Meeting the Challenge: Napa County’s Work Proximity Housing Program
This blog posting and video are part of a series being produced by CSAC to highlight county best practices through our annual Challenge Awards. These awards recognize the innovative and creative spirit of California county governments as they find new and effective ways of providing programs and services to their citizens. The Challenge Awards provide California’s 58 counties an opportunity to share their best practices with counties around the state and nation. The programs being highlighted are recipients of the 2012 awards.
To review a video about how Napa County is meeting the challenge, click here.
For many people, purchasing that first home is the financial equivalent of climbing Mt. Everest. The process is made even more difficult in destination areas such as Napa County where housing prices are high and homes are in demand. It’s not uncommon for a house on the market to receive numerous offers. So, what do you do if you are a first-time homebuyer who wants to live in the community in which you work, yet you have limited resources for a down payment?
If you’re smart, you take advantage of Napa County’s Work Proximity Housing Program, the brainchild of Supervisor Mark Luce.
“Our workers have a hard time competing for housing because they are competing against a world market where people can afford to pay more for these homes,” Supervisor Luce says. “So we went about trying to figure out how we could assist our low and moderate-income workers who work in Napa, live in Napa.”
The proximity program is essentially a new way of looking at affordable housing. “We shifted to a buyer paradigm instead of a property management paradigm. Let’s work with buyers. We found we could specifically qualify low and moderate-income workers and provide them assistance and then allow them to buy any home they wanted in our community,” he explains.
Through the program, Napa County provides a 10 percent silent second mortgage to potential homebuyers. To qualify, prospective homeowners must meet certain specific income standards, work within 15 miles of the intended residence and live in the home. The homebuyer pays the loan back at the time he/she refinances or sells the home; the homebuyer pays no monthly payments, only an appreciation share on the percent of the loan.
How does it work? Say a home is purchased for $350,000, and the buyer puts down 20 percent (of which 10 percent is money loaned by the county through the program). Five years later, the house is sold for $450,000; the county receives its 10 percent back, which has turned into a $10,000 profit; this money is then invested back into the program in order to help other potential homebuyers.
And the program is making a difference. Just ask Kevin Lemieux who previously was commuting from Sacramento to his job with Napa County each day; or ask Alan Wagner, who now has a home in the city for their three adopted children who have special needs. The program loaned the Wagners $46,730, which allowed them to move into the city. “What a blessing this program is to families like ours who just need a little boost,” they said.
Beyond improving the quality of life for homeowners, the proximity program has environmental and economic benefits. By helping people live closer to their work, there is less commuting, meaning reduced traffic congestion and CO2 emissions. The program also helps keep money in local economy, as homeowners now shop locally.
“I have absolute pride in my house,” says new homeowner Michelle Carreon. “The bottom line is I wouldn’t have had this opportunity if I didn’t have this program,”
Kevin Lemieux agrees and wholeheartedly urges others to check out the program. “This program is completely worthwhile. … I’ve never heard anything like it in my life.”