T22- Affordable Home Ownership in Canada and Beyond

Transcription

1 T22- Affordable Home Ownership in Canada and Beyond

2 Providing permanently affordable housing in Northwestern Vermont SHARED EQUITY HOME OWNERSHIP

3 Agenda CHT Snapshot Shared Equity How it works Stewardship Question & Answer Session

4 CHT Snapshot $300M in assets ~ $10M annual budget $97M in annual development 2,600+ homes- 570 in Shared Equity portfolio 90 Employees

5 5,000 Residents 6,000 Voting Members

6 Market Vermont s three northwest counties Population 200,000 Urban, suburban, rural

7 Shelters for the Homeless and Housing for Persons with Special Needs

8 Rentals $2,100 apartments $19,000,000 in gross annual rent

9 New Construction

10 Mixing Housing and Commercial

11 Housing Cooperatives

12 Shared Equity Homes

13 Security and Mobility

14 Homeownership 570 homes in SEP portfolio SEP served nearly 1,000 HH 3-County Home Rehab Program Community-wide financial and CHT renter counseling and home education

15 CHT Shared Equity Homeownership

16 Program Design Resale Restricted Formula balance return with future affordability Ground Lease or Covenant Appraisal-Based System Require pre-purchase education Income Restricted (up to 100% AM) CHT coordinates sale, enters chain of title

17 Original Purchase Price New Net Price to Buyer New Appraised Value Recycling of Subsidy Appreciation New Investment (majority of CHT s share of appreciation) Stewardship Fund CHT Fee 25%= seller s Original CHT Investment New Investment (majority of CHT s share of appreciation) Stewardship Fund CHT Fee New Purchase Price Original CHT Investment Seller s Original Net Price Appraised Value at time of Purchase 25%= seller s Seller s Original Net Price Option Price To Seller

18 Production and Sources Inclusionary Zoning Acquisitions Buyer-initiated Resales Donations- Discounted Sale Conversions Foreclosures City and State Trust funds State Tax Credits Competitive capital grants

19 Leverage: Residential Finance Total Value First Mortgages $ 97,641,135 Number First Mortgages 970 Unique Lenders 41 Refinance Loans (more than) $ 8,843,701

20 Benefits to buyers Education and counseling Increased purchasing power Lower up-front and monthly costs Ongoing support and stewardship Stepping stone to market

21 Lower Income Buyers Access Homeownership Over CHT s 30-year history, for all 990 households: 77% earned less than 80% of median income 29% earned less than 60% of median income Average Income 69% of median income

22 Build Wealth for CHT Homeowners Rate of Return When reselling, the average CHT homeowner got back his/her initial investment and walked away with a wealth gain of $6,763 Homeowners got a 2.5 times bigger return than if they had invested in the S&P for the same timeframe. S&P Equity

23 Mobility for CHT Homeowners When homeowners sell where do they go? Other 7% Rent 30% Own 63%

24 Benefits to Community Retaining access to homeownership locally in hot markets Retaining and recycling public subsidiessaving money Leveraging private dollars- economy Improving housing stock Preserving housing stock- vibrant communities

25 Preserving Affordability

26 Hot Market- Supply

27 Before and After Acquisition/Rehab

28 Retaining Community Wealth CHT helped 2 ½ X more households CHT cost the public 5 X less money

29 Enhancing Residential Security Success of first-time homeowners (Reid, 2004) 47% Success of first-time homeowners (Herbert and Belsky, 2008) 50% Success of CHT s first-time homeowners 91%

30 Resale Process: Seller

31 Resale Process: Buyer Shared Equity Informational Meeting No other primary residence Application Closing Costs Pre-approval Homebuyer Education & Counseling

32 Resale Process: Marketing CHT Website & Online Sites Print Advertising Listing Sheets Open House & Showing Marketing

33 Buyer Selection Purchase & Sale Contract Inspection & Issues Letter Legal Document s Meeting Buyer Selection

34 Preserving affordability of the homes over time What is Stewardship? Assisting with ongoing maintenance of the homes Backstopping Stewardship the security of tenure with delinquency and foreclosure prevention

35 Stewardship What happens when a The seller pays 100% of depreciation from the equity they have built in their mortgage property depreciates? CHT lowers the grant to the next buyer Use a Stewardship Fund

36 Stewardship The seller pays for the rehab What happens when a property needs rehab at 3-way split : Buyer, Seller, CHT resale? Buyer pays a higher net price Use a Stewardship Fund

37 Stewardship After 990 transactions over 30 years, we ve only lost 3 homes to foreclosure. The owner sells to a new CHT buyer before the foreclosure is complete How CHT deals with Foreclosures CHT purchases the home before the foreclosure is complete CHT purchases the home after the foreclosure is complete

38 Summary Shared equity homeownership with proper stewardship really expands homeownership access to lower income households It enables them to build wealth and stabilize housing costs It requires public funding and public policies that drive capital and finance to the ptogram BUT it is a great bargain to the public with high returns and demonstrable outcomes

39 National CLT Network Champlain Housing Trust CLT Resource Center Burlington Associates in Community Development LLC

40