The presence of vacant foreclosed homes has been undermining the quality of life and the property values of neighborhoods across the country – leading often to even more foreclosures. While urgent action is needed to reverse this trend, the crisis also offers a rare opportunity to make lasting progress on our affordable housing goals. A series of new Federal, State and local programs have been created to buy vacant properties at reduced prices, renovate them and resell them.
Many cities and several states have decided that when they invest public resources in these foreclosed properties, they should preserve long-term affordability through shared equity homeownership. Rather than reselling foreclosed homes to the highest bidder, these communities will target families who need assistance to access homeownership and agree to make the home their permanent residence. In return for this assistance, these homeowners will be asked to pass the public support on to assist future buyers. Shared equity homeownership may not make sense in every community impacted by foreclosures but it is a sensible approach that will be appropriate in many places.
- Urban Land: CLTs, Foreclosure Prevention and Neighborhood Stabilization
- Preserving the Affordability of NSP Funded Foreclosed Properties
- Survey: Community land trusts lower risk of losing homes to foreclosure
This article from the September issue of ULI’s Urban Land magazine provides an overview of the features of community land trusts and their applications under today’s current housing market conditions, particularly how CLTs can be used in the context of foreclosure prevention and neighborhood stabilization. CLTarticle_UL_Sept09
This report developed by Burlington Associates and the law firm of Goldfarb and Lipman for NCB Capital Impact outlines federal requirements for preserving affordability of NSP assisted homeownership units. The report describes specific legal and financial structures that jurisdictions might use to meet HUD requirements and preserve long term affordability.
Homeowners in community land trusts (CLTs) across the country are much less likely to lose their homes to foreclosure than owners of market-rate homes, according to survey results released by the National CLT Network and the Lincoln Institute of Land Policy. The new data show 2008 closing with a slight 0.52 percent foreclosure rate among […]
- Burlington Resale Study
- Boston Globe: A Foreclosure Free Option
- Washington Post: Shared Equity Homeownership in DC
This 2004 study of the first 100 home resales conducted by the Burlington Community Land Trust (now known as the Champlain Housing Trust) is the only formal study of program outcomes for shared equity homeownership completed to date. The study documents significant asset building outcomes for homeowners as well as success in preservation of affordability for future buyers.
THE MORTGAGE CRISIS and the rise in foreclosures nationwide have left the American dream in tatters and may be sparking a recession. Yet a fast-growing form of housing - the community land trust - has become a virtually foreclosure-free safe harbor. One of the best examples of this fresh approach to putting a roof over people's heads is in Boston.
While there is plenty of blame to go around for this mess, the goal of expanding homeownership is still an important one and should not be sacrificed. It can be done responsibly and should remain a priority. In fact, one of the best examples of how it can be done is right here in the District.