Last week, Baltimore City Council President Nick Mosby—who is fundraising to defend himself in a federal investigation—unveiled a dollar houses program that his office claims will revitalize the city and bridge its massive racial wealth gap. The legislation allows certain Baltimoreans to rent a vacant home for two years for just $1 while they make necessary repairs. Once the formerly vacant home is livable, the title goes to the $1 renter.
The need for cheaper homes is apparent in Baltimore. Longtime city residents have been locked out of opportunities to create wealth that homeownership provides—and median sale prices in Baltimore have nearly doubled since January 2020.
[Housing advocates and even some investors] say Mosby’s legislation is duplicative of policies already in place and warn that, if previous attempts at this program are any indication, the program would overwhelmingly benefit the wealthy and real estate developers.
“Besides the opportunity to create generational wealth, buying an affordable home will also save many city renters hundreds of dollars a month,” a press release from the council president’s office said. “Nearly half of the renters in Baltimore pay more than a third of their income on housing.”
Many housing advocates, and even some investors, are suspicious. They say Mosby’s legislation is duplicative of policies already in place and warn that, if previous attempts at this program are any indication, the program would overwhelmingly benefit the wealthy and real estate developers. Housing Our Neighbors, a grassroots membership organization that fights for affordable housing and the rights of those facing housing precarity and eviction in Baltimore, called Mosby’s dollar homes program “a PR move.”
“Dollar houses take resources and time – things a lot of us just don’t have,” Housing Our Neighbors tweeted last week. “This isn’t really about equity, it’s a PR move by @Nick_Mosby that will give grants to people who can flip a house while some of us are still in tents and shelters. But go on.”
Not Enough
The dollar home proposal targets formerly redlined neighborhoods in East and West Baltimore. For longtime residents and city workers who are first-time homebuyers, dollar homes is part of a broader package of bills that would subsidize homeownership with up to $25,000 for general repairs, $10,000 for emergency repairs, and $5,000 to seniors facing foreclosure.
Marc Rollins, a Baltimore-based real estate investor who has handled vacant properties for the last three years, told Battleground Baltimore that Mosby’s numbers just don’t add up to enough support.
“$25,000, depending on what property you buy, is not enough,” Rollins told Battleground Baltimore. “Most of these houses need new floors, you probably still have lead paint. You have to rip out the entire house and put it back together. The total project can cost at least $60,000-100,000.”
The proposed dollar homes legislation requires applicants to secure funding for repairs, but doesn’t specify how low-income families—many of whom have no credit history or bad credit through no fault of their own—will come up with the additional necessary capital.
According to an FAQ posted to the council’s website, repairs and improvements “would be funded by an approved financier under the terms of a prime loan that is at or below market interest rate.” It does not offer any further details. Three contractors with extensive experience rehabbing vacants in Baltimore told Battleground Baltimore that the cost can range from $100,000-$250,000.
Also, Rollins added, many of the homes in Baltimore that would need less work have already been purchased by developers or contractors with means to buy them.
“You may find a gem here or there,” Rollins told Battleground Baltimore. “But mostly they are gone.”
‘Nostalgic Fantasy’
Mosby’s dollar homes program invokes Baltimore’s previous iteration of the dollar house program that existed over 40 years ago.
Back in 2017, when former councilperson Mary Pat Clarke proposed bringing the dollar homes program back, its actual effects were reexamined. In reality, fewer than 200 homes were sold through the past dollar homes program, mostly to the benefit of white homebuyers. The past program also targeted the neighborhoods of Federal Hill and Otterbein, which were centrally located, giving homebuyers access to instant equity. Housing stock was also in far better condition back then than it is today.
The current iteration of the program proposed by Mosby will likely involve higher home renovation costs. That’s because the program targets formerly redlined areas that are already significantly undervalued. As a result, home buyers run the risk of going underwater on their mortgage, which means they put more money into rehabbing the home than it was worth at appraisal. This can saddle them with tens of thousands of dollars in debt.
Parity Homes, a Black-owned developer that rehabs homes into affordable housing, estimates that in West Baltimore’s Harlem Park neighborhood, the appraisal gap is, on average, $70,000.
This year, Maryland passed legislation sponsored by Sen. Antonio Hayes and Del. Brook Lierman which created a fund with the Maryland Department of Housing and Community Development to bridge the appraisal gap in redlined neighborhoods and low-income census tracts across the state.
“If funded to the fullest extent by the department and the governor, this legislation could be enormously helpful in renovating vacant homes,” Brook Lierman, who is running for state comptroller, told Battleground Baltimore.
“It feels like an attempt at a simple solution to a complex problem that’s based in nostalgic fantasy that’s more likely to generate headlines and soundbites than have a real transformation.”
Ian Bukowski, former project manager for Habitat for Humanity of the Chesapeake
The program is yet to be funded, and it’s unclear when the pilot program will launch: “I would love to see an initial minimum funding of $15 million for this program,” Lierman said.
Other cities have experimented with dollar homes, often with less than stellar results.
One program that the council president’s office said they analyzed is in Philadelphia. According to a 2020 Philadelphia Inquirer analysis of the 2,314 houses sold through the city’s program since 2000, more than half remain vacant. A third were resold, netting millions for property-flipping developers. Meanwhile, nearly 400 buyers in Philadelphia fell behind on taxes, and owe the city over $867,000.
An investigation by The Kansas City Beacon into Kansas City’s initiative to sell city-owned properties for as little as a dollar found that the program is riddled with “potential conflicts of interest between board members and buyers, and fails to hold buyers accountable to its own requirements.” The Beacon found that, “as a result, a program meant to revitalize neighborhoods across the city leaves dozens of lots vacant for years.”
Ian Bukowski, former project manager for Habitat for Humanity of the Chesapeake, who worked for over a decade building affordable housing in Baltimore, questioned the efficacy of the dollar homes program.
“It feels like an attempt at a simple solution to a complex problem that’s based in nostalgic fantasy that’s more likely to generate headlines and soundbites than have a real transformation,” Bukowski said.
‘Larger reparative measures‘
The council president’s office said they spoke to “economic policy advisers, affordable housing experts, and community builders” about the dollar homes program. One leading housing advocate, who spoke on the condition of anonymity because his organization has not issued a formal statement about Mosby’s legislation, said neither he nor any advocates he’s talked to were consulted on the program. He noted that the city has multiple efforts underway to create affordable housing that include wrap-around services and other support, which studies show are key to successful new homeownership.
Mosby’s Communications Director Yvonne Wenger did not provide Battleground Baltimore with names of specific people they spoke to and instead pointed us to the FAQ, which also does not provide a list. The FAQ says this: “The team studied federal proposals by U.S. Rep. Maxine Waters and U.S. Sens. Chris Van Hollen and Raphael Warnock. The Council President’s office also looked into Baltimore’s dollar house program from the 1970s and studied hearings in 2017 and 2019 that evaluated the possibility of reprising the program, poring through public testimony offered at that time.”
[10 affordable housing units in the Curtis Bay neighborhood are] available to those who make less than $46,000 a year and provides them with a 99-year lease, enabling these new homeowners to establish equity if—or when—they leave the land trust and sell their property.
Dr. Lawrence Brown, a research scientist with the Center for Urban Health Equity at Morgan State University, told Battleground Baltimore he believes something much more ambitious needs to be established.
“For thousands of homes, you’d be talking about hundreds of millions to properly fund this to ensure that people had the capital,” Brown said. “Everybody gets excited about the dollar… But the issue for vacant homes is, ‘Do you have the capital to rehab it?’”
Baltimore is already on the cusp of creating affordable housing through a number of initiatives that are nearing completion. The city has thus far only distributed $750,000 of $33 million in funding through the Affordable Housing Trust Fund, which was the culmination of a decade of grassroots struggle to obtain investment into developments like community land trusts.
The South Baltimore Community Land Trust will use $750,000 for 10 units of affordable housing in the Curtis Bay neighborhood. This housing is available to those who make less than $46,000 a year and provides them with a 99-year lease, enabling these new homeowners to establish equity if—or when—they leave the land trust and sell their property.
“Seeing how communities are affected by disinvestment, this focus on community control and development is a way to bring about real change,” Meleny Thomas, executive director of the South Baltimore Community Land Trust, told me earlier this year. “The only way that can happen is through subsidized affordable homeownership opportunities and partnerships with other agencies.”
Community land trusts can play a key role in undoing the damage caused by racist public policy like redlining, divestment and segregation.
“Part of economic dispossession is not just that you hurt people individually, economically, but that entire neighborhoods are hurt economically,” Brown said. “Community Land Trusts help address the deprivation and the damage done to the community, through that democratic model of ownership.”
Brown himself has proposed a $3 billion racial equity social impact bond. In his book The Black Butterfly: The Harmful Politics of Race and Space in America, he proposes Baltimore neighborhood reparations for the harm racist public policy such as redlining has inflicted on Black communities.
“If we’re talking about the city healing Black neighborhoods, which it damaged itself, as an entity and through multiple agencies, then, for me, I would think that it’s important to be also advancing these larger reparative measures,” Brown said.
Bypassing Legislative Review
Mosby, who did not provide the details of his legislation to the mayor’s office beforehand, is invoking “Committee of the Whole” to bypass individual committees and chair hearings of the bill directly to the City Council. According to Mosby’s office, this is described as “a move that signifies the magnitude of the legislation and the potential it brings to transform the city.”
For Baltimore City historian Matthew Crenson, invoking the Committee of the Whole is “a way to get around the committee process and questions that could expose critical weak points in this proposal.”
For Baltimore City historian Matthew Crenson, invoking the Committee of the Whole is “a way to get around the committee process and questions that could expose critical weak points in this proposal.”
A source in city government, who wished to remain anonymous, explained some of the problems with Mosby’s program—starting with its origins in the idealized but actually fraught dollar homes program from the ’70s.
“The original dollar homes program was most accessible to people who could get large loans from banks to rehab properties and primarily benefited white, wealthy developers,” they told Battleground Baltimore.
Additionally, Mosby’s legislation could actually weaken current standards for equity, they explained: “This legislation duplicates existing city programs, in some cases with weaker equity standards, and includes provisions that are irrelevant to Baltimore City as a jurisdiction.”
For example, Baltimore already has a registry of properties that are available and has a cost estimate for those properties. And, they said, an analysis of the property disposition process, done in partnership with the Comptroller’s Office, is on its way.
“The Council’s proposed home repair program is completely duplicative of the program the City has operated for more than 20 years, and would codify weaker standards into law,” they said. “The City currently prioritizes people below 30% of AMI. This bill would apply to people below 60% of AMI. The Council bill limits support to $10,000 for an emergency. The current City program goes above and beyond that amount.”
Mosby’s legislation also includes a provision for mobile homes, but mobile homes do not exist within Baltimore City limits.
Mosby is heavily promoting the dollar houses program. In the four days after Mosby announced the legislation, the Baltimore City Council’s official Instagram account @baltcouncil posted nine times about the dollar houses program. In most of these posts, Mosby talks up the plan with slick-looking videos or poses with allies in council in crisp, professional photos. There is, of course, a hashtag, and there was even a teaser post. It said: “City Council President @nick.mosby wants to bring back Baltimore’s dollar houses. Stay tuned for more today on this big announcement. #HouseBaltimore.”
For many housing advocates, the dollar houses program and the way it is being sent through the council recalls Mosby’s similarly-hyped Security Deposit Alternatives Bill, which passed the City Council but was vetoed by Mayor Scott after renters and housing advocates rallied against the proposal. Activists called attention to the ways Mosby’s equity rhetoric belied the fact that the bill would have benefited Rhino, a venture capital-supported startup in the business of selling security deposit insurance, rather than renters. Housing advocates protested the bill, in one case by dropping banners around City Hall calling Mosby’s bill “a scam.”
Brown stressed that the veto of that bill ultimately led to better housing policies. In September, Scott signed a bill to offer low-income renters up to $2,000 towards their security deposit. This program is administered by the city instead of a third party like Rhino that could profit from the arrangement. Brown told Battleground Baltimore he hopes there is a similar chance to improve the dollar houses program.
“I’m pretty sure if the council president and the mayor can come together like they did before,” Brown said, “a better version, a stronger version of this can be put together.”
The first hearing for the dollar homes bill and companion legislation will take place on Dec. 20 at 5PM.
Additional reporting by Brandon Soderberg.
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