A plan to build a sprawling $800 million biotechnology park adjacent to Johns Hopkins Hospital has some East Baltimore residents worried that they will not be able to afford to buy new homes in the area despite the roughly $150,000 they will receive for homes that will be demolished to make way for offices, shops and residences.
East Baltimore Development Inc., a nonprofit organization created by the city to manage the project, has promised to come up with money from an equity fund and specially tailored mortgage loans to help residents buy new houses, which are expected to have a starting price of $250,000.
But some homeowners say the price of the new houses will be so steep that they will not be able to purchase homes in the upscale neighborhood without going into debt.
"We want to make sure that we can get a house for a house," said Donald Gresham, a 20-year homeowner and chairman of the Save Middle East Action Committee. "No one wants to take on any more debt."
The disgruntled property owners are rallying behind a "House for a House" slogan and will meet today at the EBDI offices, 1809 Ashland Ave., to discuss alternate plans with development officials.
Gresham and other residents wrote a memorandum to East Baltimore Development Inc. officials this month in which they clearly stated their opposition to the equity/mortgage plan.
"[This plan] can lead to a plantation where people are not the true masters of their own homes," the July 3 memo said. "And frankly, if asked, our recommendation [to residents and others] would be: 'Look into it. But you will want to be very, very careful about it.' Let the buyer beware."
The equity fund has been "seeded" with $6 million in city and private funds, but it is unclear who would manage it. When residents sell their homes, the fund would receive the value of the original loan plus a percentage of the increase in the property's value. EBDI officials say the fund is a cutting-edge financial tool that could be used to help future families become homeowners in the neighborhood.
They argue that old housing investment models, including publicly subsidized construction and tax incentives to developers to build low-income housing, will not work as effectively.
"This is something that is critically important to ensure that what is delivered here works not just for a few years but for the course of decades as well," said Jack Shannon, president and chief executive officer of EBDI.
"We don't want to undercut a developing real estate market," Shannon said.
EBDI officials say they are responding to residents' concerns. They are talking with developers about building lower-priced homes sooner, as well as building more of them. Shannon said that he and his staff are also looking into ways to renovate existing rowhouses within the revitalization area, which could provide houses in a price range that would be affordable to residents, some of whom make less than $12,000 a year.
Shannon said some of the existing homeowners could move into senior apartments or to houses in other parts of the city. As part of the project, some residents are receiving additional training and education so that they can get jobs at the new biotech park and perhaps increase their household income.
Residents who are leasing houses or apartments also are receiving education on the benefits of homeownership, as well as other financial advice.
"If we are going to deliver this project, we are going to have to take new approaches," Shannon said, referring to the sweeping project, which calls for the creation of thousands of jobs and the transformation of one of the most decayed and crime-ridden areas of the city.
The 88-acre biotech project is about to enter its second phase. In the initial phase, covering 30 acres north of the Johns Hopkins medical campus, 916 properties, 278 of which were occupied, were demolished and 396 families had to be relocated. Shannon said that a senior apartment complex is near completion and that 27 of the 74 units have been leased to East Baltimore residents. Residents, whether homeowners or renters, have dibs on housing in the revitalization area.
Shannon said that about the same number of properties will be demolished or renovated as part of phase two, which covers more than 50 acres. In the end, five life sciences buildings will be constructed, as well as a mix of housing, including "work force" apartment lofts for social workers, teachers and police officers. There will also be housing for biotech professionals that will be priced at market rate, with some units going for $300,000 or more.
"There is a lot of resistance to the equity fund owning a piece of people's houses," said Nathan Sooy, executive director of the Save Middle East Action Committee. "People don't like the idea. There is a visceral resistance to someone else owning part of the house."
Sooy said that many residents own their homes outright because deeds were passed down by parents or other relatives. Such residents are not willing to take on new debt to purchase new houses. Sooy said residents also don't like the mortgage deal proposed by EBDI. Under the plan, mortgage payments would be tied to a homeowner's monthly income and would represent 30 percent of the total sum.
"It seems like a lot of money to people," Sooy said. "And as we were discussing it with residents, we really couldn't find anyone who really wanted to do this."
Sooy and others say that EBDI is quietly trying to move low-income residents out to make way for future employees of Johns Hopkins, which will use about one-third of the office space in the new biotech park.
"Remember, the whole thing here is to serve the business interest of Johns Hopkins University," said Sooy. "And a lot of the vision has to do with having places for people who work in the biotech industry to live."
Shannon denied that plan calls for displacing area residents to make way for workers at the biotech park. A spokesman for the Johns Hopkins University declined to answer questions about the project.
"There is a level of mistrust and in some cases cynicism, in large part because there have been lots of past projects and promises and the results have not mirrored the commitments that were made," said Shannon, who acknowledged that EBDI had been slow in informing residents about more affordable housing options. He promised to be more communicative.
Shannon said residents and development officials had sparred before, but the two sides had struck a more cooperative chord recently. "We are past opposition to the entire plan," said Shannon, "but we are still trying to figure out the best way to move forward and that is not easy." (baltimoresun.com)
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