As the housing crash of the last few years unfolded, something odd happened in community land trusts across the country. Or rather, something didn’t happen: There were few short sales. Sheriffs didn’t show up to put people’s belongings out on the curb. No homes sat abandoned. Neighborhoods stayed intact.
Community land trusts experienced foreclosures at a tenth the rate of U.S. housing overall, even though residents are mainly low- and moderate-income.
And here’s another thing that didn’t happen. No one made a killing flipping land trust homes or using them to back exotic mortgage-based securities. No one got a multimillion-dollar bonus for selling credit default swaps created as bets on which securities would fail.
Community banks also fared well. The FDIC reported last year that community bank borrowers had “far fewer” foreclosures than those who borrowed from big banks.
Their secret? Both local banks and community land trusts did what they were designed to do—got people into decent, secure homes at affordable prices.
The Wall Street players, on the other hand, used home finance to make mega-profits for the 1 percent.
And they’re still at it. Today big companies and speculators are buying up foreclosed homes in bulk at fire-sale prices in competition with would-be homeowners, and renting them out to the growing group of people cut out of home ownership. If home prices go up again, it will be these companies—not ordinary families—that will get the windfall.
Instead of evicting residents and creating yet another speculative market for homes, mortgages for those underwater should be modified to reflect current market value. Homes already foreclosed should be sold to community land trusts, other nonprofits, or families looking for affordable homes.
We’ve seen where we get when we use houses as gambling chips in the global finance casino. In this issue of YES!, we look at what it would mean to use this moment of transition to instead create housing systems that work for people, not as a way to create more profits for the 1 percent.
The community land trust model gives us a starting place—housing works better when it’s taken out of the speculative market. But there’s more. Our homes are not only where we find shelter and security for ourselves and our families—they are structures that connect us to place.
Houses draw from the bounty of the Earth for water, energy, and building materials. The way we’ve built and inhabited homes in the United States is a major source of greenhouse gases, creating an ecological bubble far more serious than the financial bubble.
Small, Frugal, and Green
With 5 million houses in foreclosure, we are rediscovering that living sustainably includes living affordably.
We know how to do better. Homes can be built with plentiful, local materials; we can be frugal with energy and water; and we can locate homes where little or no driving is required.
And we can reject the McMansion ideal, which isolates people in a cocoon of too much consumption and too little community.
We need our homes to connect us with neighbors, whether we live in apartments in walkable urban cores, in warehouses converted into cohousing communities, or in houses linked by greenspaces, shared alleys, or gardens.
When we have the security of home and when we create long-term, soul-sustaining links to the natural world and to community, then we can know we are where we belong.
Small, supportive, affordable, recycled—and you can build your own.
The fight against unjust evictions just got fiercer as the national Occupy movement joins forces with community anti-foreclosure groups.
Cooperative financing and community land trusts keep rents affordable and homeownership within reach.