Jesse Beason, executive director of the Portland Community Land Trust, sat down to speak with The Skanner about where the organization is headed, how it has weathered the economic downturn and whether or not the Land Trust's clients can still get loans.
The Portland Community Land Trust (www.pclt.org) is a 10-year-old nonprofit organization that sells homes to qualified first-time home buyers who have steady incomes but who could not normally afford a home in Portland. The homes are sold at significantly less money than the market rate, allowing an affordable mortgage payment for working families.
The Skanner: What is the current condition of the Portland Community Land Trust?
Jesse Beason: We're as stable as one could expect. Certainly the shift in the housing market has affected us … we're not immune. The median home sales price in Portland is still $100,000 to $120,000 more than our families can afford to pay, so there's still a place for us. When we started in 1999 the average sales price was $180K, so there's still need out there for these opportunities for people.
TS: How has the unavailability of mortgages affected the ability of your clients to finance your homes?
JB: It hasn't affected them greatly, in part because the loan to value in our homes is so great, because our homes are valued at a lot more than the families are actually buying them for, and so the bank looks at that pretty favorably. We work pretty hard to make sure homeowners have all they need to really be successful with their home. That includes, working to make sure their credit is in place, saving up for a down payment. When those pieces come together it hasn't been too difficult for our families.
TS: Your foreclosure rate is 0. How do you maintain such a low foreclosure rate?
JB: Nationally, organizations like ours have a .5 percent foreclosure rate, so as an industry, that's six times less than the national average. We focus on affordable prices, that is, homes that people can actually afford, not loan products that people can afford in the first couple years but not after they reset. Typically, if folks are facing financial hardship, we are there to talk to them about the various options. What we try to do is provide a place outside your lender to be able to talk about what your options are. Lenders are overwhelmed or not communicating with homeowners. Luckily with a house payment that is incredibly affordable, even with unemployment benefits, they are able to keep their payments, which is not to be said of plenty of other people. We can talk to them about what their options are, from home equity or deferred payment or just helping them sell their home. We typically can sell their home a lot faster than the market. For people where there just wasn't any other option, we helped them avoid foreclosure and make a graceful transition.
TS: Have you seen any change in the economic portfolio of your clients?
JB: A lot of people are more nervous than ever about their long term employment. That certainly affects people. We continue to serve families who were kept out of the market. That was this market now and it was this market three years ago. There's just aren't any options for people who have a stable income but it's just not high enough to afford the stability of homeownership. We have a lot of interest in our program, we remain pretty busy in our orientation classes, … so what they see is 'here was the bar three years ago' and the bar is getting a little bit lower, and they're thinking now might be the time they can reach that. We have a waiting list of about 100 people. It doesn't mean a 100 people buy their home before you, it means 100 people are alerted to opportunities. If people join now and are ready to buy a home, they can get a home … in two months to a year.
TS: Tell me about Pardee Commons, a soon-to-be built housing community in Southeast Portland.
JB: It's a great project. It's a 10 unit, new construction project in Outer Southeast Portland. It is five single family homes and five rowhouse/townhomes centered around a courtyard feature. They are two and three bedrooms and start at $125,000 and go up to $150,000. They are very green and very sustainable homes, but they are high performance, Earth Advantage homes. The project is getting sheetrocked right now, so we anticipate move-in at mid-June and will start marketing at the end of the month. People who are interested should get on the wait list right now.
TS: Where are you headed as an organization?
JB: One of the pieces we're looking at is, how do we serve the need beyond Portland? And potentially, how do we adapt our model of homeownership to things like commercial spaces – to foster businesses that could potentially suffer displacement because of gentrification or rising real estate values or lease rates. We know that for the families we serve, not all want to live in Portland. People around the region are looking at ways to own their home.