Baltimore agrees to ‘historic’ funding of affordable housing

Aug. 13--City officials have agreed to fund an affordable housing trust, two years after Baltimore voters approved its creation, committing an eventual $20 million a year, which Mayor Catherine Pugh called "historic."

Pugh and City Council leaders agreed to levy two excise taxes on certain real estate transactions and other allocations to fund a trust to create, rehabilitate and preserve more than 4,100 affordable housing units in the next decade. Activists say it will help fill a critical need in a city where low-income residents in particular struggle to find decent homes or apartments to rent or buy.

"This is an agreement that came from the power of the residents on the ground," said Destiny Watford, among the housing activists who worked to get the trust created, and now funded.

"This isn't an agreement that was made by a wealthy developer coming in or the city making behind closed doors, said Watford, 23, who works with a group trying to get more affordable housing in the Curtis Bay neighborhood. "This is our vision, and it's finally coming into fruition."

The agreement calls for excise taxes on the transfer and the recording taxes on real estate sales exceeding $1 million. The excise taxes are estimated to generate $13 million a year. On top of that, the mayor has agreed to allocate $2 million to $7 million annually that, by fiscal 2023, would provide a total of $20 million a year to the trust.

Pugh, who had been under fire for lending her support but not money to the trust, called the agreement a "historic commitment."

"Affordable housing, sustainable communities, and successful development are central to our work to move Baltimore forward," she said in a statement. "This agreement proves again that the solutions to complex challenges are within our grasp and we can face these challenges with equitable and inclusive solutions that meet current needs and work against displacement of long-time residents."

A building industry group criticized the new excise taxes, saying city officials failed to fully consider the cost they would add to developers, business owners and residents.

"The Mayor and City Council should, at a minimum, listen to how the increase might impact those who will have to pay it," said Josh Greenfeld, vice president of the Maryland Building Industry Association. "This includes not only real estate investors and developers, but residents and businesses who occupy projects bearing this additional cost.

"Importantly, there has been no diligence about the financial and reputational effect this will have."

Greenfeld said city officials should have waited at least until a public hearing could be held -- the City Council plans to consider the measure Sept. 27 -- before committing to the excise taxes.

The agreement was finalized Friday afternoon. Some of its terms will be incorporated as an amendment to a bill that was introduced by City Councilman John Bullock to find a way to fund the trust.

City Council President Bernard C. "Jack" Young said Friday that he hopes to pass the legislation by the end of the year. The mayor is expected to sign it to go into effect Jan. 1.

"I think this is going to be a wonderful, wonderful undertaking," Young said. "We're going to make sure money will go to neighborhoods that have not had any development in years, and have been forgotten."

In addition to the new excise taxes, the agreement calls for Pugh to allocate additional funds to the trust on a sliding and increasing scale. She previously allocated $2 million to the fund for fiscal 2019, and the agreement specifies from $2 million to $7 million annually starting in fiscal 2020.

While details remain to be worked out, the agreement calls for funds to be used to prevent evictions, rehabilitate vacant properties and support community land trusts, which allow for neighborhood groups to purchase, renovate and maintain housing and other amenities.

The agreement came after much pressure from a coalition of activists who were increasingly impatient that the housing trust, which voters approved as a charter amendment in November 2016, had been left unfunded.

They said they had gathered more than the 10,000 signatures needed to get another charter amendment before voters this November that would have required the city to devote a nickel of every $100 in assessed city property value to the trust.

Faced with such a measure -- and a history of voters generally approving such ballot questions -- city officials negotiated with activists on a way to fund the trust. As a part of Friday's deal, the activists agreed to drop the effort to get the measure on November's ballot.

Baltimore has long been afflicted by housing problems. A third of its aging rental stock is considered substandard, and 57 percent of renters spend more than 30 percent of their income on housing, the maximum financial experts recommend. A third of renters are squeezed even tighter: More than half their income goes to housing.

A couple dozen activists staged an event in the McElderry Park neighborhood last week to demand money for the trust.

Speakers said the city provides generous tax breaks to developers who build housing that most residents can't afford.

"The affordable housing is nowhere to be found when the rebuilding is done," said Sharon Hunt, 71.

"Find the affordable housing in the Inner Harbor, Harbor East, Canton, Butchers Hill," she challenged.

The event also highlighted the work of community land trusts, an increasingly popular model in many cities to give residents more control over what is built in their neighborhoods.

The activists gathered outside 520 N. Luzerne Ave., a foreclosed house that Wells Fargo gave to Charm City Land Trusts, one such group that has emerged in the city to create and maintain affordable housing units

Hunt said money from the affordable housing trust could help them rehabilitate the Luzerne Avenue house and others in the neighborhood, many of which are abandoned, boarded up and owned by people who don't even live in the city. Such houses are ripe for speculation, but a community land trusts can help ensure that there is development without displacement, Hunt said.

Hunt is a board member of Charm City Land Trusts.

"CCLT's vision is to have ... a neighborhood that provides housing affordable to the people who have anchored this community for decades," she said.

The Charm City trust previously took 19 vacant lots nearby and created the Amazing Port Street Commons, an outdoor space with community gardens, a prayer labyrinth, playground and art.

Terrell Askew, an organizer with United Workers, a group that advocates for fairness in labor, development and other areas, said neighborhoods in Baltimore are suffering from "decades of neglect and disinvestment."

Rather than write epitaphs for such communities, he said, residents need to fight for their survival.

"This is a war. It is a war for the very soul of our city and the values that we hold dear," he said. "We must be ever ready to defend it."

Bullock, the councilman, said housing problems are linked to other problems in the city.

"Vacancies, blight -- you look at the crime that happens around them," he said. "It's all interrelated."

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