Community land trusts develop affordable housing on land held in trust by a non-profit housing organization. Portland has such a program called Proud Ground that has provided affordable housing since 1998. Many of us are familiar with community land trusts that are conservation oriented, but the housing ones are conservational to the extent that often existing homes are rehabilitated and new homes are built with green features.
The trust buys homes, makes repairs and then sells them to low income buyers. Another function is to buy land and build new homes, which are sold to buyers with income between 60 to 80 percent of the area's median income. A qualified buyer can buy one of these homes for as little as $500 down and a fixed mortgage with a median monthly payment that is scaled to income.
The trick is that the trust retains ownership of the land and the buyer pays a lease fee on the land, which protects the trust's investment in the land. Even with the lease payment, the lowered price enables a more affordable mortgage that is less than most rents. Since the home does not come with land ownership, this lowers the price of the home by 30 to 40 percent, thereby significantly increasing affordability. The new owner may eventually sell the home for a profit, and can expect to recover the down payment, equity, cost of capital improvements made, and about 25 percent of the increase in the market value of the property. The trust retains the rest of the money to provide affordable housing for the next buyer. This setup fosters pride of ownership and community and allows the original subsidy to be passed down to the future buyer.
There are housing land trusts throughout the country designed to build equity appreciation for current homeowners while protecting housing affordability for future generations. This may be a way to help solve Bend's affordability crisis.
383 SE Yew, Bend, OR 97702
1 beds, 1 bath, 1012 square feet,
.11 acre lot | Built in 1930
Listed by Central Oregon Real Estate Properties, Inc.
3092 NE Weeping Willow Dr., Bend, OR 97701
4 beds, 2.5 baths, 1989 square feet,
.22 acre lot | Built in 1998
Listed by Bend Premier Real Estate LLC
1229 NW Constellation Dr, Bend, OR 97701
3 beds, 3.5 baths, 3324 square feet,
.20 acre lot | Built in 2005
Listed by RE/MAX Key Properties
Photos and listing info from Central Oregon Multiple Listing Service