Lease-to-own program inactive; state law requirements complicate restart

Committee members asked whether the city’s lease-to-own program remains in operation. Carrie Smith, Department of City Development real estate staff, said the program “is not” active in its previous iteration and that recent state statute changes and a new ordinance have made the prior model unsustainable.

Smith explained the statutory constraint: when the city acquires a property that has a tenant, the property must be listed for sale within 36 months and listed at its appraised value. Committee members and staff discussed the practical problems this creates for lease-to-own arrangements because appraised prices are often higher than previous sale prices; staff said they are evaluating whether to lock a sale price at acquisition and allow a lease-to-own occupant to occupy under a contract through the 36-month listing period.

Staff said they are meeting with partner agencies including Axe Housing to identify financing and counseling resources so tenants who wish to buy can reach purchase readiness and not be displaced by buyers with greater resources. The committee did not adopt a new policy; staff said options remain under consideration.