Making Housing Affordable
Imagine if the price of land were to be taken out of the cost of buying or renting a house and imagine that in a few years’ time that when you go to buy a house, it will be within your reach to afford to buy it because the price will be determined based on what you can afford not on the current real estate market? And the same for your children in 20 years’ time.
Imagine having a say in the way land in your community is used and the way housing is developed because a non-profit housing developer with community interests at heart seeks to put the community’s needs at the forefront of housing and neighbourhood design.
Affordable home ownership ensures that families can put down roots without fear of being forced out and that people who are providing essential services can also live in the communities they serve. Strong communities have diverse housing options for a variety of incomes, offering choice and opportunity for all residents.
At the moment, this scenario doesn’t exist in New Zealand but it does in other similarly developed countries. In communities across the U.S., Canada, and the UK, local government, community organisations and community members are coming together to form Community Land Trusts which results in permanently affordable housing* for the people who live in that community. Organisations like Grounded Solutions in the U.S. whose mission is “to cultivate communities — equitable, inclusive and rich in opportunity — by advancing affordable housing solutions that last for generations,” are doing this successfully. And in the UK, “the National CLT Network provides funding, resources, training and advice for CLTs and work with Government, local authorities, lenders and funders to establish the best conditions for CLTs to grow and flourish.” Both offer roadmaps and resources for other communities to follow and use.
Shama is partnering with other non-profit organisations, funders, and community members in Hamilton to look at the feasibility of permanently affordable housing in New Zealand through the formation of a Community Land Trust. If you would like to keep informed about this project or collaborate with Shama on the study, contact Samantha by email or phone.
*”Permanently Affordable Housing” or “Affordable Housing for Generations” means that the homes are built for a particular income level–usually those earning below or at the Area Median Income (AMI), prices are set at around 30% of the income of that population, the homes (or rental) are price-controlled and the future sale price of the homes is not based on the market rate but rather calculated based on the average cost of living increase (3%) or on a set formula. This means that the homes sell for the price of no more than 30% of the income of the target market year after year in perpetuity. Residents must therefore qualify by showing their income level. Although home owners can gain a little wealth when they sell their house, the main economic benefit comes from living there. Housing is seen as shelter rather than a commodity. Subsidies, tax exemption policies, and sometimes the donation of the land on which the houses are built are what makes up for the difference.