WILMINGTON, DE. - The Eastlake neighborhood was known as “the Bucket.” The word was that if people lived in Eastlake, they had hit the bottom of the bucket. The 267-unit Eastlake public housing development, one of many in this crime-ridden neighborhood, was built in 1943. It had become dilapidated despite the best efforts of the Wilmington Housing Authority (WHA).

After the agency called for proposals to fix the project, it took a decade for locally based Leon N. Weiner & Associates, Inc., to transform the site (about the size of three city blocks) into The Village of Eastlake, an affordable project consisting of 70 rental and 90 homeownership units. It is the homeownership portion for which the project is a finalist for this year’s Readers’ Choice award, as that phase was most recently completed.

“It’s gratifying to see something that, in 1997, was just a vision,” said Glenn Brooks, senior vice president for Leon N. Weiner & Associates, Inc. “We were able to deliver nice, affordable homes and the project is doing what we thought it was going to do 10 years later.”

The developer envisioned the project jumpstarting more affordable developments in the area. A nonprofit and a for-profit firm have teamed up to build 72 town homes in the neighborhood. Brooks recently attended that development’s groundbreaking.

“Several people noted that those town homes would not have been possible had we not done ours,” said Brooks.

All 90 units at Eastlake consist of three bedrooms. Sixty-two are town homes (1,360 square feet each). The remaining are duplexes (1,650 square feet each). The homes are reserved for households with widely varying incomes—as low as 26 percent of the AMI up to a high of 115 percent. A majority of them (59 homes) are reserved for households earning between 26 percent and 80 percent of the AMI.

HUD awarded the homeownership phase $5.27 million in HOPE VI funds. PNC Bank provided a $3.58 million construction loan. The Federal Home Loan Bank of Pittsburgh awarded $490,000. The state of Delaware provided $250,000 for street improvements, as the developer razed the old project and new streets had to be built. The developer closed the funding gap by creating a Program Income Fund. This fund had three sources: $1.1 million that became available when the rental portion of the development went to permanent endorsement; reinvested lot transfer fees; and settlement proceeds. WHA owned the site, so it agreed to reinvest the acquisition cost of the land back into the development at the time of each move-in.

“Buyers had to maximize, within reasonable underwriting standards, their first mortgage,” said Brooks. “A person coming in with a 50 percent AMI paid the same sales price as a buyer with 100 percent AMI. The WHA provided soft second loans for the lower income people.”

These loans came from the Program Income Fund. Buyers had three different homeownership counseling agencies to help them through the buying process.

Home prices in the development have risen from $75,000 for a town home and $85,000 for a duplex, to $124,900 and $145,900, respectively. At press time, 83 homes had been sold. The remaining seven were under contract. Homes at the Village of Eastlake are priced approximately $20,000 less than comparable homes in the neighborhood.

Additional project information, as provided in application by the nominator.

Q. Why does the nominated project deserve to be recognized based on the award criteria of this contest?

A. Built in 1943, the Eastlake public housing development consisted of 267 brick rental units that had become dilapidated and rundown, despite the best efforts of the Wilmington Housing Authority. Violent crime and drug abuse grew to proportions exceeding some of the worst per capita crime rates in the nation. In 1997, Wilmington Police were called to Eastlake over 5,000 times. Eastlake became known locally as “the Bucket;” if you live in Eastlake, you’ve hit the bottom of the bucket. All of that changed when the developers formed a unique public-private partnership to revitalize the community.

Leon N. Weiner & Associates, Inc. and the Wilmington Housing Authority, the co-developers, dramatically improved this community by razing all of the public housing units and securing financing to rebuild 70 rental homes, a community center, and 90 homeownership units. By mid-2007, the final first time homebuyer will have gone to settlement.

Both the rental and homeownership units share a unified design using an array of roof profiles and exterior materials, thus adding visual variety to the development. This is a marked change from the monotonous lines of brick walls that stigmatized the former Eastlake as a low-income housing project.

Additionally, the social and economic fabric of the community has been changed for the better by the diverse population of homebuyers with incomes between a low of 26 percent of the median income (AMI) to a high of 114 percent of the AMI. Home prices in the Eastlake development have risen from a starting point of $75,000 for a town home and $85,000 for a duplex home to $124,900 for a town home and $145,900 for the final duplex.

Buyers in Eastlake had three different homeownership counseling agencies available to assist them in the pre- and post-closing processes. These counseling courses enabled many buyers that otherwise would or could not have purchased a home become proud homeowners. Now that they are buyers in the community, owners can participate in some of the services offered at the Leon N. Weiner Community Center. The idea is to further cement these buyers into the social fabric of Northeast Wilmington.

Q. How does this project represent an innovative solution to a specific development challenge?

A. The developers of Eastlake faced an interesting development challenge: how do you sell homes at below market prices to a group of first time home buyers with incomes ranging from 50 percent of the AMI all the way up to 115 percent of AMI? In addition, how do you overcome the stigma created by the infamous history of the former public housing project?

The developers first by demolished the entire original public housing complex, allowing them to utilize one of the site’s best attributes, public parks abutting the site on nearly every side of the development. The majority of the Eastlake homes are oriented toward the public, green space to take advantage of the views. Density was another issue. The site plan that was created and built reduced the original site density from 267 to 160 homes.

Incorporating energy efficient, modern home designs that borrowed architectural themes found in the surrounding community, the developers created homes that would work in the surrounding suburbs as well as in the urban environment of the City of Wilmington. Buyers did not have to sacrifice amenities found in most suburban homes when they purchased in Eastlake.

The developers’ decision to build the rental community first also helped in the development of the homeownership phase because buyers could actually see and touch the type of homes that were offered for sale. Since all of the 1943 public housing units were torn down, the multi-block site was literally rebuilt from the ground up.

Once the home product was devised, the developers had to figure out how to deliver homes to first time home buyers with targeted incomes ranging from 50% of median income up to 115% of the area median income, a requirement of the HUD HOPE VI program. HUD awarded the overall project (both rental and for-sale) $16.8 million in grant funding. The developers were able to target $5.3 million of the grant for homeownership but needed substantially more money if they hoped to sell homes affordable for buyers earning 50% of the area median income.

Funding for the Program Income Fund came from three sources: $1.1 million that became available when the rental portion of the development went to permanent endorsement, reinvested lot transfer fees and settlement proceeds in excess of the amount needed for construction loan repayments. The Housing Authority owned the site and was a partner in the new development, so they agreed to reinvest the acquisition cost of the ground back into the development at the time of each settlement. This technique resulted in $264,400 in funding for the fund. This fund became so large at one point that the developers were actually able to construct a phase of 30 homes without the construction loan, thus saving additional money (interest) that was reinvested back into the Program Income Fund.