A real estate phoenix: Foreclosed second-home lots transformed into low-income housing
The story is all too familiar.
A property developer buys a large swath of land with grand plans to build high-end homes and sell them for a substantial profit. But the housing bubble bursts. The lots don’t move. The property sits empty, and eventually, the developer can’t repay the bank loan used to purchase the land. It falls into foreclosure and becomes an artifact of the U.S. real estate market crash.
In many cases, that is where the tale ends. But that’s not so for 50 acres on Jonathan Creek in Haywood County. Instead, it is a rare example of a silver lining to the recession. The story starts the same, but the end has a fairy-tale-like quality.
After the first developer failed, another one stepped forward and bought the 50 acres, with views of the Hemphill Mountains and utilities already installed, out of foreclosure. He planned to build vacation condominiums. He even partially built three small log cabins before personal issues forced him to sell the land, and sell it quickly.
That’s where Richard Bates came in. Envisioning a low-income, affordable housing neighborhood, Bates contacted the man and was able to buy the land — 75 plots total, at a bargain rate of $425,000. Because of the minimal cost of acquire the ready-for-development tract, he plans to pass on his own savings to the future homeowners.
“We really just wanted to build something for the working people,” Bates said.
Bates has been active in Christian philanthropy circles in Haywood County for years. He and his wife, Karen, started the Christian-based nonprofit Camp Bethel in 2006. The nonprofit is dedicated to helping the needy, but they also run a camp in Waynesville for Christian youth groups — which was opened up as a homeless shelter for a couple of winters during the recession.
Despite homes withering in value on the market, there are few options for low-income families wanting to buy a house of their own in Haywood County. Boiled down to the basics, the options are new, expensive homes, a trailer or a 50-year-old house in need of major repairs. And given the recent recession, banks aren’t willing to hand out mortgages to just anybody.
“It can be overwhelming for people. You have to have a lot of resources,” said Patsy Dowling, executive director of nonprofit Mountain Projects. “Anybody can have trouble.”
Even people with steady jobs, say a single mother of two, may be living paycheck-to-paycheck and find it difficult to squirrel away the required savings for a down payment. Yet, they also don’t necessarily qualify for help from agencies such as Mountain Projects or Habitat for Humanity. They fall through a gap. Again, that is where Bates and his nonprofit Camp Bethel come in.
Bates is orchestrating the construction of 75 quality, energy-efficient, affordable homes, which he plans to sell at cost — about $80,000 if all goes well. To keep the home prices low, however, Bates needs a mixture of donated or discounted goods and volunteer work.
Camp Bethel is looking for “anyone who wants to build a home for somebody” and “whatever we can get donated,” Bates said. “Any cost that is not incurred gets passed onto the buyer.”
In other words, the less it costs to build the homes, the cheaper he will sell them for.
Haywood Community College students and churchgoers from First Baptist in Maggie Valley, Long’s Chapel United Methodist Church and Morningstar United Methodist Church have all volunteered, performing tasks that Camp Bethel would have otherwise had to pay workers for. Scott’s Landscape and Lawn Care and Smoky Mountain Log Homes have also donated labor and materials.
Camp Bethel has worked out a deal with the Open Door, a nonprofit that serves the poor and homeless of Haywood County. Those in need of financial help can trade labor for whatever assistance they may need. The person sets a goal for themselves — anything from paying off a fine to getting their driver’s license to simply paying a bill.
Once they put in a requisite amount of work, then Camp Bethel will help them with that goal, for example writing a check directly to the courthouse to pay off a fine or to the Town of Waynesville to cover an electric bill.
Bates is also keeping an eye out for any deals. After searching on Craigslist, he found several new doors selling for $75 a piece. At retail, the same doors sold for $300, he said.
Currently, four homes are under construction. The houses will be about 800 square feet but will comfortably fit a family of three. There is a kitchen, bathroom, bedroom, a porch and another small room as well as an upstairs loft that could be storage space or act as a second bedroom.
Once complete, Camp Bethel will sell the home at cost. However, not just anyone can buy one. They have to meet several requirements (see box).
Bates is working with Mountain Projects to find people who do not meet its standards for housing help but still need aid. Dowling, executive director of the nonprofit, applauded Bates for striving to fill a troublesome gap in housing availability.
“It’s amazing — what a great gift to this community,” Dowling said. “It’s just a real blessing to have him here to help us.”
But ironically, Camp Bethel could not have built a quality, affordable housing neighborhood without the market crash. The recession forced the 50 acres Jonathan Creek property into foreclosure after the developer had already installed the expensive, yet necessary utility infrastructure. One developer lost out on his plans to build a development catering to second-home owners, but in turn set the stage for a small nonprofit to purchase the property at an unbelievably low price. If that wasn’t how it played out, Bethel Village would not exist.
“That is the only reason we can do it,” Bates said.
Qualify for housing
To qualify for a low-income home in Bethel Village neighborhood, people must:
• Be a state resident.
• Have a job.
• Qualify for a mortgage.
• Participate in a homeownership course.
• Commit to 200 volunteer hours toward constructing a home.
There are also income guidelines. To qualify, a household can’t make more than $35,435 for one person; $40,470 for two people; $45,505 for three people; $50,540 for four people; or $54,635 for five people.
To volunteer, call Kalon Stiggins at 863.557.5167. For more information on living at Bethel Village, call Richard Bates at 828.564.1142.