Affordable housing talk is cheap.
Selling the house but not the land is how Homeward Bound, Clallam County’s only affordable housing land trust, plans to ensure opportunities for low-income homebuyers. Utilizing private donations and state support, the group expects to put two families into homes in 2008.
The Washington Department of Community, Trade and Economic Development recently awarded more than $6 million statewide for homeownership projects — $90,000 of that went to Homeward Bound for its first two houses.
“What we do is obtain land, through donation or through purchase, and through a long-term lease agreement we retain the title on the plot while selling the land’s home to a qualified buyer,” said Homeward Bound board president Peter von Christierson. “It is affordable housing but with a special emphasis on homeownership for families earning below the median income.”
Homeward Bound operates in both Jefferson and Clallam counties. Von Christierson said he hopes to set up two houses in each county from the grant and from donations.
Michele Mallari, who also sits on Homeward Bound’s volunteer board, is a loan officer in Sequim and lends her experience to the project. She said for the trust’s first major project, things are going well.
“The state is giving us $90,000 to start with and we will need to have two homes set up within a year to get a second installment of $90,000,” Mallari said. “We have one under way and are working toward a second.”
Clallam County government kick-started the community land trust’s efforts by donating four homes it purchased off River’s End Road, north of Sequim, in 2007. Homeward Bound sold three of the homes to fund refurbishments on the fourth and its move to a site on Lauridsen Boulevard in Port Angeles that is registered with the land trust.
Mallari estimated the home would cost about $170,000 on the open market but through Homeward Bound, a qualified buyer likely would pay closer to $125,000. The state grant requires Homeward Bound to sell only to people who are at or below 80 percent of the median income in Clallam County, which is an annual income of $34,100 for two people and $42,650 for four. Mallari said most lending institutions recognize the community land trust model.
The Lauridsen Boulevard house isn’t completely finished. When it is Homeward Bound will make an announcement.
“Once this home is sold, the owner will be able to do pretty much what they want, within the (covenants, conditions and restrictions) we set up,” Mallari said, indicating the CC&Rs would be similar to those of other communities. “They are allowed to sell at any time but the home must either be sold back to Homeward Bound or another qualified buyer.”
By keeping the land in a trust, Homeward Bound not only maintains the affordability of the home but ensures it won’t be “flipped” on the market, where homebuyers buy the subsidized home and land and then sell it for fair market value.
Homeward Bound helps the homeowners move into a cycle of homeownership. Mallari said when the homeowners decide to sell, they are credited with an appreciation rate, or increase in home value, of 1.5 percent a year. They gain equity and credit of the increased value toward the purchase of their next home.
“Availability of affordable housing is a growing concern in communities throughout Washington state,” said Juli Wilkerson, Community, Trade and Economic Development director. “Projects such as these, supported through the Housing Trust Fund, open the possibility of homeownership to more working families and disabled citizens.”