Housing Affordability, Essay Example

Housing affordability is based on several factors including geographic regions, costs of production materials, availability of land, demands of mortgages, employment rates, tax incentives, filtering congestion and other factors. Some recent projects to promote housing affordability in less than affordable areas include barriers in infill development, community land trusts and affordability, prevention of housing foreclosures, promotion of fair housing and conservation easements.

“The United States Treasury has partnered with financial institutions in attempt to lower mortgages by a rate no greater than 38%.” (Home Affordable Modification Plans). Servicers to homeowners will receive incentives to keep their homes maintenance. The longer they stay with the home owner the longer they will receive the incentive of $1,000. Any borrower that pays extra towards his/her mortgage will receive an incentive from the government annually.

“The near doubling costs of lumber and building material costs have knocked over 100,000 people out of building and buying homes across the United States.” (Increasing Lumber Prices Affect Severely Affect Affordability NAHB Tells Housing Committee). Since 1992 lumber prices have risen approximately 42% making it impossible for many Americans to be able to afford to own a home.

For instance, in Asia the rental world has increased in the past three years due to the subprime loans being vacated and the cost of land skyrocketing. “People simply cannot afford to purchase land and buy homes the way they used to” says, Christian Cruz (2008).

Michael Grover reports, “Community trusts are promoting ownership of homes for families, however the banks and government is going to have to aid the first time home buyers with incentives such as low down payments and help with closing costs. “In CLT arrangements, the ownership of the home rests with the homeowner, while the ownership of the land, which is leased back to the homeowner, lies with the trust organization.” (Grover 2007). To date there are approximately 175 CLT’s that operate in America. Their hope is to enable the economy to strengthen whilst helping families to become homeowners again.

A conservation easement is used to put specific limitations or uses on the land such as on wildlife or agricultural pieces of land and in return they receive either money or tax incentives for use of their property. They help to preserve the use of the property, generate income and help to promote the community and economy all at the same time. This is most often used for underdeveloped communities or communities that cannot afford to purchase housing.

In combination the above spoken forms of modifications can contribute to housing modifications to help make housing affordable in areas that are declining because of the current economic conditions are simply because the geographic region is simply not a good region for promotion of housing affordability. The best incentive plan would most likely be a conservation easement and a financial contribution from the government in collaboration with the banking industry making their contribution by offering lower interest rates and making it easier to accomplish loans.

Works Cited

Home Affordable Modification Plans Retrieved April 9, 2010 from, http://www.ustreas.gov/press/releases/reports/modification_program_guidelines.pdf

Increasing Lumber Prices Affect Severely Affect Affordability NAHB Tells Housing Committee Retrieved April 9, 2010 from, http://www.thefreelibrary.com/INCREASING+LUMBER+PRICES+SEVERELY+AFFECT+AFFORDABILITY,+NAHB+TELLS…-a014928988

Cruz, C. (2008) Housing Sales and Rental Market Areas in Asia Retrieved April 9, 2010 from, http://www.globalpropertyguide.com/investment-analysis/Housing-Sales-and-Rental-Markets-in-Asia