” mentality often associated with low-income housing initiatives. Nearly everyone supports them in theory, but few, when pressed, would volunteer to have one go up next door. On the other hand, Drinkard offered, even fewer folks would balk at having a cop for a neighbor, a schoolteacher across the fence, or the person who fights fires for a living across the street.

“The kind of people who qualify for this program are the kind of people I’d love to have as my neighbor,” he said.

Along with working families, they are retired couples, young people getting started in careers and single, employed parents, he added. It’s a list that aligns closely with what Community Frameworks has seen in other Northwest communities.

“There are hundreds of success stories,” Fisher said. “And most of these people never thought they would ever own a home.”

But the program is “a loan, not free money,” he continued, and must be paid back over a 33-38 year mortgage period. Further, potential applicants are required to take part in education programs that prepare them for home ownership, similar to the programs BCHA now offers in Bonner County.

The similarities don’t stop there, according to Bassett, who views this partnership with Community Frameworks as a mentoring opportunity. Even as the 523 homes get built — if and when they do get built — the local non-profit housing agency will be moving on a separate track to repair or rehabilitate existing homes and add them to the workforce housing pool. Eventually, BCHA wants to take on the role Community Frameworks will play in building this first round of new homes.

“We’re going to ride along with them and learn the process,” Bassett said. “As we gain the expertise, we want to become the developer of long-term, affordable housing in Bonner County.”

BCHA and Community Frameworks will hold a public meeting on Thursday, Sept. 23, from 6:30-7:45 p.m. at Community Hall to present more information about the 523 loan program and begin soliciting community input about housing needs in the local area.

For information, call (208) 290-0305 or visit: www.bonnercommunityhousing.org