Could Land Trusts Be a Solution for First-Time Homebuyers?
As traditional avenues to housing become less attainable, organizations across the US are finding creative ways to help people become homeowners
Sept. 27, 2024
2 min read
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Through these programs, residents save money by only paying for the house they live in, rather than the entire property.
Housing has become increasingly unaffordable over the years, prompting organizations across the U.S. to come up with affordable housing solutions. One of these solutions comes in the form of community land trusts, according to Route Fifty. Particularly in states like California and New York where housing is known to be unaffordable, some organizations have been using these land trusts to help first-time buyers. Through this system, nonprofit organizations purchase land but sell or rent the homes on it through long-term leases, making housing more affordable since buyers only pay for the house.
Shared equity programs are especially helpful for first-time buyers. Amid the housing crisis, true starter homes are exceptionally difficult to come by, but community land trusts can provide an option for young households looking to earn equity. That’s what the Champlain Housing Trust in Northwest Vermont is hoping to achieve with its program—to help provide a stepping stone for hundreds of new homeowners.
“We see the vast majority of our folks go on to other forms of home ownership,” said Michael Monte, the trust’s executive director. “[They] use the lower cost of the shared equity model, plus the equity they earn by reducing their principal or by having a lower mortgage cost … and they use all of that as leverage for a private-market home.”
