Tuesday, April 15, 2014
The New York Times' Room For Debate series recently covered the pros and cons of gentrification. Law professors were represented by Wisconsin's Lisa Alexander:
Urban centers with significant subsidized and rent-restricted affordable housing stock should consider using legal tools to preserve their subsidies for the long term. Some cities like Chicago have created municipally-run community land trusts, while other community groups have created nonprofit land trusts, which take ownership of the land under homes, cooperatives, rental units and businesses.
This strategy makes home ownership more affordable by taking the cost of land out of a property's purchase price, while also controlling what happens on the land. A CLT retains ownership of the land, and then leases the use of it to home owners or commercial ventures. The ground lease includes resale price restrictions that preserve affordability for future generations while still allowing investors to earn profits from the appreciation of their homes or businesses). And studies show that homeowners and residents of these community land trusts are less likely to go into foreclosure than market-rate owners.