29 November 2007

Live, Work, Learn: Two-out-of-Three isn’t Bad, but it Could Be Better

I want to touch base on a Baltimore Sun article from Monday, November 26, 2007 (Home-buying program continues). This story tracks the evolution of the Maryland Department of Housing and Community Development program that offers purchasing assistance for homebuyers that purchase homes near their place of work. The program was started as part of the Maryland Smart Growth policy:

The state began offering aid to home buyers based on where they work a decade ago under Gov. Parris N. Glendening. That program, simply dubbed Live Near Your Work, was part of the Smart Growth policy that Glendening crafted to guide Maryland's development. Under it, nearly 1,000 buyers got grants of up to $3,000 when buying homes in neighborhoods targeted for revitalization.

During the Ehrlich administration, the plan was given a new name (Live Near Your Work Plus) and changed the eligibility criteria:

[B]egun last year by the Ehrlich administration, that program drew fire from growth-management advocates because the state aid was available on any existing
home within 25 miles of the buyer's workplace.

The Ehrlich administration version offered qualifying buyers grants worth up to 3 percent of their mortgage to help cover closing costs.

[B]ut growth-management advocates and legislators complained that the 25-mile commute allowed under the Ehrlich program undercut the spirit of the state's Smart Growth policy.

[E]hrlich administration officials defended their more expansive approach, arguing it was intended to help suburban and even rural buyers, and not just the Baltimore City residents, who got the lion's share of the aid under Glendening.
Under the current administration, the plan has a completely new name, and has been slightly changed in an effort to bring the program back toward Smart Growth policies:

Smart Keys for Employees is the latest name for the on-again, off-again purchasing assistance program offered in a variety of forms for much of the past 10 years by the Maryland Department of Housing and Community Development.

Unveiled with little fanfare in April, the program offers qualifying home buyers grants of up to $5,000 to help pay settlement costs, if their new residence is within 10 miles of their workplace, or in the same county or municipality.

[T]o get the additional $5,000 grants under Smart Keys, the home being bought must be in a designated growth zone called a "priority funding area." For more information on that and other state housing assistance programs, go to www.morehouse4less.com.

In my opinion, this is probably the best iteration of the program. Although the home-work commuting distances could be exploited by some in the state (live in Arbutus, work in White Marsh?), by requiring the home to be in a priority funding area limits sprawl housing developments. This point may be confusing to some, including William Ariano Jr., deputy director of community development in the state housing department. He is quoted in the article as follows:

"It can be appreciable," Ariano said, "certainly [for] somebody that works in Dundalk, if they're buying a house up in Maryland Line."

Because of the priority funding area requirement, a person buying a house at the Maryland Line would not qualify. The Baltimore County priority funding areas are largely concentrated around the Baltimore Beltway I-795, I-83 and I-95. However, the opposite would be true, a person buying a home in Dundalk and working in Maryland Line would qualify.

Smart Keys for Education – A possible next step

I believe the state program does a good job of providing an incentive to live near work. What I would like to see the county do is provide an incentive for families to live near schools. Possibly provide grants of a few thousand dollars to help pay settlement costs for those families with school age children. Conditions on the grant money would be that the homebuyers would have to qualify for the Smart Keys for Employees program and the home purchase would have to be within one mile of a Howard County school.

Those who would receive the benefit would be people who live in Howard County, work in Howard County, and their children would have the ability to walk to school. This would reduce HCPSS transportation costs and possibly even limit or reduce childhood obesity rates.

I recognize in this time of chronic structural deficits at the state level, incentive programs are difficult to enact, but I believe (and I have no supporting research) this hypothetical program would have about the same impact as the recently enacted Howard County senior tax breaks.

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