Turning housing market lemons into affordability lemonade:
A developer started building the Southeast Seattle subdivision in 2007…The bank foreclosed, and the development froze in time, its half-completed street visible from Rainier Avenue South.
Now the city of Seattle, the U.S. Department of Housing and Urban Development, and local nonprofit Homestead Community Land Trust are converting the rest of the subdivision into affordable housing. The homes will be completed and sold to first-time buyers for as little as $190,000.
The community land trust model is proven, but it’s a little unfamiliar. In a nutshell, a nonprofit trust owns the land; the homeowner owns the building; and an agreement between the trust and the buyer limits home appreciation, so that the home stays “affordable” even after it’s sold. A few years back, the Federal Reserve Bank of Minneapolis took a look at the community land trust model—and while they did have some questions about whether homes would actually stay affordable after they’d changed hands several times, the idea largely seemed to pass the bank’s scrutiny.
No, I don’t think that community land trusts are the whole answer to urban housing affordability. And I don’t know the potential for them to scale up. But if you’re looking for a proven strategy for creating some low-cost housing in high-priced urban areas, look no further.
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Just FYI – Here’s an aerial view of the uncompleted project:
And here’s a nationwide listing of community land trusts, including 19 in Washington, 9 in Oregon, and 2 in Idaho.