Pay It Forward Single Family Homeownership

WHAT IS A PAY IT FORWARD SINGLE FAMILY OWNERSHIP HOME?

Douglass Community Land Trust (Douglass CLT) is making permanently affordable ownership housing available to qualifying DC residents, current and future, whose needs are not met by the traditional market and who would not otherwise be able to afford a home! Single-Family Homeownership includes rowhomes, townhomes, detached homes, and condominium units. Limited Equity Housing Cooperatives, another form of ownership, have a separate set of guidelines.
A Pay It Forward Home is one that starts out with a lower price and will always be able to be affordable to households with low-mod incomes because it is part of the Douglass Community Land Trust! Each successive owner chooses to leave part of the increased value in the property, paying it forward so a family like theirs can benefit from it in the future.

Douglass CLT partners with residents, and with mission-driven developers, such as Habitat for Humanity, to find and/or create housing that can be made affordable to households with low-moderate income. We buy homes from owners willing to sell at far below market prices, and we partner with developers creating new for sale homes. We raise grant money to invest in the home as permanent subsidy. This subsidy initially invested in CLT properties is retained over time, serving generations of homeowners and occupants without requiring increasing subsidies at each successive sale to keep them affordable. As in other home purchases, the homebuyer must qualify for a mortgage to purchase the house. However, Douglass CLT will keep ownership of the land, issuing a 99-year land lease to the homeowner. That lease contains a resale agreement that says that if/ when they sell their home, the owner will sell at a price affordable to a family at about the same income level as the selling household when they bought the home. The precise income range and sale prices are specific to each home and / or project and advertised in advance. And, critically, when you purchase a Douglass CLT home, you will always have us as a partner & gain access to our CLT community stewardship resources.

Land Leases and Covenants Create Nonstop Affordability

The Land Lease is a typical way Douglass CLT creates and maintains non-stop affordability. Douglass CLT owns the land and leases it to a low-mod-income household that has purchased the house on the land. Douglass CLT does not own the house (also called “property improvement”) but does own the land beneath the house. Douglass CLT will then issue a 99-year land lease back to the owner of the house that incorporates a covenant to ensure permanent affordability for low-income persons.
In situations where it is not feasible to separate ownership of the land from ownership of the building, we use another legal mechanism, a Deed Restricted Covenant, to ensure permanent affordability for low-mod-income persons. For example, this has been used for condominiums, particularly where some but not all the units in the building are income restricted.

Resale Formula: Build into the Land Lease and the Covenant, the Resale Formula is designed to keep the home affordable for subsequent buyers, while enabling wealth creation for the selling household. Subsidy invested in CLT properties is retained in the home, serving generations of homeowners without requiring increasing subsidies at each successive sale to keep them affordable.

Douglass CLT members voted to adopt an index-based formula tied to the median family income (MFI). This formula protects the lasting affordability of the home for the subsequent homeowners of the same MFI brackets over time, while returning equity gain to owners. Under the MFI-Index resale formula, the maximum sale price for the homeowner increases in proportion to the increase in income in the Washington DC metro region.