Nonprofit group to build more affordable homes
Tenants to Homeowners will use land trust to keep prices low on single-family units
Lawrence’s Tenants to Homeowners organization plans to soon begin work on its largest affordable housing project yet.
The nonprofit group will begin work this fall on a new single-family neighborhood near Bullene Avenue and La Salle Street in East Lawrence that will include 10 homes that are expected to sell for between $90,000 and $110,000.
“I think this is going to be a picture-perfect example of community-based affordable housing,” said Rebecca Buford, executive director of Tenants to Homeowners. “That’s really the best scenario for us because we can’t rely on federal funding to do all of this.”
Buford is touting the partnership element of the project because the city of Lawrence donated property for two of the 10 lots, and representatives from three area neighborhoods – East Lawrence, Brook Creek and the Woods on 19th Street – banded together to support the project.
The city had purchased some of the property in the area in the mid-1990s after the lots continually flooded and made the homes on the property largely unlivable. But recent stormwater drainage improvements have caused the property to be removed from the floodplain.
Neighbors in the area supported the project, even though a previous neighborhood plan called for the property, which is adjacent to the proposed Burroughs Creek Rail Trail, to serve as a small park area.
“I think we do like the project on a lot of different levels,” said Matt Tomc, president of the Woods on 19th Street homeowners association. “The neighbors always like to see more single-family, owner-occupied homes – especially in Lawrence where you do have a lot of rentals.”
Buford said the project represented a unique opportunity for neighbors to know what type of housing would be on the site for years to come. Tenants to Homeowners is placing conditions on the property that will ensure that it is never used for rental property.
Those conditions are part of a land trust program that Tenants to Homeowners is placing the property under. The land trust program allows people to buy new homes at reduced rates – at $100,000, the proposed homes are more than $50,000 cheaper than almost any other new home built in the city.
The land trust generates the savings by technically selling only the structures on the property, but not the land itself. The land is offered to buyers through a 99-year ground lease for which they pay $25 a month, giving them the ability to use the land like any typical landowner. By eliminating the cost of the ground, buyers can save tens of thousands of dollars.
In return for the price break, buyers – who must meet certain income guidelines – must agree to certain conditions, including that they will limit the resale price of the home, if they ever choose to move. Currently, the trust only will allow a home to be sold for its original purchase price plus 25 percent of how much the home’s fair market value has grown.
For example, if a home purchased five years ago for $100,000 now had a fair market value of $150,000, the home could be sold for only $112,500. It also only could be sold to a buyer who agrees to the same conditions. The goal of the program is to keep the homes permanently affordable, Buford said.
The largest project that Tenants to Homeowners had previously undertaken was a six-house neighborhood near Third and Alabama streets.
In the new development – which has received approval from the Lawrence-Douglas County Planning Commission but still must receive final approval from the City Commission – Buford hopes to have the first homes available for purchase by next summer. She hopes to have entire neighborhood built by summer 2008.