Thursday, July 9, 2009

Chicago's Highland Park Neighborhood Seen as Model for Successful Shared Equity Homeownership Strategies

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.


Jim Gray said...

The Highland Park Community Land Trust has done great work as outlined in the original posting. Our hats are off to them as an excellent model for others to follow. There are several other promising examples of shared equity homeownership being pursued across the country as well. Right in the Chicago area, there is the Chicago Community Land Trust that represents a large scale effort to promote long-term affordable homeownership. Also, Janice Morrissey, the Director of Housing Initiatives for the new South Suburban Housing Collaborative (formed by 18 towns) is working with the Metropolitan Mayors Caucus and the Metropolitan Planning Council to pursue mechanisms for all kinds of housing activities “across municipal boundaries.” The DLA Piper law firm has agreed to provide pro bono assistance to the Collaborative, developing shared equity models that all participating towns could utilize.

As an example from the East, the Diamond State Community Land Trust represents the State of Delaware’s effort to ensure that any property that the state invests more than $60,000 of Neighborhood Stabilization Program (NSP) funding must become part of Delaware’s permanently affordable homeownership stock.

From the West, the City of Oakland working with the Urban Strategies Council, has allocated all of the City’s NSP funding available to serve populations at above 50% of the Area Median Income, to create permanently affordable homeownership, also through the creation of a new community land trust. These are just a few examples of the growing number of communities who understand that over the long-term they will do a better job of stabilizing their communities and create many more wealth building opportunities by pursuing strategies that promote long-term affordable homeownership.

Jim Gray
NCB Capital Impact

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