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Affordable housing that lifts people up

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Affordable housing that lifts people up
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Helping people with low incomes is a challenge for any society. Leaving everything to charity results in a huge underclass, given the limits on churches and other organizations' resources.


But making "welfare" a matter of entitlement has destructive effects of its own. It erodes people's initiative; after all, why bother to work when society gives things away for free?

Luckily, few Americans want life to operate at either of those extremes. Instead, we explore the vast middle, looking to help others in ways that least hurt work ethics.

Along those lines, community land trusts work better than most.

Beginning in 1967, community land trusts now have spread to some 250 communities and are "widely understood as the best model for developing permamently affordable homeownership opportunities in regions of escalating land prices," the E.F. Schumacher Society reported.

Of course, as city after city across America has discovered, offering low-income housing is one thing. Keeping that housing and its neighborhoods from deteriorating is something else.

But that's the area where community land trusts stand out. In a nutshell, the program has safeguards that help it accomplish its mission in an effective and noncontroversial manner.

For example, the trust and the income-eligible homebuyer both get ownership stakes. "The trust retains ownership of the lot, while the homebuyer owns the building," Lee reported.

The trust also stays involved over time, offering buyers pre- and post-purchase training in homeownership, financial planning and so on.

When the homeowner sells, he or she gets 40 percent of any appreciated value while the trust gets 60 percent. That means the trust can sell the home again at a less-than-market price, thus preserving the home's affordability -- as Wikipedia notes -- "one owner after another, one generation after another, in perpetuity."

And all without needing additional subsidies for the property, also a strength of the program.

No wonder community land trusts now operate from coast to coast. The trusts run "some of the most stable owner-occupied housing in the U.S." in some of "the poorest urban neighborhoods," according to the City Mayors Foundation, an urban affairs think tank.

Throughout the recession, "mortgages held by community land trust homeowners have a significantly lower risk of delinquency and foreclosure than comparable market-rate mortgages," the foundation reports.

"This ability of community land trust homeowners to defy national economic trends is impressive considering that they have low incomes, often lack health insurance and are generally more susceptible than middle- and upper-class individuals to unemployment and health problems."

All in all, community land trusts seem to be a "cost-effective means of promoting family and neighborhood stability," the foundation suggests. In a world looking for answers, this seems to be one. -- Tom Dennis for the Grand Forks Herald