Posted at 5:00 PM on August 8, 2008
by Bob Collins
When I stopped in to visit Russ Barclay this afternoon, he was working on the finishing touches of a new home (above) in North Minneapolis. It was built on the foundation of one of 8 homes destroyed by arson not long ago. Hundreds of volunteers have worked on the project, under Urban Homeworks, a faith-based initiative that provides homes for low-income families.
It's an apt metaphor for what's happening in Minneapolis. As the foreclosure crisis has ripped home ownership from hundreds of people, non-profit groups are helping people, who couldn't afford a home before, buy a home for their family. Urban Homeworks has teamed with The City of Lakes Community Land Trust on this project. CLCLT helped Barclay buy a home just down the street. Behind the idea of helping people buy a home, is the goal of helping the people in those homes build -- rebuild -- their community.
The City of Lakes Community Land Trust started five years ago as a response to the "incredible increase in home values," according to Jeff Washburne, its director, who gave me a tour of some of the organization's efforts today. A home on a block in Minneapolis might have been affordable once, but when property values shot up, it was not affordable the next time it came on the market.
But here's the news: At what appears to be the depths of the foreclosure crisis, Washburne tells me he's feeling "bullish" about things. More people in the last six weeks, he says, are approaching his organization to help buy a home. "I think a lot of folks that were boxed out of buying homes the last six years, who had good credit, but don't make a lot of money, they're seeing a great opportunity right now." (Listen)
Take Leticia Brown (shown above with Washburne), who bought her home in North Minneapolis, last year. "If you're not purchasing to make a profit, then the program is good for you. I'm not trying to make a huge return on the house should I ever decide to sell, I just wanted a place of my own." (Listen)
The housing market was a little better when she purchased her home in May 2007, which means Brown wouldn't have been able to buy her home without the Land Trust. I was able to get a really good house in the market that suits my needs," she said.
Under the Community Land Trust plan, a home stays affordable. Take a home selling for $200,000. The Community Land Trust puts up $50,000 of a down payment. The homeowner gets a loan for $150,000. When the home is sold, the $50,000 downpayment is applied to the next buyer -- making the home affordable again -- and the seller gets 25 percent of any increase in value. The rest goes to reducing the cost of ownership for the next buyer.
People like Barbara Lightsy, described by Washburne as "the matriarch of North Minneapolis," sees home ownership for low-income Minneapolitans as essential if her neighborhood is to survive. (Listen)
"It's sad. Many of the people who lost their homes were people my age," she told me during a stop at her home. "They were people who were part of the community. They didn't just live in the community. They were the community. All of those people are displaced."
When she wanted to buy a home a few years ago, she says, her Social Security income wouldn't cover the cost of the mortgage. Under the Community Land Trust program, she received $65,000 -- the maximum amount available . "It made it not just possible,it made it real," she said. That $65,000 will be available for the next owner, too. And the one after that.
As more people move back from the suburbs into the city, Barbara says good property in the area is most vulnerable to being unattainable by low and moderate income residents.
"What we found is as people lose their homes, many times investors buy the homes, who don't live in the city, and they'll rent to anyone who can pay the rent, so you may not be getting a very good neighbor. If the homes are being purchased by families or individuals, I consider that new growth and I hope these homes will be available to people who want to be part of the community."
The average sale price of a home purchased through City of Lakes Community Land Trust is $125,198. The average household income of the buyer is just under $31,000.