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The City of Covington has taken a proactive and innovative approach to address a failed and declining subdivision less than one-mile from the town square.
Approved for development in 2003, Walker’s Bend was to have 249 residential units on 50 acres.  The lots varied in size from 35’x110’ to 55’x110’ and were to allow both attached, fee-simple townhomes and single-family detached homes.
Construction of homes began in early 2005 and by 2007 72 single-family detached homes and eight attached townhomes had been built.  The homes initially sold for $110,000 to $150,000 and were selling at rates comparable to similar developments in Covington and Newton County.  By early 2007 50 homes had sold to their occupants. 
Sales stalled in mid-2007 and the builder and developer went bankrupt in 2008.  Eight different banks, including the FDIC which had seized the assets of one of the banks in 2008, were left holding a combined debt of over $5,000,000.
In the summer of 2008 one bank auctioned 22 finished, unoccupied homes with an average sales price of $57,000 each.  All but two were purchased by investors who bought them as rental properties.  Also at this point several homeowners had faced foreclosure and the neighborhood was rapidly tipping toward 50% owner occupied and 50% rental.
In 2009 the Covington City Council approved an urban redevelopment plan that included Walker’s Bend within its boundaries. The council then created The Covington Redevelopment Authority to oversee the implementation of the plan.  By the Fall of 2009, the council earmarked $1,000,000 to be invested in the purchase of vacant lots in Walker’s Bend with a goal of refining the original design and finishing the development as a mixed-use, mixed-income, Earth Craft Community.

With the realization that market- rate, for-sale homes in Covington and Newton County were going to be in low demand for the foreseeable future, the CRA decided to look toward high-quality affordable rental partners to make the initial investments toward completing the development.
The Covington Housing Authority (CHA) was the first partner to be brought on board with unanimous support from their board of directors.  The CHA was seen as the best partner to take the residential units of the mixed-use component at the entrance to the development.  The intent here was also for the CHA to be an initial occupant of some of the ground-floor commercial/office space with a community room and perhaps an office for a proposed credit-repair/home-ownership counseling center.  The CRA would obtain financing to build-out the ground-floor retail/office space and serve as landlord for a proposed business incubator program.

A second rental partner was also approached.  Affordable Equity Partners (AEP), a for-profit, tax-credit housing developer based in Missouri with projects in Georgia had recently been approved for tax-credit financing for a 60 unit senior apartment complex in downtown Covington.  AEP expressed interest in partnering with the CRA to build 32 single-family, detached rental homes with dedicated greenspace.  These units would be available as lease/purchase with AEP committed to owning and maintaining them for a minimum of fifteen years.

The City of Covington has also partnered with Habitat for Humanity of Newton County in the Neighborhood Stabilization Program (NSP) and has utilized this innovative program from Housing and Urban Development (HUD) to begin the stabilization of Walker’s Bend.  An initial purchase of eight townhomes took place in late 2009 and the homes were sold to Habitat qualified customers in early 2010.  An additional foreclosed home in Walker’s Bend was purchased in 2010 and Habitat is working on minor repairs prior to selling the home.  Over $500,000 has been invested in the purchase of foreclosed homes in Walker’s Bend using NSP funds.
With a desire to keep a mix of housing types in the development and a proper balance of owner-occupied units the CRA also sought partners for building market-rate, for-sale homes as well. Meeting with members of the Newton County Homebuilder’s Association a plan book was put together and pricing agreed upon.  The small two and three bedroom homes range from 800 square feet to 1,200 square feet and are priced from $75,000 to $95,000.
With the awareness that affordable housing relies on the ability of the homeowner to continue to heat, cool and maintain the home, the designs include metal roofs for durability and energy efficiency, cement siding for long-term durability, high-efficiency heat-pump units, low-e insulated windows, and high R-value wall and ceiling insulation as well as Energy Star appliances.  All of the homes will be built to Earth Craft Home standards.
Two local banks are also a part of the process, agreeing to fund qualified buyers as the CRA brings them to the table.  Knowing that the 20% down payment requirement would likely limit the number of people who could take advantage of this opportunity, the City of Covington applied for the $300,000 CHIP down payment assistance program, offering $15,000 forgivable down payment loans to qualified buyers.

The CRA will act as the project developer and will be responsible for marketing the for-sale homes to qualified buyers as well as coordinating the application process for both the down payment assistance and the mortgage.  Once the down payment and home loan are approved the CRA will step back and allow the bank, the home-buyer, and the builder to complete the process in a conventional, contract-build transaction.
The redevelopment of Walker’s Bend has been accepted into the Earth Craft Community program and is currently tracking the points necessary to become certified.  It is the CRA’s intent to raise the level of quality for affordable housing in Covington.

Utilizing the $1,000,000 loan from the Covington City Council, the Covington Redevelopment Authority (CRA) has purchased 42 single-family lots, 17 townhome lots and three multi-family pads from five different banks and the FDIC. The CRA has also facilitated the purchase of 19 additional lots by AEP, a partner in the redevelopment, from an asset management company working for the FDIC.  The time and sleuthing skills required tracking down the ownership and decision-makers for properties controlled by the FDIC cannot be underestimated.

A condition of the 2003 rezoning of the property was that the developer create a home owners association (HOA) and restrictive covenants.  Draft covenants and a HOA declaration were submitted during the permitting but never recorded with any deeds, therefore the neighborhood was in violation of its zoning and without covenants and the HOA.
Several homeowners in the neighborhood banded together during the Summer of 2009 to discuss creating a HOA and began volunteering to maintain the common areas.  The city’s planning director met with the group in August 2009 to discuss potential options for the neighborhood’s future.  One of the home owners was appointed to the CRA board of directors.

It was determined that an overlay ordinance would be the best way to address the lack of restrictive covenants.  A draft overlay ordinance was written with property maintenance and architectural review guidelines as the main issues to be addressed.  The draft was circulated to members of the CRA and the home owners and revised with their input.

The home owners have also successfully petitioned KaBOOM for a playground grant and are working towards the neighborhood playground design charrette.  The CRA has also committed to further park development as the project progresses