Innovative housing strategies that provide sustainable steps towards homeownership, such as shared equity homeownership, were among the topics covered at the Solutions for Working Families: 2009 Learning Conference on State and Local Housing Policy.
In particular, a recent article in the Chicago Tribune details a session at the conference focused on successful shared equity homeownership strategies in the Highland Park neighborhood of Chicago, specifically through the use of a community land trust. The session featured Rob Anthony, Highland Park Community Land Trust; Jim Gray, NCB Capital Impact; Rick Jacobus, Burlington Associates for Community Development; Councilwoman Terri Olian, City of Highland Park, Illinois; and Alderman Walter Burnett, Jr., City of Chicago, Illinois, 27th Ward.
The Highland Park Community Land Trust was created six years ago, and has completed 30 housing units thus far – enabling teachers, health care workers and city employees, among others, to live in the city in which they work.
Under this land trust model, homes are sold for 20 to 65 percent below market price, depending on how a buyer’s household income compares with the area median income. The trust retains ownership of the land and leases it to the homeowner for $25 per month. When the homeowner moves, they can either sell the home back to the land trust, or alternatively, sell it to another income-eligible buyer under a formula that keeps the home affordable. The seller shares some portion in any appreciation of the property with the land trust; however, if the property has depreciated along with the market, the seller isn’t affected as much because the home was sold to them for a below-market price.
Strategies such as these, which are gaining momentum in light of the current foreclosure crisis, are seen as a way to bridge the gap between renting and traditional homeownership, allowing individuals who may typically be priced out of an area to still build wealth through property appreciation.
“We need an approach that can allow people to move up more gradually, as their circumstances permit,” said Jim Gray of NCB Capital Impact, a national nonprofit that provides financial services and technical assistance in the area of affordable housing.