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In a prior article we wrote about the concept of a 21 [ [link removed] ]st [ [link removed] ] century Homestead Act [ [link removed] ] as a way to redevelop depressed urban areas while providing homeownership opportunities for working class and middle class Americans. Workforce rental housing is simply not working as a means to solve the housing gaps in America.
Urban pioneers have transformed undesirable areas into vibrant neighborhoods. This has been a common practice in New York and other cities with warehouse districts. Abandoned factories and office buildings in Tribeca and SoHo have been converted to residential apartments and lofts. These neighborhoods have now become trendy and very expensive and some of the most desirable. However, thus urbanization is usually a gentrification process that ultimately leads to the removal of those working class families that have lived in neighborhoods pre-transformation.
How can it be done different?
The 21st Century Homestead Act would grant similar opportunities to working class and middle class Americans.
How Would this Work?
Every major city in the country has run down blighted areas in various states of disrepair. This property can be taken by eminent domain. Some of these properties may have already been abandoned. Once the land is acquired, these properties could be developed as attached townhouses or several story apartment buildings using prefab houses to keep construction costs down (with mostly assembly of these units).
If the units are developed at affordable prices, these urban pioneer homesteaders would then purchase the unit and the government would then retain title to the land. The Homesteader would pay an annual fee to the government that would be applied to the purchase of the land. After a fixed time (ie. 15 years of payments) the land title would be transferred to the Homesteader.
What about financing costs?
If mortgages return to low rates, these sales would be financed with low interest loans. If the rates remain high the government would sell tax free bonds at a lower interest rate than traditional loans. The funds raised would then be used to finance the mortgages on the units.
If done properly for the same monthly after tax costs of a rental unit of a similar size, Homesteaders would become home-owners. A previous area of urban decay would be transformed into a residential neighborhood. With new buildings and buildings with commercial space and schools, Businesses would come to the area to provide services to the new homeowners.
In the end everybody wins. Homesteaders become home owners. Urban neighborhoods would be revitalized.
This is the pioneer spirit that America was built on transforming land from low value to a valuable home where the homesteader can raise their family and build equity and transfer to the next generation, building meaningful generational wealth.

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