By Becky Mickel
The number of houses for sale in Lexington — 64 — is growing too fast, City Council members say.
There are too many empty “affordable” homes in Lexington, they say, and that could hurt the city’s housing market.
During its March 15 meeting, City Council reconsidered Spotswood Cottages, a plan to build 13 affordable, apartment-styled houses across from Stonewall Jackson Memorial Cemetery in Lexington.
Members will vote this month on whether the 2.2 acres that have been vacant for more than 20 years should house cottages.
City Council Member David Cox said if the demand for affordable housing in Lexington is met, adding more low-cost housing could depress Lexington home values.
Cottages in the proposed development would cost between $120,000 and $283,000.
However, Thompson’s Knoll Housing Counselor Michael Lonergan said Lexington residents still need better-priced housing options. Thompson’s Knoll is a public/private development of homes for residents of mixed incomes in Lexington. Ground was broken on the development just last month.
In the last 12 months, houses in Lexington sold at an average price of $270,186, about double the planned cost of a Thompson’s Knoll house. By March 2013, the Thompson’s Knoll Development will add 24 more affordable houses to the Lexington market.
Houses in Thompson’s Knoll will cost between $115,000 and $150,000 – affordable for a family of four making $44,400 yearly, Lonergan said.
The development is a modestly priced alternative for firefighters, police officers, teachers and city workers who cannot afford an average-priced home in Lexington, Lonergan said. And older homes often need expensive updates.
Gladys Hopkins, an agent with James River Realty, agreed with Lonergan. She said some Lexington homes were last renovated in 1965.
“They aren’t disasters, but people want them more modernized,” Hopkins said.
Although 39 houses sold in Lexington in the last 12 months, Hopkins said most houses on the market are overpriced.
Buyers often opt to live in Buena Vista or Rockbridge County, where houses are cheaper, she said.
Last year, houses in Buena Vista sold at an average price of $88,580, far less than the average in Lexington and even for Thompson’s Knoll.
The demand for rental homes has increased since Hopkins joined her firm five years ago, she said, because people want to stay within Lexington city limits.
Amy Gianniny, owner of The Lexington Company, a firm managing 300 rental units in the area, now manages houses at 311 and 313 Massie St. in Lexington.
The houses have been empty for more than two years.
Lexington’s Threshold Committee, a nonprofit housing group that oversees affordable homes in Lexington, couldn’t find buyers.
City Council and Threshold member Marilyn Alexander said the Massie Street houses did not sell even after renovations, lowered asking prices and advertisements in local newspapers.
Gianniny will find renters that meet Threshold’s low- to middle-income requirements for these “rent-to-own” homes.
A resident will rent a Massie Street house from the city until the renter establishes credit that qualifies for a mortgage and can buy the house.
Rent-to-own homes are popular in today’s housing market because of stricter mortgage regulations and buyer qualifications, Gianniny said.
“It has been difficult to get a buyer who’s crisp and clean into a house, so it’s a great avenue for the city,” she said.
The Massie Street houses are just two of 25 empty homes in Lexington that need buyers.
In Buena Vista, 87 houses are for sale, and 30 of those are empty.