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Proposed change positions down payment program to put Peoria rental properties in homeowner's hands

A "For Rent" sign is displayed outside a building in Philadelphia, June 22, 2022.
Matt Rourke
FILE - A "For Rent" sign is displayed outside a building in Philadelphia, June 22, 2022. The cost of renting an apartment is easing after skyrocketing in recent years, though it remain painfully high for many Americans. The U.S. median rent rose 2.4% in January 2023 from a year earlier to $1,942, the lowest annual increase since June 2021, according to data from Rent, which tracks listings for apartment and rental houses. (AP Photo/Matt Rourke, File)

The Peoria City Council will consider a substantial change to the city's home down payment assistance program this week.

The program, created in 2022 with funding from the American Rescue Plan Act, provided $5,000 for a down payment for home buyers purchasing a house in “qualified Census tracts” designated by the federal government.

Community Development Director Joe Dulin says since the program’s implementation it has seen about 25 to 30 purchases each year, creating as many as 60 new homeowners in Peoria.

“It’s kind of a win-win for a multitude of reasons,” Dulin said. “By giving [home buyers] a little more breathing room on their finances, homeownership is a good way for people to start building generational wealth, if they can afford it.”

The proposed change on the agenda for council Tuesday would raise the $5,000 in assistance to $10,000, if homeowners are purchasing the property from a landlord or investment company and they agree to live in the house for at least two years.

“Unfortunately, we’ve seen a lot of investor-owned properties come into our community, it’s not just something that Peoria is experiencing, it’s kind of a nationwide trend,” Dulin said. “And so what this is trying to do is really encourage people to go after those properties that might be on the market that are not owner occupied.”

Dulin says there’s a variety of advantages to owner-occupied properties. He says there’s less turnover, more investment in the neighborhood and a higher likelihood of a healthy split between owner-occupied and rental properties.

The second change in the proposal will combine the $200,000 funding pool for the 2024 down payment program with the $200,000 funding pool for the 2024 housing rehabilitation program. Dulin says there’s a variety of reasons for the change.

“The [American Rescue Plan] money has an expiration date of 2026,” Dulin said. “And, essentially, that’s budgeted and programmed by the end of 2024. So you really have to know what you’re going to spend it on.”

Dulin says this means the city will likely look at “for-sure” projects with ARPA funding in 2025, rather than opportunities like this one that are reliant on demand. Pooling the funds also means that, in this last year of both programs, there will be ample funding available for whatever program proves more popular.

The council is set to consider the changes Tuesday night. You can read them in full here.

Collin Schopp is a reporter at WCBU. He joined the station in 2022.