Last updated: August 07. 2014 7:00AM - 808 Views
By - cberendt@civitasmedia.com

Chris Berendt/Sampson IndependentA look at the future site of the second affordable home built as part of a City of Clinton-Sampson Community College partnership.
Chris Berendt/Sampson IndependentA look at the future site of the second affordable home built as part of a City of Clinton-Sampson Community College partnership.
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The City of Clinton and Sampson Community College have partnered for a second round of affordable housing, and this time they’re going bigger.

City Council made it official at its regular meeting Tuesday night, approving a contract that will see a 1,350-square-foot three bedroom, two bath house purchased and placed at the corner of Ferrell and John streets, across from the Clinton-Sampson Rescue Squad. The house’s location to the site is at least a month away, as it is being completed and the city will need to give the rescue squad 30 days to relocate its storage shelter.

“We’ve built one house with the community college and that worked out great,” Clinton Mayor Lew Starling said. “Now we’re looking at another one. It’s a good program.”

SCC submitted a proposal of $64,347 for the house, and city staff estimated another $17,000 is needed for relocation, site preparation, inspections, appraisal and other costs, bringing the program budget to $80,900. The Community Development Fund has $55,000 for seed money and the $26,000 difference will come from the General Fund.

The Council unanimously approved the purchase of the house.

Upon sale of the house, the city should be able to reimburse the General Fund completely and have funds available for future houses, City manager Shawn Purvis noted.

“Although the first house took three years to sell, the affordable housing program ultimately provided an affordable home for a family,” Purvis told Council.

In 2009, the city entered into a partnership with SCC as part of the Clinton Affordable Homeownership Program, the goal of which is to provide safe, affordable homes for low to moderate-income families through a revolving program by which SCC students and professionals build a home that the city places and sells.

The aim is to recoup costs with the sale and begin the process again.

Purvis called it a “great program” that not only offers low-cost, well-built homes, but does so at a vacant site, or one where nuisance homes or unsafe structures previously stood.

As one house is sold, a vacant lot can be purchased with the proceeds — or an existing city-owned lot used — in order to place another house from the community college. While that revolving process took a good amount of time previously, city officials expect this house to be sold in shorter order.

Purvis first confirmed in May that he had met with Barney Grady at SCC regarding the purchase of a second house as part of the partnership.

“At the Council’s budget workshop this past spring, Council had indicated they were interested in continuing our partnership with the community college as part of our Affordable Homeownership Program,” Purvis said Tuesday. “They’re ready to go, probably a few weeks out from completely finishing it.”

In 2010, the city purchased a house from the college for approximately $53,000 and completed the project with a budget of $66,000. SCC placed a value of $52,855 on that 1,200-square-foot house, which was built complete with three bedrooms, two baths, central heat and air and containing all major appliances.

It was professionally appraised at $85,000.

By the end of 2010, the completed house was up for sale at the city-owned property at 115 W. Lee St., where an unsafe home was previously demolished. However, it was not until nearly three years later, in May 2013, that the city was able to sell it to John G. Matthews Jr. for $70,000, minus closing costs fronted by the Council.

While the finishing touches are being put on the city’s second house, the expectation is to sell it at a price that “meets the city’s financial needs and affordable housing program guidelines.”

Explaining those “guidelines” a bit further, Purvis told Council members in a memo that affordable housing deals with the relationship between housing costs and available resources.

The U.S. Census Bureau estimated a median family income (MFI) of $53,099 for Clinton as of 2012. Based on this MFI, affordable housing for the average family means annual housing and utility costs of $15,930 (affordability is measured at 30 percent of MFI) or $1,328 a month. Assuming average monthly utilities of $200 and including taxes and insurance, this is equivalent to a 30-year mortgage for $162,500 with a 5 percent interest rate.

Families in the low to moderate-income (LMI) levels tend to have the greatest need for affordable housing. Low income is less than 50 percent of the MFI and moderate is greater than 50 percent but less than 80 percent of MFI. This means the affordable housing ceiling for LMI families in Clinton is $12,744 a year ($1,062 per month) at 80 percent of MFI and $7,965 annually or $664 a month at 50 percent.

On the low end, this is equivalent to a 30-year mortgage for $60,000 and a $121,500 mortgage at the upper end.

“The goal of the affordable housing program is to provide quality-housing opportunities within this price range,” Purvis stated. “The previous house located on Lee Street appraised for $85,000 in 2010. Staff believes the college’s house currently under construction will also appraise within the stated LMI price range.”

The first go-round, the city broke even, investing about $65,000 and selling the Lee Street house for $65,000 after closing costs.

“The goal was to sell it for $75,000 or $80,000 and we were really hoping for that,” Purvis said. “We had a lot of interest at that price, but it was just getting someone qualified.”

The unknown time that it will take to get a qualified buyer is the biggest risk of the project, however city officials are optimistic this time around. The economy was in the dumps several years ago, when the first house was trying to be sold, and times has since improved, Council members said.

So far the feedback has been positive. With the house not even completed or placed, the phone has been ringing.

“We’ve already gotten calls,” Purvis said.

To inquire about the Clinton Affordable Homeownership Program or the new house, call the City of Clinton at 910-592-1961.

Chris Berendt can be reached at 910-249-4616. Follow us on twitter @SampsonInd.

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