LAUNCHING HOMEOWNERSHIP OPPORTUNITIES:
The Case for Land Trust Utilization in Subsidized Housing Programs
Presented By: Cupid S. Alexander
EMPA Capstone
June 13th, 2015
Overview
Purpose of Study
Research Question
Methods
Findings
Recommendations
Program Reflections
Acknowledgements
From: Roxy Franklin
To: Cupid Alexander
Subject: Transitional Services
I am writing this letter to express my concerns with
the lack of adequate Transitional Services available
to people like me who have been victims of poverty
and/or unforeseen circumstances which forced us to
seek governmental assistance, but who also
desperately want to find ways to work around our
disabling circumstances and become productive
members of society again.
*E-mail shared with permission from Roxy
LEAD FROM WHERE YOU SIT!
Purpose of Study
1. To increase homeownership opportunities to
low income households already participating in
HUD’s various subsidized housing programs in
Washington County
2. To identify the barriers of families transitioning
from subsidized housing to homeownership
3. To offer an alternative solution utilizing current
processes put in place in a more efficient
manner
“The American Dream is one of success,
homeownership, college education for one’s children,
and have a secure job to provide these and other goals.”
-Leonard Boswell
So the question remains…
How do we increase affordable housing
in an effective and efficient manner, for
current residents wishing to transition
from subsidized rental housing to
homeownership?
Literature Review
3.6 X
Home prices are increasing 3.6 times
higher than the national average
Income
Barriers
Locally, more than 50% of residents pay
over 30% of their income on rent
Rent
30%
Other
70%
Current methods of affordable incentives have hit a wall: tax increment
financing, tax exemptions, system development exemptions, with
limited/unclear effectiveness.
Promising potential; shared equity housing model has increased
homeownership amongst low income residents
“Lack of adequate transitional services to people like me”-Roxy
Methods
Diane Linn (Proud Ground)
Interviews
Mark Forker (Habitat for Humanity West Metro)
Justin Buri (Community Alliance of Tenants)
Internal
Data
Collection
Last 5 years of Family Self Sufficiency Program
Review of Homeownership Program Exit Data
Surveys; Clients & Employees
Professional
Publications
Case Studies
Articles
Annual Reports
Findings
Interviews
• Current subsidized housing programs create cyclical needs
• Limited upward mobility for housing residents
• Loss of assistance once transitioned from subsidy to
homeownership
• Shared equity model not embraced as a transitional model
•
Workforce: Front line and implementation staff
• 56% response rate (14 of 25 responded)
• 80% of respondents indicate single biggest issue to
homeownership through subsidy is the fact that clients have
the option of receiving escrow money and remaining on
housing or transitioning to homeownership
•
Only 4% of families enrolled in our homeownership program
continue on to home ownership
• Additionally we pay $36,540 per year in escrow payments for
individuals who then decide to remain in subsidized housing
• Our annual average payment per family on subsidized housing
is $7,890
Internal
Data
Collection
Professional
Publications
Findings
Internal Survey
• 80% of the respondents say that the
shared housing model where the
escrow investment is put into
reducing the cost of the land (via a
land trust) would better serve clients
towards homeownership
Findings
Family self sufficiency exit data indicates the following (317 enrolled in program)
4%
96% of clients don’t transition into
homeownership
96%
35%
65% of which said it was due to insecurity in
receiving continued support
65%
30%
70%
30% of clients reported that they were unsure
of if they could maintain payments on a home
Findings
(Cont.)
10%
10% reported that they would rather
receive the payment of escrow and
remain on subsidized housing if it was an
option
90%
48%
52%
When asked if they would transition to
homeownership if they received additional
case management support 48% replied
they would
Recommendations
• Remove incentives that allow same family double payments
• Clients can only receive escrow when transitioning to
homeownership programs
• Utilize alternative homeownership programs
• Explore ‘Land Trust’ model as primary alternative to
homeownership. Clients receive assistance over the course of
the mortgage. Escrow is used to pay down land costs
• Recapture unused funds and reinvest subsidized housing. This
will house an additional 5 families per year (on average), on
an on going basis
Program Reflections
1. Lead from where you are! (518)
2. Understand your organization/complexity (540)
3. Follow the money trail! Identify financial opportunities (583)
4. Understand Leadership/Followership (517)
5. At the end of change, the beginning occurs (545)
6. A good team is important (590)
7. Strive for cultural competency (510)
8. Welcome alternatives (533)
9. Read the white pages! (539)
10. Don’t just do research. Understand it. (552)
11. Develop your ethical framework. Understand it. (513)
“Every new beginning comes from some other beginning’s end.” - Seneca
Specials thanks to:
• My family and friends for their support in this endeavor
• My Cohort Colleagues, who on more than one occasion talked me away from the cliff
• The outstanding PSU/EMPA faculty for their practical guidance, critiques and support
• Prof. Nishishiba for helping make sense of the chaos