Future Project Possibilities
The downtown and older neighborhoods in New Albany have a relatively low homeownership rate (about 42%) compared with other areas and the state of Indiana as a whole (76%). There is also a high vacancy rate (about 9% overall, and as high as 12% in certain tracts) and property values are low compared to construction costs.
In order to address and improve the housing situation in the inner-city census tract areas, private contractors would have to subsidize properties for sale, and landlords may be unable to upgrade rental property without losing money.
New Albany Community Housing (a certified Community Housing Development Organization or CHDO) receives federal grants through Indiana Housing to subsidize its projects. The HUD program is called The Home Investment Partnership or HOME, and the money can be used for homebuyer or rental, rehab or new construction.
Several types of organizations are eligible to apply for HOME grants. While CHDOs are uniquely positioned to receive HOME money, there are many requirements in order to apply for and be awarded the grants. Among the more difficult requirements is called “local match.” Local match is the requirement that for every federal dollar received on a project, a local cash donation of 25 cents must be generated. If a project generates more match than needed, the excess amount of match can be saved and used from one project to the next, or banked, and used as long as the HOME program exists. It can even be shared with other organizations to help them apply for HOME grants as well.
New Albany Community Housing was fortunate to receive the donation of 25 houses from Floyd Memorial Hospital, Floyds Physicians and Dr. Tim Conrad. The appraised value of these homes can be banked as match if the houses are relocated, rehabbed and sold to qualified buyers. We have moved 19 homes so far into a project called Linden Meadows, a new small subdivision with new streets, sewers, drainage and even a small park for the neighborhood and nearby residents.
The first house in the Linden Meadows project was sold in January 2007. This one house generated nearly $100,000 in local match, which can be banked and used as the required 25% match for a grant of almost $400,000. This grant then would help the CHDO subsidize from 10 to 16 new or rehabbed homes for first time homebuyers in targeted neighborhoods. The 25 houses in the Linden Meadows subdivision, if used as match in the HOME program, could therefore leverage from 250 to 400 homes, an investment of as much as $25 to $40 million in New Albany’s residential housing.
Four hundred new homeowners would raise the targeted area’s homeownership level by 5% or 6%. If coordinated in combination with “for-profit” developers and/or in mixed income projects, this could be multiplied several times over for even greater effect, and make a substantial difference in the quality of life for many New Albany residents.