COMMUNITY LAND TRUST-AFFORDABLE HOUSING IN PERPETUITY
Grant Year: 2022 | Focus Area: Family| Grant Amount: $103,820 | Grant Status: In Progress
Founded in 1981, Pensacola Habitat for Humanity has the mission of seeking to put God’s love into action by bringing people together to build homes, communities, and hope. Their Home Buyer Program offers affordable, attainable homeownership opportunities for families within 30-80% of Area Median Income (AMI). Qualified applicants work toward homeownership through 200 hours of sweat equity and pre-purchase education. Homes are constructed by staff, subcontractors, volunteers, and buyers. Once requirements are complete, buyers are sold their homes through an affordable, below-market interest rate mortgage. Pensacola Habitat has built over 1,450 homes and is the 25th highest-producing affiliate in the country. Other programs include HUD Counseling, which provides pre-and post- purchase education, credit counseling, and foreclosure prevention. The Comprehensive Community Development (CCD) Program focuses on homeownership preservation, including aging in place, critical home repair, accessibility modifications, and disaster preparedness. Pensacola Habitat also runs a ReStore retail store where donations of gently used home furnishings and surplus building materials are sold at a discount to the public.
OVERVIEW OF THE PROPOSED PROJECT
Increasing expenses, inflation, stagnant salaries, and the pandemic have pushed families into the low-income range and drastically increased demand for affordable housing. Rising real estate values and limited rental options have reduced the supply of affordable housing. As costs increase, building affordable homes for those in the "very low- income" range, or 30-50% AMI, is not sustainable long-term for Pensacola Habitat. The IMPACT 100 grant will fund the purchase of a minimum of 6 individual parcels of land, which will be added to a Community Land Trust (CLT). The CLT is a legal trust entity wholly owned by Pensacola Habitat with terms to include 99-year land leases and the requirement that CLT homes be resold only to those in the 30-80% AMI. Once the CLT is established, Pensacola Habitat will transfer ownership of the parcels to it. Once the land is placed into the CLT, the trust permanently defines them as affordable housing. Pensacola Habitat will prep sites and build homes for qualified buyers as they do currently; however, these homes are designated for those in the "very low-income" range for the 99-year lease term in the trust.
EXPECTED IMPACT ON THE COMMUNITY
The CLT model allows a pathway toward homeownership for families who would otherwise not be able to afford a home. It is an excellent, affordable, and wealth building alternative to renting. Removing land costs from the purchase price effectively brings mortgage payments for very low-income families into an affordable range. The house must be owner-occupied and is renewable for future generations. If a CLT homeowner sells their home, the home must be sold at an affordable price to a household that falls within 30-80% AMI. The equity is split between the homeowner and the CLT, allowing the CLT to purchase additional land. This keeps the cycle of homeownership growing. Multiple studies show that the stability of a home is directly connected to healthier children with bright economic futures. Lack of housing is associated with depression, anxiety, and poor psychological health. The focus on very low-income families will enhance and improve the lives of families in our community and allow them to pass along the stability of housing for future generations.