Despite pushback, Johnson County city OKs building 14 affordable single-family homes

After major pushback from neighbors, the Olathe City Council on Tuesday advanced plans for Habitat for Humanity’s affordable housing development.

The council voted unanimously to approve Habitat’s plans for the $5.4 million project, to include 14 affordable, single-family homes at the northeast corner of West 159th Street and South Black Bob Road in south Olathe. Habitat for Humanity of Kansas City is partnering with Rev. Kevin Schutte and Pathway Community Church, which owns the land, to develop the first-of-its-kind project for Johnson County.

The council also agreed to a resolution expressing support for Johnson County allocating $1 million in federal funds for the project, allocated by the U.S. Department of Housing and Urban Development. County commissioners in June already agreed to spend another $950,000 in federal COVID-19 relief dollars on street and infrastructure improvements for the development.

“I think this is a really unique project. We haven’t seen something like this in our community before,” Councilman Kevin Gilmore said Tuesday. “I think it’s very interesting in terms of addressing a need of housing, giving these individuals an opportunity to build equity and then move on to bigger and better things. I frankly applaud the commission for this initiative and the church that’s involved on that corner in helping to make this happen.”

That county commission’s approval of the $950,000 this past spring set off widespread concerns from neighbors, who packed meetings to push for answers on how the project would affect property values and fit in with the upscale subdivisions nearby.

At the June meeting, a county staff member misspoke and said the project already had received city approval. Neighbors, saying they felt blindsided and criticizing county officials for a lack of transparency, came out in force to argue the funding should not have been granted before city approval, or at all.

Marvin Peck, president of the Woodland Creek Homeowners Association, told the council on Tuesday that he worries about nearly $2 million going toward 14 homes.

“I don’t know that’s necessarily the best use of the funds in this instance. It was merely something that just kind of fell in everybody’s lap to say, ‘Hey, let’s hurry up and do this, right, because we have a deadline. Let’s grant this to them and let them get going,’” he said, referencing the county’s timeline to spend COVID relief dollars.

Christina Ashie Guidry, with United Community Services of Johnson County, which works on affordable housing solutions, countered that the project helps fill a significant need.

“There is a shortage of affordable housing here in Olathe,” she told the council. “I think all of us are intimately familiar with that. We’ve talked to retirees who can’t downsize. Young families who can’t buy new homes in our area. And we’ve seen the effects on the workforce.”

She said such a public-private partnership “is really critical to bringing in necessary housing for our workforce and for our families here in Johnson County.”

The site will not require rezoning because it was zoned for single-family residential in 2012, city officials said.

The 14 homes will range from 1,400 to 2,400 square feet, said Lindsay Hicks, president and CEO of Habitat for Humanity of Kansas City. Residents will purchase the three- to five-bedroom homes, in a land trust, ensuring they stay affordable and are leased to homebuyers for 99 years.

Habitat acts as the developer and construction team, as well as the lender, offering zero-interest loans. Property taxes and insurance are escrowed and paid through Habitat.

Homeowners in the land trust receive their equity back, as they would in a market rate home. But instead of retaining 100% of the market appreciation of the home, they retain 25%. The remaining 75% stays with the home to keep the price affordable for the next buyer, according to county documents.

Families will qualify if their income is between 30% and 80% of the area median income — up to $65,600 for a two-person household — and if they meet several other requirements. Homeowners are partly selected based on need and ability to afford a mortgage payment of 30% of their gross monthly income.

Hicks previously said she hopes the homes will be priced at about $250,000. She said they will be appraised within the land trust and will have no effect on surrounding homes values.

And Habitat, she said, has several programs to help homeowners with the maintenance of their properties.

The project is one of several Johnson County commissioners have allocated funding toward, as they have made affordable housing a high priority amid soaring home prices. Commissioners approved three other housing initiatives in June, including a $200,000 program offering incentives to landlords who will rent units to low-income tenants with housing vouchers. They also voted to put $50,000 toward reimbursing landlords for damages or lost rent. And they agreed to study establishing a housing trust fund, where money would go toward preserving and increasing affordable housing.

Commissioners next week will consider using federal funding to spend $6.5 million purchasing a Lenexa hotel to convert to a permanent homeless shelter, something sorely missing in Johnson County.

And the county commission will consider allocating the $1 million for the Habitat project as early as next week’s meeting.