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Single mom's at home with land trust Photo by Drew Fleming Katherin Morris sits in front of one of the three Ashland Community Land Trust houses in the Chatauqua Trace subdivision in Ashland. Next month, Morris and her three children, from left, Anthony, 14, Ray, 13 and Shannon, 10, will move into one of the homes, the first sold to low-income families through the subsidized housing program. Ashland program brings affordable housing to needy By WENDY SIPOREN ASHLAND -- Ten years ago Katherin Morris made a fresh start for herself. She left the Marine Corps and divorced her husband, returning to the Rogue Valley where she was raised. But with two kids and another on the way, it was not an easy start. Morris was forced to move in with relatives and rely on public assistance to put food on the table. "It was a very scary time," recalls Morris. Next month, Morris and her three children will be moving into one of the first three houses sold to low-income families through the Ashland Community Land Trust. It's an American dream that seemed elusive just a few months ago. "Before I found the land trust I had consigned myself to being a lifetime renter," said Morris, 34, who works in new accounts at Key Bank. "Ashland is an expensive place to live. We're getting a unique opportunity." To qualify, Morris and the two other families had to make no more than 80 percent of the area median income, not have liquid assets in excess of $5,000 after the purchase and have lived or worked in Ashland for more than six months. The first three qualified applicants were offered the homes. The $90,000, three-bedroom houses in the Chatauqua Trace subdivision are being financed with a leveraged loan through Key Bank and the U.S. Department of Agriculture's rural development program -- $10,000 from Key Bank at 8.5 percent interest and the remainder through rural development at 2-3 points less, making monthly payments reasonable. Buyers are required to put just 1 percent down. Morris estimates her monthly payments will be $670 a month, including mortgage, insurance and taxes. She also will pay a $35 per month administrative fee to the land trust. The land trust began as a joint effort between ACCESS and the city of Ashland to provide a permanent source of affordable housing in the ever-escalating Ashland housing market. The concept of the nonprofit trust is to take the cost of land out of the housing equation, holding the land in trust and leasing it back to the owner at a nominal cost. Because the buyer's only investment is the price of the house, home ownership becomes affordable to individuals with lower incomes. And because the house's resale value is limited to the purchase price plus 1 percent a year and the value of any improvements, the housing remains affordable in perpetuity. Land trust board member and ACCESS employee Carlus Harris says that's the difference between land trust and other affordable housing programs -- it's a permanent subsidy. "The bottom line for affordable housing is subsidy," said Harris. "With a land trust, you get more bang for your buck." Another of Ashland's affordable housing policies allows developers to build more units on a parcel if they sell a percentage of the houses to individuals making no more than 130 percent of the area median income. But there are no long-term limits on the resale value of the house and eventually it loses its affordability. The challenge for land trusts, says Harris, is to secure a continual source of funding to purchase property. The trust's first three parcels were purchased with a $90,000 Housing and Urban Development community development block grant. The trust received an additional subsidy from the developer. This year, the trust is looking to purchase a lot and house owned by the city on North Main Street. Once the turn-of-the-century home is refurbished, it could be sold to another land trust member. There is also the potential to divide the lot and build another house. But money is a stumbling point. The block grant committee awarded the trust just $75,000 of a $135,000 request. The trust will be asking the council for more time to find more money for the purchase, possibly in combination with someone buying the house. The Ashland Housing Commission is currently considering expanding the density bonus policy for affordable housing, giving developers the option of donating lots to the land trust in lieu of selling lower-priced homes. This could give the trust a dependable source of land -- something increasingly hard to find in Ashland, said board member and city planner Bill Molnar. In the meantime, the trust is working on a small scale, taking three houses out of the inflationary market and bringing home ownership to those who might otherwise not be able to afford it. While Morris says she hopes the trust can grow, she's happy it helped her take the last big step toward independence. "I think the best part of it is coming from the point of being nowhere and having nothing," Morris said. "I'm going to have everything." Today's Edition : News | Sports | Business | Weather | Tempo | Classifieds Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA