Asheville: West Asheville Development on Hold...

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From the Asheville Citizen-Times (11/02/03)

DEVELOPER BACKS OUT OF CONDO PROJECT

By Mark Barrett, Staff Writer

ASHEVILLE - A private developer has pulled out of a city- backed project to build 32 condominiums in a West Asheville neighborhood, saying it is too difficult for him to cope with government restrictions on the project.

Developer Jack Morse said he could not find enough buyers who were well-off enough to afford one of the units in Brotherton Commons but earned less than government limits that come with subsidies for 22 of them. City government is looking for a developer to replace him.

Morse made his move after workers cut down most of what had once been a lush forest at the corner of Brotherton and Virginia avenues, leaving neighbors with a view of a flat, mostly barren landscape for much of this year.

Neighbors were unhappy about the project to begin with, saying it would bring too many people and too many cars. The delay - and the spectacle of the vacant, mostly treeless property - has become an added irritant.

Longtime Brotherton Avenue resident Peggy Ramsey played in the woods as a child. Her children and their grandchildren did the same.

"My grandson would say, `Grandmother, let's go in the woods.' . That was a thrill to them," she said.

"I know that things have got to be done and things are not going to sit still, but why was this done not knowing that they were going to complete it?" Ramsey said. "I had to accept that (the property) was going to change, but I never dreamed that I was going to be left with this."

"It really looks horrible over there," neighbor Sylvia Montgomery said last week before city workers seeded the property. "It's eroded. There are weeds growing over there. It just looks abandoned."

Plans for the property concentrate development closest to Brotherton and Virginia avenues so some trees toward the rear of the property are preserved.

The city bought the property from the Asheville Housing Authority for $120,000 after neighbors successfully opposed a 1994 plan to build public housing there. Neighbors resisted subsequent plans to build on the property, but City Council approved plans for condominiums there in May 2002.

Morse, an Atlanta-based developer, was advertising market- rate units for more than $100,000 up to the $140,000s. Government-subsidized financing for moderate-income buyers of 22 of the units would essentially reduce the purchase price significantly. The subsidy was in the form of a second mortgage that wouldn't come due until a unit was sold or the first mortgage paid off.

"There was somewhat a lack of response and the response I did get, a lot of people just could not qualify," he said.

Some buyers had taken advantage of low interest rates to buy other things so often that they couldn't qualify for a home mortgage, Morse said.

When Morse asked about the state of people's credit, "They'd say, `Oh, it's great. I've got $5,000 (in debt) on my credit card, and my wife's got $2,000 on hers, and we just got a new car.' "

But many people made too much or had too much in savings - or would be over the limit if they got just a small raise after committing to buy. Morse said some retirees wanting to sell their home in West Asheville and move into his project would have qualified but for the fact the home sale would put them over a $25,000 limit on savings.

Current annual income limits for the subsidies are $31,750 for a two-person household and $39,700 for a four-person one, said Heather Bullock of the city community development.

Morse said it will probably require a nonprofit developer that can get better terms from the bank and might be working with a number of potential buyers already to make Brotherton Commons happen.

Lupe Perez, loan program manager at nonprofit Neighborhood Housing Services, said Morse's problem is not surprising.

The portion of the home-buying market that would fit the guidelines for projects like Brotherton Commons "is a thin slice and to be able to reach it you have to do a lot of legwork," Perez said.

Montgomery said a positive aspect of Brotherton Commons was that it would be owner-occupied.

Perez is a strong advocate of homeownership, saying it improves families' finances over time and their community involvement.

But, he said, not everyone is in a position to buy a home at any given time.

"Don't overlook the benefits of renting. For some folks it is a permanent solution. For some folks it's a temporary solution," he said.

The city had originally intended that the $4 million project would be a "co-housing" community in which residents would be involved in the design of the project, responsible for its governance and might share meals and extensive common facilities.

That approach proved cumbersome and has been dropped, city Community Development Director Charlotte Caplan said.

The project itself, she said, is still very viable.

"We still think this is a very exciting, well-designed, well-planned project and we're going ahead with it," she said. "We're sorry that (neighbors) have to look at a vacant site, graded, not pretty. That wasn't in our plans. But, we're going to get it developed."

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I'm not sure I understand exactly what's going on here...