Preventing the Next Foreclosure Crisis?
Tuesday, March 17th, 2009Could innovative public policy and community-oriented homeowner education programs help avert the worst of the foreclosure crisis? The folks at the National Community Land Trust Network and the Lincoln Institute of Land Policy think so — and they’ve got the numbers to back it up.
They have a great new report out today showing that Community Land Trustshave a significantly lower foreclosure rate than the national average.
But first, what exactly is a Communtiy Land Trusts (CLTs)? According to the report:
Owned by nonprofits, CLTs lease the land and typically sell the buildings on the land at below-market rates. This model benefits current and future homeowners. In exchange for purchasing homes at below-market prices, homeowners agree to limit the price of their homes when they sell, keeping them permanently affordable to future buyers while providing a fair return to the seller.
Although homeowners agree to forgo the possibility of big profits if their neighborhood’s property values go up, they receive in return the chance to own homes that they otherwise would not be able to afford.
The National CLT Network and the Lincoln Institute surveyed 1,930 CLT homeowners — about 60 percent of CLT homeowners nationwide — and found only 0.52 percent of low-income CLT homebuyers were in foreclosure last year. Compare that to the 3.3 percent nationwide. CLT homebuyers were six times less likely to be foreclosed on last year.
“It’s clear that community land trusts significantly lower the risks of owning a home,” said Roger Lewis, executive director of the National CLT Network. “While home foreclosures are devastating families and neighborhoods across America, community land trusts are proving to be a highly effective way to create and sustain stable neighborhoods. That’s partly because community land trusts don’t allow the kind of ‘too-good-to-be-true’ financing that has taken down so many American families.”
Take a moment to check out the full report (or at least the press release). For anyone who cares about the future of communtiies devestated by the coreclosure crisis, the report offers the first good news we’ve heard in a long time.


