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Trust could cut housing costs By WENDY SIPOREN ASHLAND -- Could you afford to buy your home today? Are your children going to be able to buy a house in their hometown? A local social service agency and the city of Ashland are teaming up to help residents answer "yes" to these two questions. ACCESS Inc., a Medford-based community action agency, and the Ashland Housing Commission are nearing an agreement to form a nonprofit community land trust. "We looked at a lot of ways to promote affordable housing. This seemed the best long-term creative possibility," said Gerry Sea, chairman of the housing commission. A land trust or land bank can have dozens of variations, but basically it takes the price of land out of the cost of buying a home. Land is bought and held in perpetuity by a nonprofit organization that leases it back to the homeowner. The buyer's investment is limited to the cost of the dwelling. If the homeowner decides to sell the house, the land trust may limit the amount of appreciation the owner may recoup. Owners are often guaranteed to get back the costs of any improvements they have made to the property. With the average sale price of a lot and home reaching $188,700 last year, many Ashland residents are looking north for affordable housing. By taking land costs of $15,000 to $50,000 off the sale price of a lower-cost home, the sale price can be reduced by as much as 40 percent, explains Councilman Steve Hauck, who also serves on the housing commission. "Land prices in Ashland are a major reason that (housing) costs are so high," said Hauck. "If we can take that out of the equation, it can really broaden the numbers of people that can afford to live here." ACCESS has received a technical assistance grant from the Institute for Community Economics, a national nonprofit that provides technical assistance and a revolving loan fund for land trust projects. Institute trainer Jeff Yegian held a marathon working session with the two groups Wednesday to answer questions and help finalize the details of the collaborative project. Yegian says the 25-year-old land trust movement has grown to more than 100 organizations operating almost 5,000 housing units. Four of those operate in Oregon. Land trusts can make a big impact in deteriorated urban neighborhoods, said Yegian. "Here, it's more likely to have an invisible effect of providing an opportunity for families to stay in the community," he said. The concept has won initial approval for $90,000 in federal Community Development Block Grant funds from a budget subcommittee. The grant still needs to be approved by the full budget committee and the City Council. The groups are also motivated by a pledge by the Fannie Mae agency to purchase $10 million in loans for affordable housing programs such as land trusts in Oregon. The pledge indirectly assists people in buying a home by making it more likely for local banks to finance low-cost houses because the bank knows it can sell the loan to Fannie Mae. If approved, the $90,000 will go toward the purchase of two lots at the Chautauqua Trace subdivision at the corner of East Main Street and Tolman Creek Road in Ashland. Three years ago, ACCESS won city approval to develop an affordable rental complex there, similar to its Barnett Townhomes project in Medford, but canceled when it didn't receive funding. The city of Ashland already promotes affordable housing through annexation requirements and subdivision regulations. The city also built and sold two low-cost homes across from Garfield Park in 1991. But these are just one-time provisions, says Yegian. "The housing may start out affordable, but after a sale or two, it becomes a market-priced house," he said. "That's the problem. The market isn't affordable. "A land trust makes a house permanently affordable." Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA