Olivia Gross Photo
Tamika Baines cuts ribbon on NHS-renovated West Hazel Street home.
After decades of helping families stay one step ahead of gentrification, Jim Paley and Bridgette Russell have some ideas for confronting new threats.
The ideas include building anew on vacant lots and pressing for changes in how the city taxes first-time homeowners.
Paley is the founding executive director of the 42-year-old nonprofit Neighborhood Housing Services (NHS). In that role he has pioneered a quality approach to urban homeownership for working families: His agency mastered the use of tax credits and philanthropic and government preservation dollars to rehab rather than demolish beautiful old houses in lower-income New Haven neighborhoods — and keep the costs down in the process so the families of local custodians or secretaries or behavioral therapists or nurses could afford to buy them. NHS has helped over 300 such families buy and keep such homes and become anchors of their neighborhoods; it has helped 42 of them do so in Newhallville alone in the past 15 years.
Russell founded NHS’s Homeownership Center just in time for the subprime mortgage crisis-driven recession of the late aughts. She has lined up buyers and helped hundreds of families learn how to maintain their home investments and avoid foreclosures.
New Haven has found no other effective way on that scale to improve neighborhoods without families getting pushed or priced out; and no more effective alternative to absentee slumlords dragging down those same neighborhoods.
Paley and Russell said during an appearance Tuesday on WNHH FM’s “Dateline New Haven” program that their crew has had to pivot in recent years in the face of two forces that have made it harder to obtain those century-old gems.
One obstacle: The tens of millions of out-of-state investment dollars flowing through local poverty megalandlords to milk older rental properties often for Section 8 rental subsidies in the quest to use profits to buy and flip more properties. Those investors get to most potential family-owned properties before local families or the city or nonprofits like NHS can put in a bid. “They pay cash,” Paley noted. And they can overpay. They drive up prices in the process while dragging down and destabilizing the neighborhood.
A second obstacle: Paley said he has found it harder than in the past to obtain as many tax credits and grants and subsidies to enable NHS to fix up old houses well while keeping sales prices affordable for buyers earning below 80 percent of the Area Median Income (around $89,400 for a family of four), the range in which NHS works.
NHS's Bridgette Russell and Jim Paley at WNHH FM.
So NHS has moved more to building new homes on vacant lots. The city recently sold the agency double lots on Winthrop Avenue and Thompson Street, where NHS is planning to build affordable new homes for working-family buyers. Another four such city-to-NHS sales are in the works for four vacant Newhallville lots.
Meanwhile, the agency has helped its homeowner-helped families contend with an ironic whammy from the city tax man.
Some NHS families have found appraisals of their homes skyrocket in areas like Newhallville where the poverty megalandlords and flippers have driven up sales prices (without creating real appreciable new value). The city appraisals are based on “comparable” sales, Russell said: But in truth the sales are not comparable because NHS homes have 30-year covenants limiting resales to other lower-to-moderate-income families. So those special NHS homes can’t capture the same high prices on the market that investor-flipped homes can.
Russell said some homeowners have faced skyrocketing tax bills they can’t afford as a result. In order to help them keep their homes, she has accompanied them one by one to the city’s tax assessment appeals board.
“I look at homeownership as having been an effective tool within the Black community in terms of wealth generation,” she said.
So far she has been successful in those “several” cases in convincing the board to lower the individual new assessments. She argued that the city should revisit how it defines “comparable” home sales in appraising the value of NHS-spawned versus meglandlord-owned and investor-flipped homes.
(A second irony in this situation: The city’s method of determining properties’ worth for tax purposes vastly under-appraises the value of luxury buildings in town, allowing out-of-state investors to be taxed based on appraisals as much as $45 million lower than they actually paid for properties.)
“I’d like to see people not forced out of their homes because of rising values,” Paley said. Recent upscale projects launched in and near Science Park have revived predictions that Newhallville could be the next area to attract a wave of white-collar biomedical or other tech or university renters and buyers who can afford to pay higher prices.
“It could happen at any time. That’s one of the things that we want to be able to guard against,” Paley said. “The 42 people who have bought homes from us in the Newhallville neighborhood alone since the recession have a vested interest in staying and not ending up having to sell or being motivated to sell because of rising prices.”
Paley suggested a second way to help families afford to keep their homes amid crushing tax hikes caused by gentrification or property-flipping: Create an indefinite $1,500 annual “homestead” tax exemption for first-time homebuyers who earn less than $100,000 a year.
Another Paley suggestion: The city should crack down more on building code violations at neglected poverty-megalandlord-owned homes. He spoke of cases where NHS-assisted owners of well-maintained renovated homes are watching their block run down thanks to poorly maintained and managed poverty megalandlord-owned properties.
In addition to increasing its new construction projects on vacant lots, NHS is still doing some of its old-school rehabs. It has been obtaining financing and grants to spend $1 million restoring a long-vacant historic circa-1875 mansion at 470 Howard Ave. Paley said that NHS expects to be able to sell the finished product to a working family (which will be able to generate rental income as well as living on the premises) for just $295,000. Russell said she has already heard from a potential buyer.
Click on the video to watch the full interview with Neighborhood Housing Services’ Bridgette Russell and James Paley on“Dateline New Haven.”
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