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Nate
Project Manager
Asked a question 6 months ago

Our organization is applying for the Housing Breakthrough Challenge through Enterprise Communities. We are looking for additional and innovative ideas housing construction, financing, and resident services and support. I would love to know your ideas for scale-able solutions.

Where am I?

In Strong Towns you can ask and answer questions and share your experience with others!

What about a mixed-use co-op to support those who would like to invest in a limited equity property rather than renting? www.housinginternational.coop/members/national-association-of-housing-co-operatives/41

To me, the go to people for the practical work here is the Incremental Development Alliance. You can find them on their web page26 and they are also really active in their Facebook Group22.

I think the organization Small Change29 has the most innovative work on local finance I have seen.

Both of their approaches are incremental, yet scaleable across neighborhoods. We have done podcasts and media on both of them. Let me know if you'd like us to track down some of those.

Your community probably has a property tax of between 1% and 2% of value annually.  This has the economic impact of a 10% to 20% sales tax on construction labor and materials.  Reducing the property tax rate applied to building values could significantly reduce the cost/price of buildings, making them more affordable.  Reducing the market rate of housing by about 10% might not seem to help the very poor -- but it does.  Many subsidy programs make up the difference between 30% of income and the market price.  If the market price is reduced, limited subsidy dollars can help more people.

But, if the property tax rate applied to building values is reduced, how does the community preserve its revenues?  By increasing the property tax rate applied to land values.  Surprisingly, increasing the tax rate applied to land values tends to lower land prices/rents.  Thus, by shifting the property tax off of building values and onto land values, a community can make both buildings and land more affordable without any increase in spending or any loss in revenues.

For more info, see "Want Affordable Housing? Look to the Land!" at http://solidgroundcampaign.org/blog/want-affordable-housing-look-land .25