City commissioners are expected to approve an affordable housing plan Monday that encourages building homes on vacant city-owned lots and selling them to residents who have very-low to moderate incomes.

Guidelines for the Affordable Housing Infill Program allow sale of city-owned lots to qualified builders and developers to build houses and apartments to sell or rent to resident with incomes of no more than 120 percent of the area’s median income, which, according to the federal Department of Housing and Urban Development, currently is $55,920 for a family of two or $69,840 for a family of four.

City Planning Manager Teresa Maio explained the proposal on Friday morning to city commissioners gathered for a meeting of the Real Estate and Transportation Planning Committee.

The idea is to provide new affordable housing to lower-income residents while reducing the number of vacant and blighted properties in the city, Maio said. Most of the lots are in the Midtown area north of downtown.

The lots will sell at 120 percent of the assessed value on the tax roles.

“Most lots been vacant for a long time so land value, market and assessed value are the same,” she said.

While most lots will cost in the $4,000 to $8,000 range, the assessed values range from $740 for a 435-square-foot lot to $75,934 for a 49,000-square-foot lot. The tiny lot is adjacent to another vacant lot that could be combined into a single parcel.

The builder or developer must put down $1,000 per lot. Upon sale of the house to a qualified buyer, payment for the remainder of the lot is deferred and each year for the next 10 years, 10 percent of the price is forgiven, as long as the house is owner-occupied or the apartment unit remains a low-income rental.

The builder/developer can apply to have non-utility city and county impact fees forgiven – a cost-saving of approximately $15,000, Maio said.

And, as an additional cost-saving, the city has available for use several pre-approved architectural plans, she said.

Commissioner Philip Walker questioned the advisability of the minimum size home being two bedroom when experience has shown that most families want at least a three-bedroom home.

“We did not want to preclude someone if a potential buyer wanted a two-bedroom,” Maio said. “Someone could be an older parent with an adult child,” she said, or for some other reason want only two bedrooms but the expectation is the vast majority of homes will be at least three bedroom.

City staff will work with the builder to identify potential homebuyers through the Keystone Challenge Fund, which provides homebuyer classes and down-payment assistance.

Asked by Commissioner Bill Read what would happen in the unlikely scenario that the builder cannot find an income-qualified buyer, Maio said the builder would be able to sell the house at fair-market value but it would not be eligible for impact-fee forgiveness nor for the lien-forgiveness on the lot price.

The project arose out of discussions during the city budgeting process, Maio said. City staff assessed some 800 pieces of property owned by the city or the city’s Community Redevelopment Agency, first eliminating rights-of-way parcels and stormwater ponds, then eliminating lots in areas not zoned for housing, lots too small to build on and lots that have environmental issues.

“That left 66 parcels. 45 owned by the city and 21 by the CRA,” Maio said. “Most are are in the Midtown Community Redevelopment area. The majority of them are single family. A few parcels could accommodate multi-family, although not an entire complex, perhaps a developer could get a four-plex on a lot,” she said.

Builders/developers will be limited to no more than 10 lots under development, Maio said.

Mayor Bill Mutz asked what would happen to the lien forgiveness if someone qualifies to buy the house, then changes to a better-paying job.

Maio replied that the lien forgiveness still applies and “it is our hope that as they occupy the house they can improve their lives.”

However, if the homeowner sells the house, it would be unlikely that the new homeowner would qualify for the lien-forgiveness program, she said.

To make it easier for builders and developers, the city’s GIS staff created a marketing map showing the location, zoning designation and value of the property, Maio said.

The vote on approving the program is scheduled during the City Commission meeting that begins at 3 p.m. Monday at City Hall, 228 S. Massachusetts Ave.

The plan document that commissioners will consider Monday:

VIDEO – The discussion of the affordable housing and bank occupied the first 20 minutes of this morning’s meetings:

Agenda Study & Committees 2020.02.14 from City of Lakeland on Vimeo.

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