Bad economy slows implementation of new housing program

Thanks to the uncertainty of state funding and the ugly real estate scenario, the city of Manassas will be slowing down the implementation of its recently adopted employee housing program.

Last month, Manassas City Council budgeted and appropriated $675,000 for the program, which would provide assistance in down payments and closing costs for those employees who are eligible and have an interest in owning property in the city. The money was to come from the undesignated fund balance or “rainy day” fund.

A letter dated Sept. 24 from city manager Lawrence Hughes to all city and school employees states that there are “compelling reasons to implement the program.” However, both the city and school staffers are discussing alternative economic forecasts thanks to “unprecedented economic events and revenue shortfalls.”

In a telephone interview Monday, Hughes said it was too early to determine if the amount of money budgeted for the program would be lowered or when the program would be implemented. However, Hughes did say the city is moving forward with the necessary paperwork before the program is launched.

“We hope financial events and conditions will permit us to initiate the program in the near future,” Hughes stated in his letter.

Later that night during the council meeting, vice mayor Andrew Harrover recommended that the matter be sent back to the Land Use Committee for further discussion. Harrover said the amount will likely have to be lowered significantly and is unsure of how the money should be parceled out when the program is implemented.

“The size of the program needs to be revised,” Harrover said. “I am committed to the program but we have to be careful.”

City employees received a survey this spring to see if there would be interest in the program. That survey determined there was a need for assisting employees in their desire to live and work in their community. And because of the glut of abandoned and foreclosed homes in the city, the program would also serve as a way to improve neighborhoods.

Once enrolled in the program, an individual would receive an interest-free loan on a deferred second deed of trust and would have the life of a 30-year-fixed rate mortgage to pay off the loan.  Those enrolled in the city program will need to pay back the loan in its entirety when they leave city employment, sell the house, don’t use the house as a primary residence or re-finance their mortgage.

Staff writer Kipp Hanley can be recheck at 703-369-5738.