You can have the house, but we're keeping the land

[rreidnauer]

This is a frightening new angle the local government has come up with in my area. As posted at http://www.mcall.com/news/local/all-b1_5trust.6720195dec27,0,4003405.story Some highlights:

Lehigh and Northampton county community development officials are bidding to create more affordable housing by removing the land from the equation, using money from this summer's federal mortgage bailout.

Wait! They are going to take taxpayer money to take the land away from the taxpayers?!?!? (supposedly because the taxpayer can't afford it, because it's so heavily taxed!!!!!! WTF?)

.....owners of land trust houses could be required to limit their profits on the future sale of the homes, keeping the residence prices reasonable.

Huh? So no more free market for homeowners? Who is going to be telling me how much I'm allowed to sell my home for???? This is insane!!!!

[StressMan79]

is all they are doing, making homes "affordable" will only last so long. Eventually, the market will catch up. It has to. Its like a faultline. By "reinforcing" the fault, all they are doing is guaranteeing a bigger disaster later on. Oh well, I suppose I'll have my place in the mountains off the grid and away from the inevitable turmoil. I just wish people would look "at the governing dynamics" and decide what they are going to do before slapping a bandaid on something that will just make the problem worse.

-Peter

[Shark]

It just makes it easier for them to take the land back whenever they like....

[ChainsawGrandpa]

Oh this is so fitting:

http://despair.com/government.html

-Rick

[ChainsawGrandpa]

Now that I think of it land without houses is nothing new...
they're called mobile home parks. Not a good deal either.

-Rick

[Kola]

this is just more big-gov control stomping on individual freedoms.

little by little they keep nibbling away..and the sheople sleep.

zzzzzzzzzzzz

[Bowman]

Whoa, folks! You've misunderstood and/or mischaracterized what the county agencies are planning to do. Read the article with an open mind and you will understand the following: (1) a government-controlled and/or owned trust would purchase foreclosed properties-- the same as anyone else could do; (2) the trust would rehab the properties and sell them to low-income buyers (they mentioned teachers and police officers in the article, but lots of other people would qualify, too); (3) the trust would sell only the improvements, which would help keep the cost even lower; (4) if you want to own your own land, don't buy from the trust; (5) to make sure that these homes, which sit on trust-owned land, remain viably low-priced, the buyers would be required to agree to limit the price increase they could get -- probably by some percentage per year owned; and (6) this plan does NOT affect property owned by anyone else, including you (whoever you are and wherever you are).

A few points. I think creating low-income housing is usually best left to the private sector and/or charities. Mobile home parks are not the only example I can think of -- anyone ever hear of Hawaii? Most homes there are bought without any ownership in the land -- same as my folks did back in the 60s. Seems to work fine there, although it's not what I would like or tolerate if I could help it. I recommend folks stop the knee-jerk response to every government agency or program so much so that they see a vile conspiracy everywhere -- it's a common thread on this site. People you and I know, and trust, work for governments big and small. How many of them have plotted to steal your land, money, cars or life? I can't think of one, and I know lots of people who work for local, state and federal government agencies. So did I, when I served in the Air Force.

Anyone ever help build a Habitat for Humanity house? I have. The ones around here a nice and clean, but with small plots of land, small in size, and would never be confused with a typical home on the market. Our local HfH is building houses in clusters of 4-12 lately; they will never be worth much compared to non-HfH homes. The owners have to contribute labor toward their own homes, which is a good requirement to separate moochers from folks who are willing to work hard and simply need a hand up. Pride of ownership helps keep these neighborhoods in better shape than large developments in big cities -- which are a waste of money and help virtually no one.

Here's something to think about. Ever watch This Old House, the one where they rehabbed a D.C. property for sale to some family at a price well below fair market value? I think the rehabbing group was a private charitable organization -- architects, lawyers, contractors, and others made in-kind contributions or took lower fees, and lots of people gave money to the org. Ever wonder if the low-income buyer would be permitted to sell the house and take the $250K-$400K profit for themselves? (I can't recall how much equity the property was going to have, but it was very significant.) Perhaps the buyers were required to repay the initial equity back to the entity that rehabbed the property and sold it to them -- that would seem very fair to me, and permit them a profit over and above that if they kept the property up. I also cringed at the idea that people might be able to take advantage of the generosity of people who gave money, time or goods to the charity.

About the subject plan in PA, think about this -- is it really unfair to keep a low-income person from taking advantage of a government program, considering they would be selling a house to another low-income person?

As I said above, I'm not a fan of governments building or rehabbing homes for low-income people. Those people should have to do what everyone else does, namely, move to a lower-priced area to find an apartment or home to rent or buy. Life's tough -- the folks on this site are interested in doing something for themselves to avoid paying a 30-year mortgage. Good on ya. But don't look for a government theft program where there isn't one.

Happy New Year, and Happy Building. Have a Fine '09!

John

[Shark]

Yes but if they are using some of the "bail out" money to fund this, then it is ALL taxpayers paying for this.

& sorry, but if you look at most gov't run programs, they waste so much $$ & there is no accountability for anything.
Just what I want done with my tax dollars.

[rreidnauer]

I see it like this.

The government bailout plan gave taxpayer money to the banks, who merely hoarded it, and they won't even disclose where the money went to the public, which are the taxpayers they supposedly lent it from. (I see it as taken from) Meanwhile, homeowners are loosing their homes (and yes I agree, many acted greedily and deserved to, but not all) which could have otherwise been assisted in off-balancing their variable interest rate increases, with this bailout money, to avert these foreclosures. Instead, the gov't left them to fail, now plans to buy up the foreclosures with the bailout money that should have been utilized as in the previous sentence, rip the land rights from the property, set restrictions which I find to be unconstitutional, and sell it back to a poorer society. It doesn't sound like a favor to me. It sounds like being placed under an even bigger thumb.

Yes, it's an easy situation of "don't like it, don't buy it" but as with every bad idea, it's a toehold for the next step towards the "S" word.