Nobody home

Who knows, perhaps the third time is a charm.

Since the housing market started trending southward, a move which became evident with startling clarity last midsummer, we have twice suggested in this space that the board of supervisors investigate opportunities that the collapse presents for a workforce housing initiative.

The response has been underwhelming. Our neighbors are putting a bit more spunk on display.

Prince William County officials are developing a plan to bring low-interest loans to employees who want to buy a home in the county.

The proposal won't cost the county any money, and it will help in at least some small way to fill the now-vacant houses that are further depressing the county's market.

The plan is relatively simple. The county will invest up to $20 million in 10-year CDs from a bank. The bank will pay the county a set interest rate — somewhere around four percent. The bank will then use the money to give home loans to county employees at a slightly higher rate — about five percent. That's still lower than the market rate of about six percent, so the county earns interest, the bank turns a profit and county workers get a better deal than the going rate.

There is no risk to taxpayers because the bank, not the county, is signing the loan agreements.

Fairfax is considering an even bolder move, whereby the county would buy foreclosed properties, then sell them at below-market prices to working families.

Meanwhile, Fauquier County has $16 million or so in a rainy-day fund that is just sort of sitting around, waiting for storm clouds to form.

The money is judiciously handled and carefully guarded because it plays a significant role in the county's bond rating. Having a chunk of unencumbered money — ideally, as is the case here, about 10 percent of the annual general fund budget — keeps our bond rating healthy.

But investing some millions in a bank CD a la the Prince William plan is hardly squandering our fallback funds; they would be invested in an interest-bearing account, not spent.

It is true that early withdrawal penalties on CDs can be stiff, should an emergency arise and the county finds itself needing the money. But federal law is pretty lenient, and if the penalties are stiff, that's the banks choice. Chances are, the county could negotiate a fairly forgiving deal, given the size of the investment and the unlikelihood that it would need to be withdrawn early.

In April, according to the Greater Piedmont Area Association of Realtors, 188 homes were under sales contracts in Fauquier County. Of those, more than half, 97, were under $250,000.

Historically, Fauquier's affordable housing efforts have, quite frankly, been modest and their accomplishments nothing to write home about. The constituency has been small, voiceless, invisible.

That's changing.

Every house that reverts to bank ownership immediately lops about $25,000 off the value of its neighbors, according to nationwide industry figures. A single foreclosed house in Warrenton could conceivably knock a chunk of value off 50 nearby dwellings.

Despite Fauquier's relative insularity from real estate market fluctuations, the time seems ripe for following in the path that Prince William and Fairfax are blazing.