Zoning initiatives lure home buyers

In order to decrease the number of rental units in three Bloomington neighborhoods, the City of Bloomington will push forward with a new Homeownership Zones initiative.\nProspective home buyers thinking about occupying properties in the neighborhoods of Bryan Park, McDoel Gardens and Green Acres may be helped by financial incentives and promises of prioritized infrastructure improvements, such as sidewalk enhancements and street development.\nNathan Hadley, the City's Director of Economic Development, thinks those neighborhoods in particular are ones that have access to schools and parks, a mix of owner-occupied and rental units, and existing city investments in infrastructure. Also, they have neighborhood associations, which expressed concern over increasing levels of rental properties.\n"Those were neighborhoods where people had an interest in being involved in a pilot program, and ones where we thought we could make a difference," Hadley said.\nUnits in Bryan Park and McDoel Garden are evenly distributed between rentals and owner-occupied homes. Green Acres has mostly rentals because of its proximity to campus.\n"That's an area where obviously it's going to take concerted effort if we're going to turn that trend around," Hadley said.\nThe financial incentives to prospective buyers include tax deductions for developers of vacant lots along with assistance in down payment and closing costs. Also, buyers with somewhat higher incomes are eligible for existing HAND programs. The normal income threshold is 80 percent of median income ($43,200 for a family of four), whereas the Homeownership Zone threshold is 125 percent of median income ($67,500).\nIn addition, the city is working with local banks to provide more flexible loans for the targeted areas. However, this does not mean that lenders will give out loans to people who cannot afford them. \n"A lender is not out there to lose money," said Doris Sims, the City's Director of the Housing and Neighborhood Development (HAND) department. \nNearly 30 applications have been sent out to interested buyers, and Sims knows of one individual who is in the process of closing the first loan made under the initiative.\nIn McDoel Gardens, Jack Baker, an executive board member of the McDoel Gardens Neighborhood Association, believes that more people have been interested in buying homes in the neighborhood recently, although he doesn't know if the increased interest is directly attributable to the initiative. \n"We haven't (normally) had that many people asking in such a short period of time about homes," he said. "It seems like it has picked up."\nAlthough the incentives offered by the initiative may interest prospective homeowners, Hadley does not believe the incentives to owners of existing rental units to convert to owner-occupied units are compelling. \n"Quite frankly, there aren't a whole lot of tools that we thought would have a large impact on getting people to convert," Hadley said.\nThus, he does not expect that a large number of renters will be pushed out of the targeted neighborhoods and into other parts of the city as a result of the initiative.\n"It's just not going to happen because the market simply won't bear it," Hadley said.\n"If we can increase owner-occupied housing in a place like Green Acres, we'll see better maintained properties," Hadley said. "We'll see less trash out on the streets. We'll see a a better atmosphere for the entire neighborhood, not just for the owners but for the renters as well."\nThe impact of the initiative will probably be analyzed in five years, according to Sims. At that time, a decision will be made on whether to extend the initiative to other neighborhoods. \nAnyone interested in taking advantage of the initiative should call HAND at 349-3401 or 349-3420.