Affordable homeownership opportunities growing from LISC partner

GoDaddy Summer Workshops Series
June 16, 2018
Invitation for CDCs to Apply for FOC Planning Grants
July 2, 2018
Show all

Affordable homeownership opportunities growing from LISC partner

In a Phoenix metropolitan area known for urban sprawl, two affordable housing infill projects are getting to the heart of matters of homeownership and healthy community development.

Price, location and cool design features will attract buyers to a split-lot, single-family home project near downtown Phoenix and to “micro estates” near downtown Tempe.  The homes have “built-ins” not visible to the eye, special features that put homeownership in reach for qualified low-income residents and protects long-term community investment in affordable housing.

Nonprofit developers Trellis and the Newtown Community Development Corporation, both longtime partners of LISC Phoenix, have applied market ingenuity and a variety of tools in the affordable housing toolbox to do the projects in the historic Garfield neighborhood in Phoenix and the Jen Tilly Terrace neighborhood in Tempe, near the main campus of Arizona State University. Both projects show the importance of putting homeownership within reach of low-income residents and bust the myth that affordable housing means low-quality construction.

June is National Homeownership Month, a time to underscore the powerful personal and community impact of owning a home. Homeownership, and the pride, stability, financial security and community engagement that historically comes with it, is a reliable building block for strengthening households and creating healthy neighborhoods.

A study published in the Winter 2018 issue of the Journal of Economic Perspectives, “Homeownership and the American Dream,” concluded homeownership, despite risks highlighted during the housing market crash of 2008, remains a “valuable institution” in helping families build wealth and secure financial stability.

“The public policy challenge in the United States should be to break down barriers that limit those who would benefit from homeownership from accessing it,” the authors said, “while not pushing people to become homeowners for whom it doesn’t make sense or providing subsidies where not appropriate.”

Trellis and Newtown address that challenge.

Built into the nonprofit developers’ projects are front-end housing education and financial counseling in preparation for mortgage approval, ongoing support for successful homeownership and deed restrictions and renewable land lease agreements that preserve the properties’ affordable housing status.

LISC in Phoenix helped Trellis and Newtown reach this pivotal point – of becoming affordable housing game-changers in hot infill development areas – by helping the nonprofits build capacity to better serve hard-working, low-income families. LISC through the years has provided technical assistance and funded positions, such as real-estate managers, to help Trellis and Newtown grow, innovate and collaborate with others.

Trellis and Newtown forged partnerships with the cities of Phoenix and Tempe to develop the infill sites. In Phoenix, Trellis split a lot intended for a 2,000-square-foot home to build two Community Development Block Grant-subsidized single-family houses each with 1,053 square feet of living space. The developer also worked with the Phoenix Historic Preservation Office to ensure the new homes blended in with the historic character of Garfield.

Qualified buyers with incomes that are 80 percent of area median income or lower can purchase the Garfield homes. It’s likely the buyers will have benefitted from Trellis’ financial counseling and lending programs or from similar services of other organizations that prepare low-income families for homeownership.

The Garfield homes also will have 20-year deed restrictions with a requirement that they remain affordable housing upon re-sell. That’s important in an area like downtown Phoenix that is experiencing a housing boom with market rent and purchase prices that are among the highest in the region.

Newtown also preserves community investment in owner-occupied affordable housing with its Tempe Micro Estates, a neighborhood of 12 600-square-foot, lofted one-bedroom, single-family homes with a small private yard. The project includes a community room with laundry and a kitchen, community garden and a central courtyard for mingling with neighbors.

Tempe Micro Estates, the first neighborhood of its kind in Arizona, is in Newtown CDC’s community land trust. Qualified, low-income buyers will own the homes but not the land, which is under lease. This significantly lowers the price of the home. Ground lease requirements and deed restrictions will maintain the income-eligible, owner-occupied requirements for future buyers.

Newtown also provides counseling and ongoing support to community land trust homebuyers to help ensure successful homeownership. For example, there is a zero-interest loan pool to cover major expenses such as a new air conditioning unit and the CDC offers a tool library for renting equipment used for home upkeep and maintenance.

Intentionality in public policy and social-sector innovations and best practices are adding affordable housing stock in urban core areas where it is in high demand. LISC Phoenix supports the work of Trellis and Newtown to help low- and moderate-income residents enjoy the comforts and rewards of owning a home.