Monthly Archives: April 2007

Asset-Building Comes of Age

(This article first appeared on SHELTERFORCE NO. 149 in the Spring 2007 issue)

From IDAs to comprehensive community wealth-building, the number
of strategies to increase personal and collective assets is growing.

By Gar Alperovitz, Steve Dubb and Ted Howard

In the past decade, individual and collective
asset-building has increasingly become a central goal in the community-
development field. As a result, asset-
building approaches have proliferated:
The most common is the individual
development account (IDA), which builds the financial
assets of low-income individuals
through matched-savings plans offered by community
development groups. But the IDAis only
one example of a growing number of strategies
aimed at increasing both individual wealth and
the collective assets of a community.
In under-funded communities across the
country nonprofits and local governments have
begun to implement more asset-building strategies
for communities, from nonprofit-owned
businesses to new municipal enterprises. The
critical challenge that remains is to integrate the
various wealth-building activities, a step which
could significantly boost both the capacity and
revenue of nonprofits and communities.

New Types of Asset-Building
Many asset-building strategies combine individual
and community wealth-building.
“Community wealth” arises when an institution
uses the wealth or assets it owns to benefit
the community at large. Community land
trusts, for example, do this through homeownership.
A land trust is a locally based nonprofit
that owns land on behalf of the community.
The trust sells houses on its property using a
restricted deed but retains ownership of the
land underneath. The trust and the purchaser
share equity through a formula that allows for
some equity accumulation for the family (although
less than with direct homeownership)
but limits the resale price to preserve permanent
A study of the land trust in Burlington, Vt.,
found that the average land-trust homeowner
gained between $5,000 and $8,000 in equity
in about six years, allowing the majority to
“step up” to traditional homeownership. The
equity gain retained by the trust enabled it to
provide affordable housing to future generations—
a type of community wealth of great
significance as public subsidy funds become
more limited. Chicago, Ill., and Irvine, Calif.,
are among the many cities now developing
land trusts. By 2025, Irvine expects to develop
almost 10,000 units of land-trust housing,
which will represent 10 percent of its total
housing. (See “City Hall Steps In,” page 12.)
Collective forms of business ownership are
also thriving across the country. Read More »

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