(Host) Working people across the country have lost their homes to foreclosure because they got into mortgages they couldn’t afford. Advocates say it doesn’t need to be that way.
They say Vermont has pioneered a way for families to finance a home purchase — and to keep the house forever affordable. It’s done through a nonprofit land trust.
As VPR’s Ross Sneyd reports, one of the oldest land trusts in the country is in Burlington, and its work is being recognized by the United Nations.
(Sneyd) Even in the midst of a national financial crisis and housing slowdown, Champlain Housing Trust is still building.
Mike Rosenfield is construction superintendent.
(Rosenfield) “I’d say probably on average once a week we’ll have somebody stop by the site and ask construction workers or ask me, `How much are you renting those units for?’ And, `Give me an application. We’d love to get one of these places. We love the location. And we send them on to … CHT.”
(Sneyd) Champlain Housing has helped to invent a new way of creating affordable housing – and promoting home ownership at the same time.
Brenda Torpy is Champlain Housing’s chief executive.
(Torpy) “By and large, housing and land is getting out of the reach of working people. It gets harder and harder as time goes on to be able to afford to live in communities where there’s a good economy, there’s jobs, where the environment’s good. … People need to be able to buy homes in communities where they can send their kids to school and go to work. And those are the places that have looked to this model as a way to start investing in their local community housing.”
(Sneyd) Two-thirds of Vermonters earn less than what it takes to buy an average-priced house. That’s who Champlain Housing wants to help.
So, Champlain Housing raises money from state and local governments, nonprofit foundations, even private companies to help people buy and renovate property – or to build new homes.
Champlain offers a generous subsidy. On a $200,000 dollar house, the subsidy could be $40,000. That helps people with low incomes or little savings get into their own home.
To keep everything affordable, Champlain Housing holds on to a stake in the property by retaining ownership of the land.
When the new owner eventually sells, the value of that $200,000 house may have risen to, say, $260,000. The seller gets to keep 25 percent of the increased value — $15,000 in this case.
That leaves $45,000 from the profit. Champlain takes that money and recycles it into a larger subsidy for a new buyer.
David McFeeters says that’s how his family was able to afford a house in Shelburne – and avoid mortgage brokers.
(McFeeters) “This is an alternative that does not rip people off, but builds something for the future. And it can be replicated”
(Sneyd) A study last year concluded that people who buy homes through a land trust are 30 times less likely to lose the property to foreclosure.
Champlain Housing maintains a relationship with its buyers – and helps them if they run into financial problems.
Brenda Torpy says it’s gratifying that Champlain is one of just two agencies recognized as examples for the rest of the world by the United Nations.
(Torpy) “Actually achieving some worldwide recognition at a time when it seems like housing finance needs a few new ideas, housing finance needs to recognize that you have to do these things in a sustainable way, and that you could take all this vast wealth that’s in real estate that this country has kind of burned lately, you would be able to take that vast wealth and spread it around and all working people could be housed.”
(Sneyd) The UN’s World Habitat Award carries a $20,000 prize. Not a lot in the housing industry. But Torpy intends to plow it back into projects like the one under construction at the edge of Burlington’s downtown.
For VPR News, I’m Ross Sneyd.
(Host) Torpy and a Champlain Trust board member are in Angola today to accept the award.