HousingPolicy.org Forum

It’s clear to many how beneficial community land trusts can be in high-cost markets or areas with rapidly escalating home prices. However, many people don’t see the need for CLTs in lower cost markets, particularly those that are blighted and in disrepair. An article in Shelterforce provides an example of how this long-term affordable homeownership tool can be highly effective in stabilizing and revitalizing high-poverty neighborhoods wracked by foreclosures and vacant homes. Although the article highlights the work of Northern Communities Land Trust in the neighborhoods of Duluth, Minnesota, several of these benefits could easily apply in similar neighborhoods across the country. These benefits include:

  • The requirement of owner-occupation, which can help prevent problems of property neglect occurring with absentee landlord in many of these blighted neighborhoods.
  • The close relationship CLTs maintain with their homeowners, in terms of providing financial and homeowner education, maintenance support, and especially stepping in helping to cure defaults if they occur.
  • Keeping the funds supporting these affordable within the community, so that they can serve generations of low- and moderate-income homeowners.
  • Especially when supported with Neighborhood Stabilization Program funds, CLTs can supply the deeper subsidies needed for the major rehabilitation often necessary in blighted neighborhoods with vacant properties.

How has your community used CLTs and other shared equity homeownership programs in lower cost, blighted areas? What other considerations, benefits and challenges are involved in using CLTs and similar programs
in this context?

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Replies to This Discussion

An article in the October 2010 issue of Land Lines (from the Lincoln Institute of Land Policy) shares the results of the CLT Delinquency & Foreclosure Survey, which was administered by the National Community Land Trust Network. The survey includes responses from 42 land trusts in 22 states, encompassing 2,279 resale-restricted, owner-occupied homes, 2,173 of which had outstanding residential mortgages at the end of 2009. Analysis of these loans indicates that CLT mortgages outperform most market-rate loans in terms of delinquencies and foreclosures. In cases where CLT mortgages fell into serious delinquency, cure rates were also much higher. The authors attribute this better performance to the stewardship activities of CLTs, which help to prevent negative outcomes.

Click here to view the article.


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