The American dream of home ownership has become anything but sweet to many potential buyers and has turned into a nightmare for low-income families and the legions of homeless.
With the volume of affordable housing shrinking and the demand for those dwellings rising, the competition for reasonably priced real estate has intensified and is squeezing those at the lower end of the economic scale into a world where even basic shelter seems impossible to obtain."We've got a situation where we have a national crisis, and it is worsening every day," said Chuck Matthei, director of the Institute for Community Economics, of Greenfield, Mass.
Affordable housing does exist, Matthei agreed, but the trick is making sure the affordable housing of today will remain affordable in the future.
"The question is how do you develop affordable housing, offer a range of housing opportunities and at the same time make sure the public interest is served over the long term?"
The answer might be found in community land trusts, a concept pioneered by the Institute for Community Economics in 1967 as a way to ensure reasonably priced housing remains affordable despite steadily increasing real estate values.
About 65 land community land trusts have been established in 18 states. Most of the trusts operate in the Northeast and South, from big cities such as New York and Boston to rural Appalachia.
In New York, more than 150 units are being built using the land trust concept in the city's lower east side. In Atlanta, 50 housing units have been built or renovated under the concept.
Community land trusts work like this:
The trust, a non-profit corporation, buys a property and separates the title - one for the land, another for the house. The trust leases the land and sells the house, giving the occupant the tax benefits of home ownership.
The trust reserves a right to buy the house when the owner decides to move at a price determined by the owner's original investment plus any additional improvements. The house is then sold, at a price well below market value, to another buyer selected by the trust's elected board.
"If you can't afford to buy a house in the open market, this is a way to get the essential benefits," Matthei said. "It is a better deal than you had otherwise."
The roots of community land trusts can be traced to India's "land gift" movement of the 1950s, a voluntary land reform practice that created trusts to hold land for farmers.
The underlying principle of community land trusts is that any appreciation in housing value created by the owner's improvements stays with the owner.
If property value is increased by other factors, such as a shopping center or school built nearby, the profit stays with the trust.
Under this system, housing is, in a sense, taken off the market of speculative pricing.
"You don't make any windfall profits from increases in property values in the neighborhood," Matthei said. "The social appreciation in property value stays with the trust."
Participation in this type of real estate venture is not for everyone and takes a good deal of conviction on the part of owners, the ranks of which are not limited to low-income residents.