December 17, 2002
City of Buffalo Housing initiative
by Deepa and Preethi Govindaraj
The City of Buffalo is taking steps to insure that the people who work for the City live there as well. The goal of the City of Buffalo Employer Assisted Housing Program, a branch-off program of the Fannie Mae program run by the Office of Strategic Planning in City Hall, is to assist City of Buffalo municipal employees so that they can purchase their first home in the City of Buffalo. We talked to the Resource Development Technician (who told us he did not want to be identified by name) and to Fred Heinle, the Director of Residential Development, to find out how this program makes homeownership in the City more accessible to municipal employees.
Fannie Mae supplied Heinle with the names of private lenders and scheduled conferences. Bob Bannister, the local Fannie Mae representative, worked closely with Heinle in the past, and so when Fannie Mae contacted the police department and teachers, Heinle was called to a meeting where the idea was presented. The City found funds and went ahead with the project. $145,000 was set aside through the Buffalo Urban Renewal Agency (BURA), a nonprofit organization affiliated with City Hall, to help fund this program. Once it was announced, the City responded to over 250 inquiries right away. Twenty-five successful applicants were approved in two and a half months, which left room for only four more successful applicants. Many of the inquiries resulted in angry applicants who learned they did not qualify because they already owned a home in the City of Buffalo. The biggest obstacle the program faces now is the lack of funding for next year. Even though there are no leads regarding the next source of funding, Heinle said the program will definitely continue next year.
Candidates for this program fill out an application and agree to comply with the terms of the program. Applicants are considered qualified if they are full-time employees of the City of Buffalo, Buffalo Board of Education or BURA. Additionally, they must not have any outstanding financial obligations to the City of Buffalo, including parking tickets, user fees, and taxes. Candidates may apply only if the purchase is their first in the City, and must qualify for and receive a mortgage from a choice lender. If they are accepted, then they are given a $5,000 loan.
Then, provided they live in the home they buy in the City as their primary residence for five years, the loan is forgiven. This incentive is laid out so that people will stay in the City. To make these neighborhoods more stable and secure, city officials are trying to draw police officers and firefighters to live there. “I think it clearly is a benefit to a community to have the service professionals living with them,” said Heinle. There are new homes on the City’s East Side and homes have been purchased in South Buffalo and North Buffalo as well.
Of the twenty-five first time homebuyers, fourteen are affiliated with the Board of Education. Heinle told us new hires for the Board of Education in the City were informed to move into Buffalo or lose their jobs, according to State Law. All hires were apparently required to live in the City, but the Law is being enforced tightly for new hires. This is probably why Board of Education employees are the majority in this EAH program. There are four buyers from the police department, three from the Fire department, three from the City of Buffalo, and one employee from BURA. Nine of the homes purchased are in the 14216 zip code, which is primarily North Buffalo. Five of the homes are in the 14220 zip code (South Buffalo), three are in the 14214 zip code (Near Starin and Main), and two are in the 14222 zip code (near Elmwood Avenue). The rest of the six homes are disbursed in the 14204, 14206, 14207, 14208, 14211, and 14215 zip codes.
We asked Heinle why so many homes in the City are on the market, and he responded that many Buffalo residents are getting older, and thus either passing away or moving into nursing homes. Additionally, he said, many Buffalo residents move to Florida, which leaves houses for sale. Finally, he said, many residents in the City with young children are afraid to send their children to schools in the Inner City. These residents tend to be younger, middle-income families..
Homes valued at $100,000+ apparently do not stay on the market for very long. Some of the other houses, which are valued less in the real estate market, have been up for sale for a long time. Most of the changes people have made thus far on the houses they’ve purchased have been interior modifications. Heinle did not speculate about exterior changes in the coming summer.
Since the state law (and union mandates) exempts police, fire, and sanitary workers from residency requirements, Senator Schumer is very hopeful about this program and believes that it could be the medicine Buffalo needs. “This win-win program might just be what the doctor ordered for downtown Buffalo and for families looking to buy their first homes. It’s an incentive-based way to get the people who work for Buffalo to live in Buffalo,” Schumer said in an August 2002 press release. “This program is one of the most comprehensive in the country. It has something to offer for all city employees – those who want to purchase a home, fix up their existing home, or those needing counseling to become first time buyers.” The Resource Development Technician suggested that police and fire may be exempt from residency requirements because the City had enough trouble just finding employees.
Other benefits of the EAH program include a $5,000 matched savings program, reduced bank fees, up to $3,000 down payment and closing cost grants, and Financial and Home Buyer education. The obvious benefits include quality housing, affordable prices and middle income housing. For the first-time homeowner, the prospects are amazing – they can own homes in the City, near their places of employment at affordable prices.
The larger issue we examined is how does the EAH program help the City of Buffalo? The immediate benefits are seen with the homeowner, but the long-term impact of this program will have ties in directly to the City. This program will help promote downtown Buffalo by helping municipal employees become city homeowners. The people that will be attracted to this program are teachers and police officers and firefighters. Not only can the abundance of old homes be utilized but the City’s suffering education system can benefit also. Eventually, if teachers from the suburbs start to come to the City and teach as a result of the EAH program, the public education system will benefit greatly. The schools of downtown Buffalo are in need of teachers who will remain in the school system; this program might help to achieve that.
The City of Buffalo is in need of people willing to stay and work to improve the neighborhoods and lives of residents. The EAH program encourages municipal employees to come into neighborhoods in need of such care. For municipal employees, neighborhoods they might have driven through at some point may become their own, and the desire to better these places will only increase. Canisius College started an Employer Assisted Housing Program, and D’Youville started talking about one also. Perhaps more organizations should get on board with this incentive-based program to help Buffalo and its residents.
Deepa Govindaraj is a freshman at the University of Buffalo Honors Program, pursuing a degree in the Liberal Arts. Preethi Govindaraj, a recent graduate from the University at Buffalo Honors Program, is a first year MBA student at UB.
copyright 2002 by Buffalo Report, Inc.