While the increasing costs of a college degree have not seen an increasing return, the penalties for not going to college are steeper than ever.

Photo by Flickr.com.

Do you know a college student? Chances are, that person is going to graduate with an alarming amount of debt: Students in the class of 2008 graduated owing an average of $23,200 in student loans. It’s now a given that you “need” a college degree to achieve middle-class status in the United States. But we also know that the middle class isn’t what it used to be. So, is a college education worth the money?

The question plagues many Common Security Club members, whether we are students, graduates, parents, or grandparents. How can we save (or borrow) enough to pay for top level schooling, when private college tuition—plus room and board—now runs about $45,000 year? Parents wonder whether they should compromise their retirement savings; grandparents are shocked at the cost; teens have little to compare it to, and may be quite unprepared to make use of such an expensive investment.

In her new book, DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education, Anya Kamenetz ambitiously dismantles much of our cultural mythology around higher education:

Looking at the history of American colleges and universities convinces me that many aspects of the current so-called crisis in higher education are actually just characteristics of the institution. It has always been socially exclusionary. It has always been of highly variable quality educationally. It has always had a tendency to expand. It may be because we keep asking more of education at all levels that its failures appear so tremendous.

Kamenetz analysis is both rational and radical. She questions whether college is “nothing more than an elaborate and expensive mechanism for employers to identify the people who … had all the social advantages in the first place, and those people then get the higher paying jobs.”

Her point is ultimately practical, which is what makes this book such a good resource for folks questioning and contemplating higher education. While stating flatly that, since the 1970s, there has been no increase in return to match the increasing cost of a college education, Kamenetz also makes it clear that the penalty of not going to college has increased in that time. This penalty is a steep decline in income for those with no college degree. The decision, then, of getting a degree, or not, can’t be taken lightly.

Kamenetz also covers the student loan industry that saddles young people with debt, critiques both the popular and real histories of higher education in this country, and examines the difficulties faced by community colleges.

A $67 Billion Victory for Students


New legislation lets students skip corporate student loan middlemen.

But perhaps the most useful section of the book is the last one, in which Kamenetz examines a large variety of alternatives to traditional 4-year colleges. Some of them come out of digital age technology that makes information highly accessible, while others are more hands-on. There are opportunities for self-education through Internet-accessible course syllabi (MIT, for example, makes all of its syllabi available online). There are also free colleges, where students work to run the campus in exchange for their education. She describes “edupunk” as “an evolution from expensive institutions to expansive networks” of teachers and learners—largely connected through the Internet. For those who learn best with their hands, or at least in person, there are more directly experiential colleges built on a foundation of internships and apprenticeships.

Kamenetz concludes with a 30-page resource guide of all sorts of educational possibilities—from the highly virtual to the totally experiential. It made thrilling reading for me, as the parent of a couple of “non-traditional” learners (and no budget for Harvard, anyhow). I would recommend it highly to stoke discussion of the future of higher education … and particularly to all the high-school seniors out there.

Andrée Collier Zaleska works as an organizer for the Institute for Policy Studies, where she co-directs the Common Security Club network. She is also a climate activist and the co-founder of the JP Green House, a zero-carbon demonstration home and garden in Boston.

Interested?

• More from Common Security Club blog.
• Can Money Buy Education?
  Radical homemaker Shannon Hayes taught her daughter that their family doesn't buy things they can make or grow at home. She then had to wonder: Does that include higher education?
• The New Economy Challenge: Implications for Higher Ed
  If we are to build a sustainable economy and an Earth community, our educational goals and structures will have to change. David Korten asks what it will take to retool and reskill our society.
• Take Back Your Education
  More and more people are waking up to the mismatch between what is taught in schools and what we need to know. John Taylor Gatto on what you can do about it.
  

Total dependence on one currency is like total dependence on one crop, or, for that matter, a single energy source: there’s always the risk that crop failure or a cutoff in supply will topple the whole system. This is the scenario we’re seeing now—credit has dried up and unemployment is soaring. In small pockets throughout the world, in rural areas and inner cities, and spots as far-flung as Bavaria and Thailand to Massachusetts and Michigan, people are responding by launching their own currencies. Such monetary renegades are not simply thumbing their noses at the dollar (or the mark, or the euro, or the baht…) They are making a carefully considered choice to promote the well-being of their communities.

“From the beginning we had two objectives—to promote the region and promote local charities,” says Christian Gelleri. In 2003, Gelleri and a group of his students at a Waldorf School developed the Chiemgauer currency in the Lake Chiemsee region of Bavaria, Germany. Since then, some 3 million Chiemgauer notes (equivalent in value to the euro) have been placed in circulation. The currency, accepted by 600 businesses in the region, typically is spent and spent again 18 times a year—three times more than the Euro. This means that the currency is encouraging trade and cooperation in the region, which keeps the shops and restaurants and artisans active. Think of this faster rate of use (what economists term “velocity”) as a kind of reinvestment in the community.

Local currencies can help a community counter some of the problems with conventional money. For example, bank-issued currency tends to flow toward the money centers for investment. If you shop at a chain store, the profit gets whisked out of town and into the corporate coffers and then, often, to the speculative market. A local currency stays in the community, encouraging local business and trade, adding value to local products and services, and supporting the local infrastructure.

Reliance on national currency means being at the mercy of the national credit situation. As we’ve recently seen, credit constriction can paralyze local economies. Despite the availability of goods and the need for business, when there’s no money, consumers don’t buy. Stores don’t sell. Start-ups can’t get a toe-hold. An alternative currency gives people another way to buy, sell, lend, and borrow. If the community creates its own currency, local business can go on even if the supply of national currency dries up.

At the most basic level, currency functions as a means of exchange (I give you a dollar and you give me an ice cream cone), a unit of value (a dollar, pound, etc.) and a store of value (you can hold onto a dollar as it maintains its worth). It’s also a source of information about relative value, and about what is needed to keep trade flowing, for instance, by adjusting the supply of money or the exchange rate so that those in other markets can afford your goods.

With local currency, a community can meet currency needs that the national tender isn’t fulfilling. If the idea seems fanciful, there are models up and running—some for many years.

A now-common sign around Great Barrington, this one at Rubi’s Cafe. Photo by Jason Houston, jasonhouston.com

BerkShares
Author and urban activist Jane Jacobs’ work was one inspiration for the monetary experiment called BerkShares—considered the best-designed and most successful local currency in the United States, with more than $2.4 million-worth passing from bank to hand to till and around again since fall 2006. The attractive paper bills—one BerkShare is worth $1, but is sold into circulation for 95 cents—are accepted at more than 400 businesses in the Berkshire region of western Massachusetts.

Jacobs pointed out that national currencies cover such broad geographical areas that they provide no local feedback. The way our system is now, regions subsidize each other, and weaknesses are not corrected. Local currencies, however, have clear feedback loops so that trade and production imbalances can be addressed more quickly.

As Susan Witt, executive director of the E.F. Schumacher Society, explains, “Whenever a BerkShare must be returned to the bank [instead of recirculated], that means there is not a source or product available locally to fill that business’s needs.” For example, say a toy store finds itself stuck with the currency. This presents an opportunity for a local craftsperson to provide the store with wooden figures, games, or puzzles to be purchased with BerkShares.

Witt, co-founder of the BerkShares program, took to heart Jacobs’ belief that regional economies need their own currencies to grow and thrive. “Businesses are now trading with other local businesses, so that they’re sourcing their printing, accounting, and food products locally rather than out of the area,” says Witt. “People are getting off Amazon.com and back to the local bookstore and camera store. They like the personal exchanges and the ambiance, so they stay.”

The currency belongs to the community, Witt stresses. And its use has been a valuable exercise in community empowerment. “The use of BerkShares is educating people on the importance of supporting local businesses. With that comes a sense of empowerment—that people can make positive changes in the local economy. The fact of BerkShares raises questions like: Can we issue currency that is not backed by the U.S. dollar? It’s prompting people to think about other ways of thinking about money.”

	Hardcastle buys food with BerkShares from Rubi’s Cafe worker Kate Van Olst. Photo by Jason Houston, jasonhouston.com

On a recent visit to Great Barrington, Massachusetts, I purchased Berkshares at Lee Bank and spoke to Branch Manager Paula Miller, who expressed enthusiasm about the currency. “Customers love it. We’ve gotten to know other businesses better,” she said, adding that it’s always fun when clients recognize the work of local artists who designed the bills. “It makes it a little more real.”

Time Banking
Time Dollars, now used in settings as varied as small towns, retirement homes, schools, and prisons, respond to conventional currency’s limited capacity to measure worth. “Dollars don’t measure value very well,” says David Boyle, a Fellow at the New Economics Foundation in the United Kingdom. They are good, he says, at measuring “the instantaneous value of Microsoft or currencies on the international exchange. But not the value of, say, a local shop, or of me if I’m very old or young. I might have skills, but not those that are conventionally marketable.”

Time Dollars were developed in 1980 by law professor Edgar Cahn, who lamented that crucial work to improve people’s lives—such as child and elder care—is much needed but little valued. He saw that many who could do these tasks were idle and felt useless. To get people economically engaged, Cahn proposed a system where people earn credit according to the number of hours they work. These Time Dollars can then be “cashed in” for services, like yard work, tutoring, etc.

Not only does Time Banking promote social justice by connecting people, promoting reciprocity, and improving neighborhoods—it has also proved quite versatile: People have exchanged Time Dollars for wool spinning, “rune making,” and having a baby delivered by a midwife. And there’s always an ample supply since no community is going to run out of hours.

TimeBanks USA offers a start-up kit that includes instructions and software for starting a Time Bank anywhere. Rose-Marie Pelletier is working on launching a Time Bank in her town of Pownal, Vermont, an economically diverse rural community of 3,500. At a town meeting, Pelletier looked at the listings of delinquent taxes over recent years and saw that they had increased geometrically. She’s a math teacher, and the numbers spoke to her; she saw the extent to which people were hurting. “People want to help each other—when we know how to do it,” she says. “I see Time Banking as a way of building community, one hour at a time.”

Chiemgauer Regional Currency
Conventional currency excels at serving as a store of value—so much so that use of money for actual trade slows down, leaving some local economies stuck. Coin and paper currencies do not lose value like the products one buys with them can, which makes hoarding and speculation attractive, particularly with the enticement of interest. Argentine economist Silvio Gesell described this phenomenon in 1913 and said that money also should lose value: that it should “rust” or go moldy like other commodities, and suggested a penalty, or demurrage fee, for holding onto it. Nearly 75 years later, then-teenager Christian Gelleri read Gesell’s work and was fascinated. As a high school teacher, he saw the chance to test the model with a local currency. This is how it works: Each quarter, every Chiemgauer bill loses 2 percent of its value. In order to spend the money later, the consumer needs to put a special sticker on the paper currency.

In the beginning, Gelleri got complaints. Then people figured out how to make the model work for them. For instance, one cinema owner said that business went way up at the end of the quarter when people wanted to shed their currency. Increased cash flow at quarter’s end was helpful for accounting, he said. The 2 percent loss, he added, was insignificant compared to the advertising he’d have to buy to secure the same level of customer loyalty he has from accepting the Chiemgauer.

A consumer can exchange euros for Chiemgauers at 50 offices in the region.Three percent of the purchase price goes to a nonprofit the buyer chooses. So far, more than $100,000 euros have gone to charities such as school athletic programs and environmental groups. The “good cause” component reinforces people’s investment in the currency, and in their community.

Maybe we’re asking national currencies to do too many things. As Thomas H. Greco, Jr. points out in his new book, The End of Money and the Future of Civilization, some functions are inherently contradictory: If money is for trading, you want to use it; if money is to store value, you want to save it. Greco and others such as David Boyle say that people could be better served by separating out the functions of money—and using different currencies, depending on whether you are, say, meeting friends at a local café or saving for college.

Back on Main Street in Great Barrington, Matthew Rubiner, of Rubiner’s Cheesemonger & Grocers, says the issue of local currency has shifted quickly from the theoretical to the here and now. “When BerkShares started we talked about what would happen if the economy falls apart and we were really forced to look local.” The economic downturn, he says, has “brought the question into bolder relief.”

Judith D. Schwartz wrote this article as part of The New Economy, the Summer 2009 issue of YES! Magazine. Judith is an author/journalist in Bennington, Vermont now writing about alternative/complementary currencies and localization movements. www.judithdschwartz.com Interested? Read “The Local Multiplier Effect”

Three years ago, I decided to downsize. I sold my big house (which I loved!), got rid of all my stuff, and built an itty-bitty eco-friendly cottage. When I finished building, I slid my little house into a friend’s backyard. This isn’t as odd as it sounds. My house actually “fits” in the backyard. It looks like a tiny cabin, or a tree house. It’s also super-small and built on wheels.

My house offers 84 square-feet of living space and cost about $10,000 to build. It was built for the highway, but—honestly—it isn’t anything like a travel trailer. It doesn’t contain any space-age plastics or fake wood. Instead, it’s the real deal: knotty pine, cedar, and fir.

I made the house to be as simple and natural as possible. I minimized my construction footprint by using a bunch of “green” building techniques, including:

• Recycled and Salvaged Wood—The house took shape based on the materials that were offered to me or “found.” For example, I decided to install skylights after I found two huge windows at the salvage yard. I installed knotty pine siding on the interior walls and ceiling, and used cedar planks for the loft floor after the wood became available at the local reuse store. I installed exterior cedar siding after my neighbor offered me a bundle. He had originally purchased the wood in the 1940s, and had been storing it in his garage since that time. It was beautiful old-growth cedar—the kind you can’t find anymore.
  
  
• Insulated Windows—The house has nice, wood-clad windows that are low-emission (which reflects sunlight to keep the house cooler in the summer) and argon-insulated. They cost a mint, but have proven to work great! They cut noise and heat loss, and look fabulous.
  
  
• Solar Electricity—A 240-watt photovoltaic (solar) system powers my lights and other electric gadgets. It was sized to meet my needs, based on Olympia’s cloudy weather.
  
  
• Non-toxic Stains and Sealants—I used a water-based stain on the outside of the house, and a water-based sealant on the kitchen counter. I didn’t coat the floors, walls, or ceiling. As a result, the house carries a subtle, natural cedar and pine smell. I love the woodsy, peaceful smell of my house.
  
  
• Primitive Water/Sewer—I don’t have running water in my house. I pull water from a nearby garden spigot, and jug it into the house. I use a composting toilet, and I shower elsewhere. This “primitive” set-up has presented some of the greatest challenges for me. But I’ve gotten used to things, and I recognize that (on a world scale) any sort of toilet or shower is a blessing. Millions of people live without running water or a sanitary sewer. My situation is gifted by comparison.
  
  
• Other Good Ideas—I used shredded cotton insulation in the walls and ceiling, and Marmoleum (a natural linseed product) on the floor. I placed the house in the backyard with consideration for wind, sun and shade. Most importantly, I simply minimized the size of the house while creating a sense of space, utility and natural beauty (smaller really is better for the environment).
  

I’ve been in the backyard for over two years. I didn’t intend to find myself stumbling down a “greener” path, but the house has worked on me. I buy less stuff (there’s no place to store it). I re-think leaving lights on, and mull over better ways to manage my compost. I take fewer and shorter showers because I’m imposing on someone else. My ecological footprint has definitely gotten smaller by living in my little house.

I’ve saved a lot of money (my utility bills don’t really exist, and I don’t have a mortgage). I also spend less time fixing things and cleaning. Now, I have more of the “stuff” that I always wanted: time and resources.

I’ve tried to explain my house to other people. It’s a bit awkward. For example, a few weeks ago, a group of 5th-graders visited my house. I was trying to explain how my house works, and what makes it “green.” And ultimately, we spent less time talking about the house (itself), and more time talking about how the house has connected me to the community.

I’m less autonomous. I rely on the sun to power my lights. I trust the rain on the roof to keep me company. I love that the wind cools my house in summer (it works!). I depend on the library and food co-op, and the generosity of friends and neighbors. I have to ask for water every day, and that has changed me!

I find myself wanting (more than ever) to give something back. And that is at the root of all sorts of new ways to live more simply and in-step with my world. Downsizing just keeps getting better!

Dee Williams' tiny house was featured in Sustainable Happiness, the Winter 2009 issue of YES! Magazine. Dee is an inspector with the Washington State Department of Ecology. Reprinted with kind permission from South Sound Green Pages. Interested? Dream House: Tour Dee Williams’ house See the houseplan at www.tumbleweedhouses.com

Relationships count—cultivate them.

Be inclusive of a wide range of food system interests.

When it comes to disagreement, find common ground where you can; for all else, foster a climate of robust debate and respect for everyone’s opinion.

Educate your members, the public and policymakers about terminology like “just,” “sustainable,” and “food policy.”

Look for unusual connections such as economic development and the local food economy.

Find a champion, especially a policymaker, who will work for your cause.

Learn more about your food system by conducting food assessments, research, and ongoing information gathering.

The Community Food Security Coalition provides technical assistance and information about food policy councils. See their website at www.foodsecurity.org.

:: YES! STORY:
Fresh from the City
Citizens and local policymakers join up to get fresh foods to schools and neighborhoods.

Mark Winne contributed these tips to Food for Everyone, the Spring 2009 issue of YES! Magazine. Mark is cofounder of the City of Hartford Food Policy Commission, the Connecticut Food Policy Council, End Hunger Connecticut!, and the national Community Food Security Coalition, and author of Closing the Food Gap: Resetting the Table in the Land of Plenty (Beacon, 2008). Interested? Check out the YES! Tool Kit for Activists.

YES! MAGAZINE GRAPHIC, 2008. Illustration by Kayann Legg / I-S Sources: Rocky Mountain Institute,
Bureau of Transportation Statistics, Environmental Protection Agency, Department of Energy, University of Chicago.

Introduction
The Joneses are your average U.S. energy consumers. They haven’t yet upgraded to energy-efficient appliances, their house needs better insulation, and they keep the place as cool in the summer and warm in the winter as most Americans do. The two adults commute 30 miles each per day, in separate cars with average fuel efficiency, and every year they each drive an additional 4,500 miles running errands and taking their child to soccer games and violin practice. The family takes one vacation trip per year, flying to visit grandparents 1,350 miles away. How much CO2 do their house and cars produce? We figure it at 60,000 pounds, or 10 tons for each family member.

Lately, though, the Joneses have been reading about climate change, and they’re getting worried. Ecological crisis has never felt so urgent before. Even little Joey Jones is talking greenhouse gases—he learned at school that scientists are predicting a worldwide climate catastrophe that will change the rest of his life, unless we stop the worst effects by making big changes in the next ten years. The Joneses decide: change is necessary, and they’re ready to do their part. But how much can they really do? A lot, it turns out.

In 10 years, without sacrificing their way of life, the Jones family eliminates the CO2 emissions that their home and transportation used to create—the bulk of their carbon footprint.

Count Your Carbon Want to keep up with the Joneses? Here are the numbers we used. Use them to find—then shrink—your own carbon footprint. Gallon of gas Gallon of fuel oil or diesel Kilowatt hour of electricity (national average) Therm of natural gas Gallon of propane Per passenger: Airplane mile Train mile Long-distance bus mile Local mass transit mile Electric bike mile 19.36 22.38 1.43 11.71 12.67 1.28 0.42 0.18 0.50 0.02

The Rest of the Story The Joneses only changed their housing and transport habits. How can you go further?   Eat meatless. For every day of the week you skip meat, you’ll save 215 lbs. per year. Buy local. Most food eaten in the U.S. has traveled 1,500 miles to your plate. Be a low-impact consumer. Choose local products, reduce the stuff you buy, and save embedded energy by buying used. Reduce waste. Stop junk mail, reduce packaging, and reduce the 2,020 lbs. each American’s waste produces annually. Avoid the McMansion. A smaller house saves a lot of carbon: on average, 11.4 lbs. of CO2 per square foot per year.

The family starts off with easy changes: They wash clothes in cold water and air dry them in the summer, replace incandescent bulbs with compact fluorescents (CFLs), turn off their computer when not in use. That’s an instant, virtually free savings of 6,200 pounds of CO2. They make one simple transportation change: One of the adults commutes by bus three days a week—enough to see whether it can be done, but keeping the second car just in case. That’s worth another 2,200 pounds. They’re down to 51,600 pounds and it hasn’t cost them anything but the price of the CFLs and a clothesline. They’re actually saving money.

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They stop donating so much heat to the outdoors: attic and basement insulation, sealing and insulating heat ducts, and patching the large air leaks typical of standard construction saves them a whopping 7,100 pounds. These savings aren’t free up front, but the savings in heating and cooling bills will repay the cost over time. Besides, Mrs. Jones is handy with home repair, and does a lot of this work herself. Down to 44,500 per year.

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The bus commute’s gone well, so Mr. Jones now buses to work all the time. They’ve worked on consolidating trips outside work, and find they can do without the second car altogether. That’s 5,900 pounds gone. They finish weatherproofing their house: beefing up wall insulation, weatherizing doors and windows, and upgrading to high performance windows. Another 1,800 pounds disappear. They’re at 36,800.

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Instead of flying for their annual vacation, the Joneses take the train: a leisurely way to save 7,200 pounds every year. (If they took the bus, they’d save even more.) They’re at 29,600 pounds per year—halfway there a year early.

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Time to replace the car. Thanks to consumer demand, electric cars have become widely available, and they buy one. Even charging on dirty power, they save 9,000 pounds. Household total is now 20,600.

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They improve their water system, including insulating their hot water heater and their pipes, and also lower the temperature of their water heater: 1,000 pounds down. When the old refrigerator kicks the bucket, the Joneses buy a new energy-efficient one and finally unplug a second fridge in the garage, knocking off another 1,300. Total remaining: 18,300.

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Grandma and Grandpa retire and move nearby. The Joneses now vacation within the range of their electric car, saving 3,300 pounds of CO2 each year. The city converts its bus fleet to clean electricity, which saves another 1,200 pounds. They’re down to 13,800.

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An efficient clothes washer saves carbon on its own, and saves dryer time. With all the money they’re saving, they decide it’s time to invest in a solar hot water system. Total: 2,000. Leaving 11,800.

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While the Joneses have been on this journey, their town has responded to citizen pressure and gone bike friendly. The new bike paths make it easy for both to ride to work. To ease the hills, they buy electric bikes. There are four months of the year when they can’t bike, so they continue their usual commute patterns then. Savings: 3,500.

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The Joneses’ furnace has been groaning and working overtime. They replace it with an electric heat pump, which also cools the house in summer. They also buy certified green, renewable power from their electric company, and the switch from coal plants eliminates the remaining 8,300 pounds of CO2 produced by the electricity for their house and car.

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Brooke Jarvis & Doug Pibel wrote this article as part of Stop Global Warming Cold, the Spring 2008 issue of YES! Magazine. Brooke is editorial assistant and Doug is managing editor of YES! Magazine.

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	New homeowners at a land trust development in the Old North End neighborhood of Burlington, Vermont. In the early 1980s, soaring housing costs were pricing longtime residents out of their own neighborhoods, and so the nation’s first municipally funded community land trust was born. Today it’s the nation’s largest, and this year it’s being honored with a prestigious U.N. World Habitat Award. Photo by Craig Line for Champlain Housing Trust

Since the recent housing boom went bust, the news has been filled with stories of panic-stricken homeowners, skyrocketing foreclosure rates, and multi-billion-dollar taxpayer bailouts.

It’s especially striking, then, that not a single owner of a house, condo, or co-op purchased through the Vermont-based Champlain Housing Trust (CHT) has experienced a foreclosure in the past year. Nor do any of the renters in the more than 1,600 CHT apartments have to fear eviction because of the mortgage meltdown. It’s the kind of track record that has brought the CHT international accolades and sparked an affordable housing revolution.

Over the past 25 years, the CHT has become one of the largest providers of affordable housing in the tri-county area surrounding Burlington, the state’s largest city, and home to its priciest homes and tightest rental market.

The genesis of the idea took form in the late 1970s, when environmentalist Rick Carbin formed the Vermont Land Trust to preserve open space as developers bought up farms. Instead of buying and holding land, as some land trusts do, the trust bought undeveloped properties at the edge of urban areas and resold them, often at a profit, but with strict limits on future development.

No CHT homeowner has lost a home to foreclosure in the past year. Among the nation’s 200 community land trusts, foreclosures are 30 times lower than the national rate.

Then, in the early 1980s, wealthy out-of-town speculators began driving up the cost of housing in Burlington. Longtime working-class residents were being priced out of their homes and neighborhoods. Frustration reached a boiling point when the political establishment cut a deal with big-time developers to put upscale apartments on the city’s scenic waterfront. Voter disgust with this plan to privatize public space led to an upset mayoral victory in 1981 by socialist gadfly Bernie Sanders and his ragtag Progressive Coalition.

Sanders and the coalition quickly sought to develop institutions that would have a lasting impact. They established the Burlington Community Land Trust as an independent nonprofit corporation in 1984 with backing from the Burlington City Council and $200,000 in seed money. While the land trust was designed primarily to promote sustainable home ownership in the city, the Lake Champlain Housing Development Corporation, set up at the same time, focused on rental properties in the areas surrounding Burlington. The two organizations merged in 2006 to form the nonprofit CHT.

The trust became a central part of the area’s affordable housing effort— one that bridges the ideological divide between a flawed free-market approach and heavy-handed government intervention. Both Democratic and Republican politicians found it difficult to oppose a program that promotes homeownership and offers life-long renters a “piece of the American Dream.”

Housing Trust 101

Buying land through a housing trust starts when the trust acquires a parcel through purchase, foreclosure, tax abatements, or donation. The trust arranges for a housing unit to be built on the parcel if one does not yet exist, then sells the building but retains ownership of the land beneath. The new homeowner leases the land for a nominal sum (for example, $25 per month), generally for 99 years or until the house is resold.

This model supports affordable housing in several ways. First, homebuyers have to meet low-income requirements. Second, the buying price of the home is reduced because it does not include the price of the land. Third, the trust works with lenders to reduce mortgage costs by using the equity of the land as part of the mortgage calculation. This reduces the size of the down payment and other closing costs, and eliminates the need for private mortgage insurance. In all, the trust can cut the cost of home ownership by 25 percent or more.

For longtime CHT member Bob Robbins, purchasing a home through the trust was the only affordable option. “We did not have access to money for a down payment on a regular home, and at our income level, we wouldn’t have qualified for a mortgage,” Robbins says. “Through the CHT, we were able to purchase a $99,000 home with just $2,500 down.”

Unlike federal programs that only help the initial buyer, the CHT keeps the property affordable in perpetuity by restricting the profit buyers are able to take when they sell the house. According to the terms of the CHT leases, homeowners get back all of their equity plus the market value of any capital improvements they made. However, they only get 25 percent of any increase in the value of the house, and none of the increase in the value of the land.

This model gives the buyer access to the benefits of homeownership otherwise beyond her means, including tax deductions, wealth accumulation through equity, and stable housing costs. In return, she gives up her chance at windfall profits. A study of trust homes sold to a second generation of buyers showed that members were realizing a net gain of 29 percent on the money they had invested. “These aren’t sky-high returns,” says CHT executive director Brenda Torpy. But most CHT homeowners would never have been able to buy homes otherwise.

“We’re trying to stop the concentration of land in the hands of a wealthy minority,” says Torpy.

The CHT has become an increasingly important force in Burlington’s housing market as well as in the surrounding counties, even as city administrations have come and gone. After 25 years, the trust has over 2,100 households living in its homes, condos, and apartments, not concentrated in pockets of poverty, but spread throughout the area. Since the 2006 merger of the Burlington Community Land Trust and the Lake Champlain Community Development Corporation into the CHT, the trust has become one of the region’s largest managers of rental property.

The CHT is remarkable not only for its size, but for its promotion of community empowerment. CHT tenants and owners vote for and serve on its governing board, along with government officials and other city residents with technical expertise, such as architects and urban planners. The system is designed so that all interested parties have a voice and a vote, making it an experiment in democratic self-governance as well as an affordable housing program.

Booms Without the Bust

CHT employs several strategies to make sure their model succeeds, even during tough times. They offer homes below the market rate—typically half the price of a comparable open-market unit. Unlike shady mortgage brokers, “we’re not going to let people take risky mortgage products,” says Chris Donnelly, CHT’s director of community relations. And if residents run into trouble, the land trust works with them. “It’s not hand-holding,” Donnelly says. “It’s standing next to the homeowner.”

A study conducted in December showed that foreclosure rates among members of 80 housing trusts across the United States were 30 times lower than the national average.

Tenants in the trust’s rental properties are also benefiting from CHT’s commitment to affordability and community building. By leveraging grants and subsidies, and because they aren’t seeking a profit, CHT is able to keep rents up to 30 percent below market rate, even though they use the most environmentally rigorous building standards and set aside funds to cover future maintenance and repairs. The trust fixes up the buildings that for-profit companies won’t touch. “When a fire destroys a block, we’re the ones who come running in to restore the neighborhood,” says Donnelly.

“We’re going to steward these places forever,” says Donnelly.

Housing advocates in Burlington have created a sustainable model for affordable housing through shrewd politics and a belief that housing is a fundamental human right rather than a commodity. Their model is being emulated across the country. There are 200 community land trusts in the United States today, including in large cities like Atlanta and Cincinnati. Washington, D.C., is in the midst of creating a 1,000-home land trust with advice and support from the CHT. Half of these trusts started up in just the past seven years.

Back in Burlington, the main obstacle to CHT’s expansion is money. The trust relies on government programs, grants, and donations to bring new properties into its model. “We’re doing about 25 new homes each year, and about 25 to 30 resales. We could easily do 100 sales a year if we just had enough cheap capital. The model has been proven to work. It’s gone to scale. It would be a great way to fill the need without the problems we’re seeing nationally,” says Donnelly. But public funding has been flat or falling in recent years, and the economic downturn will make other funding harder to find.

Donnelly hopes that the recent troubles in the conventional housing market and some international accolades will help spur more interest in the land trust model.

In October, CHT will be honored with a World Habitat Award at the annual gathering of UN-HABITAT, the global agency dedicated to sustainable living. The award is one of only two given out each year. Donnelly is proud of the achievement. “It’s like the Nobel Prize for sustainable development and housing.”