City plan would promote owner-occupied housing
Published: Monday, November 21, 2011
Updated: Tuesday, November 22, 2011 05:11
Newark City Council heard plans to resurrect the Promoting Owner Occupancy of Homes program at their Nov. 14 meeting, a program that hasn't been implemented in the city for two years.
The program, which gives loans with favorable terms to interested buyers who might otherwise choose to rent property, has helped promote homeownership in the past.
Fourteen people have used the loans when purchasing homes since the program was implemented in 2005. The last loan was given in 2009, after city officials determined there were not enough available funds to continue the program.
Mike Fortner, a planner in the city's planning and development department, said this program could help maintain property quality in Newark because owners generally take better care of their homes than renters, and have a more vested interest n their communities.
"It hopefully creates a more stable neighborhood and allows homes that are currently rentals to become owner-occupied," Fortner said.
Borrowers in the program receive a deferred loan of up to $30,000 to be used toward purchasing a home. The loan does not require full repayment throughout the course of the borrower's ownership of the property, nor does it collect interest. When the buyer sells the house, the city collects the entire loan, as well as a portion of the value increase to the property.
Projects leading to more affordable student apartments are a city planning goal, according to Fortner. Currently, students can increase the price for single-family homes because they will pay more in rent than a buyer would for a monthly mortgage payment. Many homebuyers in Newark choose to rent them to the university community instead of living at the property themselves.
"The person who wants to buy that property as a rental house has an advantage," Fortner said.
Roy Lopata, director of the city planning and development department, said he thought the POOH program could increase home ownership in the city and help strengthen the community.
"The exciting thing about the program is that it helps first-time homebuyers purchase homes in Newark," Lopata said.
Ralph Begleiter, university professor and vice chairman of the planning commission, said he believes city residents want to see more people move into the city that share an interest in improving the community.
"The reason city residents favor owner-occupied housing is because those residents take care of their housing and have a long-term view of what they want Newark to look like," Begleiter said. "Students don't have that long-term view."
Newark resident Bruce Chase, 63, said he thought that in addition to the POOH program, the comprehensive development plan laid out by the planning department in 2008 could potentially entice more residents to remain in the city long-term.
The plan creates goals and guidelines for Newark's development, and one of its provisions calls for encouraging owner-occupancy.
"It just doesn't seem to have been implemented as much as they would have liked," Chase said.
He said he questioned initiatives to build cheaper student apartments in order to bring down student demand for single-family homes.
"Is there really a need for more student housing?" Chase questioned. "I think that needs to be studied."
Washington House resident Joy Scott, 58, said she thought promoting owner occupancy was positive for the city, and thought there was plenty of room for more homeowners to share the community with the students.
Scott said she has lived in Newark for three years and has observed changes she believes are moving the city in the right direction.
"There is vitality and there are more interesting shops and more interesting things coming into town," Scott said. "And that is one thing I would like to see continue."