On Friday, November 21, 2003, at 09:15 PM, gemgram wrote:
The answer is to create a guaranteed loan program. Instead of subsidies
simply guarantee the mortgage to 30 or 40%. Most people that luck has dealt
an unlucky hand would then qualify. Small downpayment equivalent to two
months rent and you are in. No mortgage insurance and VERY low interest.
(And very low from present rates is low indeed). At 2% or 3% interest some
people would qualify that would not at 6% or 7% on a lower mortgage amount.
Let most people who qualify for subsidized rent then qualify for a
guaranteed mortgage and BANG you have an economic boom. It is what happened
after the GI's came home after the big war and got a lower interest and no
downpayment because the government guaranteed 20% of the loan. The
difference is that a subsidy spends the money forever; a guaranteed loan
costs very little and allows the money to be used many times and always be
returned to the taxpayer's pot.
Amen! The VA and FHA mortgages were created as jobs programs as well as housing programs- there was a very real and well founded fear that with the end of World War II the country would slip right back into an economic depression. We are again on the edge of a depression, and affordable housing rather than the expensive luxury condos and townhomes our city is pushing would create a lot more local jobs. Imagine the possibilities- instead of a few new luxury lofts along the river while the rest of the city rots we could have a city wide housing and economic boom!
More people out of poverty, paying taxes, and spending disposable income
equals economic good times. It means more housing construction and jobs for
the builders in our community. NO, I do not mean the contractors and
developers I mean the sheetrockers, roofers, and other hammer swingers who
live in our community and need "affordable" workforce housing.
And these are jobs that can't be exported to some sweatshop in China.
It does not make sense to pay tax dollars to "maintain" or keep people in
poverty when an even smaller amount of money could make those people
self-sufficient. A smaller investment in empowering people could take them
from poverty to middle class and make them tax payers rather than tax
burdens. What a concept!
Home ownership creates a multigenerational asset that can permanently lift whole families out of poverty.
What is needed is not a land trust that siphons away the product of their
hard work and "Luck". What is needed is a program to help them clean up
credit and succeed at home ownership. We need a program for "Supportive
Homeownership" not "Supportive Poverty"!
The great flaw in the land trust is that it creates permanent dependency- the residents will never really be homeowners and will forever be at the mercy of the landowners.
Don't get me wrong those who need the poverty plantation may need
landtrusts, so I am in favor of it if they want it, but don't try to sell it
as a viable alternative to actual ownership of the home. For me, I am
probably scarred by past childhood experience of poverty and living on
someone else's land. Landtrusts smack too much of the sharecropper farms of
my childhood. Sure it is your crop, but it's the MAN's land. So most of
your profit is going to the MAN. Same with the share-houser landtrust.
Work as hard as you want on your house and improving your neighborhood, but
the Land Trust MAN is going to get most of the profits.
Agreed, and given some appreciation the land trust could end up being quite the robber barons- consider what would happen if they reinvested the appreciation in more land... They could end up owning most of the "hoods.
If the City wants to do a subsidy then subsidize the land and give it to the
affordable homeowner client after the house is built. How is that different
for affordability than those $155,000 houses of Hope's landtrust? We KNOW a
housing unit can be built for that amount or less. This is not speculation,
but hard facts. Only one example is Carolyn Olson's GMMHC program, which
builds very nice houses for less.
With a 1000 square foot factory built home and foundation going for $60,000, the city donating the lot and utility hookups, and the gas and electric companies jawboned if not required to donate their hookups a new home could sell for well under $100,000.
The true "hope" for the affordable property owner is to rise out of poverty
and make a better life for their family, lets give that opportunity when
ever possible. Otherwise we maintain a system of indentured homeownership.
How many years do they need to work until they end the bondage? I have not
heard when the landtrust runs out and the land is finally owned by the
homeowner.
Jim, you again get right to the core of the problem- the are way to0 many intangibles in the "Land Trust" scheme, and I don't think we want to see some grandmother lose her home a few decades in the future because the "Land Trust" never dealt with or even imagined said intangibles.
hangin' on in Hawthorne,
Dyna Sluyter
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