Thanks for taking time to learn about how Moscow Affordable Housing Trust. This letter is divided into three sections: Background, Aspirations and Current Need
The goal of the Trust is to create affordable homeownership opportunities for households earning 50%-80% of the Area Median Income (AMI). For our area, this means a gross household income between approximately $30,000 and $50,000/year. The Trust also provides homebuyer education by offering the Finally HOME course, required by some lenders for certain affordable loan products.
Our home buyers are members of the local workforce. They are households with a steady income, who pay their bills, have good credit, and can qualify for a bank loan. Our buyers may be your friends, neighbors, co-workers or employees. They are required to occupy their home and, like other owners, are more likely to contribute positively to their neighborhood and city.
The Trust is a 501.c.3 non-profit Idaho corporation. It is also a Community Housing Development Organization (CHDO), a federal designation that provides access to HOME program funds managed by Idaho Housing and Finance Association (IHFA). A CHDO operating grant can pay up to 49% of the Trust’s expenses. Other general funds come from philanthropy and Developer Fees paid by the HOME program for the successful sale of a home to a low income buyer.
The Trust operates in Latah County, but its primary focus is within Moscow. The Board made this decision because the bulk of jobs in the area are in Moscow and Pullman and a Moscow homeowner will likely have lower transportation costs to work than someone living elsewhere in the county. The cost of transportation to work is one of the three key issues to make housing affordable. The other two are housing cost (mortgage payment) and monthly utilities.
The Trust is beginning to operate as a Community Land Trust. The land trust model is a strategy to provide a permanent guarantee of affordability. The Trust owns the land and through a "ground lease" leases the land to the buyer of the house. A resale formula in the lease prevents the homeowner from selling the value of the land when the home is sold. Thus, the value of the home always remains below market value by the value of the land.
The Trust’s second approach to maintaining affordability is house size and format. Smaller houses (2 bedroom) can be starter homes for young families and places for empty-nesters to “age in place.” Smaller houses naturally sell for less. The market isn’t creating smaller houses, because as a local Realtor says, ‘you can’t put a cheap house on an expensive lot.’
Townhouses (several houses in a row sharing a common wall, but with ground to sky ownership) are less valued by the marketplace than the freestanding single family home. Consequently, the family needing a larger house can save by accepting the trade-off of closer neighbors.
Because the Trust does not depend on profit from the real estate transaction, it can work in the small house and townhouse niches. It does not depend on volunteers, rather the Trust works with local contractors and businesses, striving to get a fair price that that will enable doing more business in the future. The Trust hopes to increase homeownership opportunities without hurting the business of for-profit developers.
The Trust has two other aspirations for its work. Energy efficiency and accessibility by people with disabilities.
Utilities are the third expense commonly associated with the affordablility of a house. The Trust builds to all local code requirements, but they are not very stringent. IHFA sets mandatory efficiency requirements for larger multifamily rental projects and the Trust aspires to voluntarily build to IHFA’s efficiency standards for energy and water conservation.
Improved efficiency will save owners money over the long run, but it creates additional costs which are above what the Fair Market Value reflects. That is, the Trust doesn't get the 'payback' from its efficiency investments.
Accessibility for people with disabilities is a second aspiration. Disabilities come in many forms, including temporary ones resulting from injuries. Disability designs are recognized in three categories: Visitable, Adaptable, and Accessible. The Trust strives for all its houses to meet the Visitable standard (no steps on entry route, wide front door, adequately sized bathroom). This should allow a disabled person to visit. When possible, the Trust seeks to create Adaptable houses; designs that meet the ADA Accessible standards, but without the grab bars or other special hardware. Anchors will be hidden in the walls to accept grab bars if needed later.
Accommodating the needs of mobility impairment is easy during design and construction and more challenging later. And everyone can benefit from the ease of a wider door or larger bathroom. But these features come at a cost premium over standard construction. The Trust is seeking support to be able to create houses that meet national standards for accessibility.
Our current need is for capital to purchase land. To operate as a Community Land Trust, land must be purchased and held in perpetuity. Ground Lease rates are intentionally kept low, so that the cost of the lease does not make the home's mortgage unaffordable.
Presently we estimate that building lots in Moscow cost about $10/square foot, once all utility and other preparation costs are considered. Most building lots in Moscow are running in excess of $40,000, a few that are less expensive have some significant challenge, like a steep hillside.
Our request is for help paying for land. Many granting organizations do not want to fund capital campaigns, but that is essential for land trust activties. Banks and other charaties are willing to help with energy and ADA expenses and general operations.
Thank you for considering how you can help the Trust meet its aspirations.