Oh, wait... we tied their hands when they accepted the assistance. Let's just provide some other form of welfare. So much for ownership!
This is an interesting Washington Post article about how rising property values have hurt homeowners who bought their homes through Habitat for Humanity.
Rising property values across the region have put the squeeze on taxpayers, but the bite has been especially acute for owners of Habitat for Humanity homes in Northern Virginia. In some areas, their homes have doubled and tripled in value in the past three years. At least a dozen of the 47 Habitat homeowners in Northern Virginia pay more in property taxes and insurance than they do to pay off their mortgages, according to Karen Cleveland, executive director of the Northern Virginia arm of the housing nonprofit group. It is part of an international group that builds homes with volunteers and sells them to low-income buyers.Now, you’re probably wondering why they just don’t sell. Here’s why:
In recent months, Habitat for Humanity of Northern Virginia has launched a campaign to persuade localities to provide tax relief for their homeowners. It is arguing that the Habitat homes shouldn’t be assessed at market rates because deed restrictions prevent their owners from selling the homes for profit or getting home equity loans until the 20-year mortgages are paid. If Habitat homeowners sell their homes before 20 years are up, they must sell them back to Habitat for the amount they cost — $80,000 to $120,000 in most cases, Cleveland said, which is the restricted value.Perhaps someone can help me out here; why put this onerous restriction on the deed? I can sort of see that the nature of the charitable donation would be altered if it essentially became a cash gift rather than a house. And I suppose it makes some sense to restrict immediate sale. But 20 years? This seems to deprive the recipients of one of the main benefits of homeownership: capital appreciation. What would be wrong with letting this woman sell and buy another, cheaper house elsewhere in the area, rather than petitioning the local government for tax abatement? She and her family would be just as “housed.” On the other hand, she would seem to have a good case that her house is not actually worth the assessed price, since she can’t sell it for that amount. Thoughts? [Crooked Timber]