Florida Keys News - Marathon Free Press
Friday, January 29, 2010
Home buyer loan loses deed restriction requirement

A first-time home buyer assistance program ordinance underwent a major change at Tuesday's Marathon City Council meeting.

The ordinance would direct up to $100,000 in city money in the affordable housing fund to be loaned out to Marathon residents who qualify for affordable housing under Monroe County guidelines. Those guidelines group households in categories such as very-low-, low- and moderate-income, which would all be under the median yearly Monroe County income of about $65,000.

The ordinance, proposed by Mayor Ginger Snead, would dole out $10,000 to qualified applicants to use for a down payment on a home. In the original version of the ordinance, the home to be purchased would be deed-restricted as affordable housing for 30 years -- the term of the no-interest loan.

The council voted unanimously to remove the deed-restriction provision after some debate as to the merit of helping someone buy a home that would have a reduced value because of the restriction.

"I think deed restrictions, in the length of time we're discussing, are not in the best interest of the people getting into the homes -- who may not understand the problems of deed restrictions," said Councilman Dick Ramsay.

Though the council initially discussed lifting a deed restriction when the $10,000 loan was repaid, City Attorney John Herrin pointed out that the restriction itself wouldn't serve a useful purpose in that circumstance.

"If you make [affordable housing] criteria the qualifying criteria for the loan and drop off the [deed restriction] the money is going for the affordable purpose and being recycled time and time again," Herrin said, pointing out that only individuals qualified under county income guidelines could get the money in the first place.

Local real estate agent Karen Farley Wilkinson felt the ordinance had more problems than the deed restriction.

"I know your heart's in the right direction," she said. "Ten thousand dollars is just enough to get some person in over their head. It's not enough to make a difference when you're buying a home."

Middle Keys Land Trust's Rick Casey said the $10,000 figure was common because it was statistically determined to be enough to help would-be home buyers and was a manageable sum for administrative purposes. Casey also argued a losing case to keep the deed restrictions.

"Deed restrictions don't get you stuck in a house," he said. "Buying at the wrong time at the wrong price get you stuck."

But Casey extolled the virtues of the program, even without the restriction.

"One thing first time home ownership does, obviously, is to stimulate the housing market, stimulate taxes," he said. "And then there are the improvements that come after someone closes. It takes people that are currently renting and moves them into ownership homes and opens up the rentals."

Snead, satisfied with the changes, endorsed the revised ordinance.

"I brought this up because there is $100,000 that is supposed to be helping with affordable housing," Snead said. "If it is the pleasure of this council that the affordable deed restriction should be removed when the loan is repaid, and they feel that it will effectively help, then it's the council's decision."

In other news

• An amnesty period for expired city building permits will be extended for one year. Vice Mayor Mike Cinque proposed the extension so the city can continue to close out a backlog of over 2,000 expired permits.

"I'm doing this because I believe the property owner needs some protection," Cinque said. He had initially proposed an unlimited extension to the amnesty, but other council members felt that would leave the door open to abuse.

• USI insurance Services consultant Steve Golden addressed the council to explain the service he and his company provided in securing insurance benefits for the city, saying he "shopped" for the best insurance package for the city every year.

Ramsay was critical of the package the city is currently enrolled in, which requires zero contribution from staff for the plan.

"Were we to have some sort of employee participation, we would obviously be looking at cost savings," Ramsay said. "I am encouraging this council to start looking at the budget before we start looking at the budget. We have to tighten our belt beyond what feels good."

Council directed Golden to start looking at what packages other local municipalities have -- a process called benchmarking -- and what savings the city could expect from changes.

• Treasure Road residents addressed council to raise concerns about sand from Sombrero Beach accumulating in their canal. Residents say previous dredging projects are offset by beach renourishments and hurricanes again moving the sand back into the canal, and claim the current depth is only about 1 foot. They asked the city to study the problem and abandoned plans for obstacles to the sand migration before again renourishing the beach.

• Spottswood Co. representative Peter Batty thanked the council and the Marathon planning and building departments for cooperation on the Holiday Inn renovation project, and updated the council on the status of the Faro Blanco project. Though council members showed frustration with the lack of progress at the site, Batty explained that the Faro Blanco project would not proceed until financing becomes available.

"We just can't get it funded at this time," Batty said. "If we could get it funded, we would start immediately."

Ramsay thanked the Spottswood Co. for investing in Marathon, but asked that they find a solution quickly.

"Anything you can do to break the piggybank and pull anything out of it, please do," he said.

• An appeal hearing on the Chappy's right of way was set for the Feb. 23 meeting of City Council. Nick Stevens, attorney for the Knights Key Inn, asked for the item to be heard at that time, and council agreed.

• Council passed an ordinance on for second reading that would dissolve the current City Code Board and allow council members to appoint one representative each to a new board. Two other code board members would be voted on at-large by the council, as is currently done with all seven of the Code Board members.

The only change to the ordinance was to add a provision to dismiss appointed members of the Code Board only by a vote of at least four City Council members. Council members Worthington and Keating dissented, but the motion carried on a 3-2 vote.

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