City Slick: 3 Ways Home Buyers Are Finding New Homes In Urban Centers
Finding an affordable new home or condominium in many urban centers is a challenge. Rents are going up, and new housing inventory is down, making for scarce opportunities to find affordable in-town properties.
If you have your heart set on owning a squeaky clean, brand new place, and you must live in town, don't give up. There are still some shrewd ways to get that new home you want.
1) Take advantage of inclusionary zoning rules.
In urban areas, middle-class residents often make too much money to apply for housing assistance in high-rent areas. But they are also unable to earn enough to pay the standard rent prices, or to afford home ownership, in desirable neighborhoods.
Cities like Boston have established inclusionary policies to even out the playing field. Developers must reserve a certain number of their apartments, condos or homes for middle class residents. The applicants must pass an income-reporting process and meet other criteria to qualify for one of the lower-cost units.
These deals are available even in California's tight, bloated real estate market, where inclusionary zoning will get you a million-dollar home for $175,000.
2) Check out mixed-income developments.
Mixed-income developments operate on the same principal as the inclusionary zoning rules, and they are often funded in part by government grants.
Often, more expensive homes and rental properties are built up around low-income housing developments. The low-income development is then torn down to make way for a mixture of apartments, condominiums and town homes. A certain percentage of the new homes and units must be subsidized housing, or affordable housing, to qualify for grant assistance.
The residents are given housing vouchers to relocate before their buildings are removed, but many complain that new developments don't replace the total number of subsidized units they destroy, leaving many low-income residents with no choice but to rent in more undesirable neighborhoods than the ones torn down. However, the new money brought into communities by the developments can revitalize old neighborhoods.
Other mixed-income developments are the result of inclusionary policies on the part of developers, who realize that having a vibrant community means offering a variety of homes in all price ranges. Look for partnerships between contractors and non-profit agencies to spur even more mixed-income developments.
3) Attend city vacant lot auctions.
If you're prepared to hire your own contractors, consider bidding on a vacant lot. Cities like Newark, NJ have an abundance of eyesores, in the form of abandoned, vacant lots left behind when owners skipped out on tax payments, died or otherwise lost control of their properties.
City leaders would rather these properties go to owners who will build nice homes on the lots. New dwellings compliment the neighborhoods rather than making them look blighted and run down. In Newark, the lots go for a mere $1,000.
Vacant lots from Philly to West Palm Beach have been sold at a deep discount, but there are restrictions.
You can also attend property tax auctions, and sometimes snag a bargain that way, but again, there are certain criteria that must be met before you can bid on any of the available new homes for sale.
