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As a result of this phenomenon, our homes are becoming more expensive to our buyer <br />population. <br />Affordability (chart) <br />- This slide shows that the same home that became more affordable relative to appraised <br />values, became less affordable relative to incomes. <br />- As HUD income limits remain stagnant, affordability will become mare problematic. <br />- The 2006 AMI Percentage figure includes the monthly stewardship fee of $70 per month. <br />Affordability <br />How do we keep homes affordable when HUD income limits are stagnant? <br />• Add subsidy, or <br />• Allow homes to be sold out of the Land Trust <br />- When homes that are barely affordable come back onto the market at resale, the only <br />way to sell them is to inject subsidy that allows us to reduce the price to the next buyer. <br />- We have done this several times in the past when we thought a home was too expensive. <br />- If homeowners are unable to sell their homes because they are not affordable, then our <br />model breaks down. <br />Affordability <br />Subsidy funds needed: <br />• $1,564,000 over 20 years <br />^ Could be higher if mortgage rates rise above 7% <br />- Our projections show that $1.5 million will be needed to keep homes affordable using our <br />new model. <br />- It is important to realize that our projections are based upon mortgage rates remaining <br />steady at 7% for 30 years. <br />- If rates move higher, or if the HUD income limits do not increase as we are projecting, <br />additional subsidies will be necessary. <br />Maintenance <br />^ Long-term maintenance is expensive <br />^ Little incentive for homeowners in current model <br />^ Maintenance is a requirement of responsible stewardship <br />^ Important to inclusionary housing <br />- With regard to long-term maintenance, anyone who has owned a home knows that <br />properly maintaining a home is expensive. <br />- We believe it is imperative for Land Trust homes to be well maintained because of where <br />they are located - in newer neighborhoods like Larkspur, Meadowmont, Pacifica, and <br />Vineyard Square. <br />- As holders of the deed to all of these properties that represent community assets, we <br />believe it is our responsibility as stewards of this property to insure they are well <br />maintained. <br />