This story was updated on Oct. 11, 2024, because an earlier version included an inaccuracy.
A new two-bedroom ranch home with 1,177 square feet is for sale in Bloomington for $205,000.
That’s over $100,000 less than the median price of homes recently sold in the city. The home is available for such a low price because it is part of the Summit Hill Community Land Trust, which means the land on which the house sits isn’t being sold with the house.
“It’s homeownership, but it’s a slightly different model,” said Nathan Ferreira, director of real estate for the Bloomington Housing Authority, which helped create the land trust.
Income limits aim to give more people opportunity to buy
Potential buyers have to qualify by income: For example, a household of two people can buy the home only if they earn no more than $95,400. They also either have to have lived or worked in Bloomington for six months.
Potential buyers can get more details at an information session at 5:30 p.m. Oct. 23 at the Monroe County Public Library, 303 E. Kirkwood Ave.
The home is at 1541 N. Breckenridge Road in a new neighborhood southeast of the intersection of Interstate 69 and the Ind. 45/46 Bypass. The home features two bathrooms, gray wood-grain flooring, a covered front porch and a back deck. The primary bedroom has an en-suite bathroom.
The home has a standard block foundation. The homes in Summit Hill are modular, meaning they’re partially assembled in a factory.
Finishes are lower quality to reduce expenses, Ferreira said, but homeowners can upgrade finishes however they choose. The property has a designated parking spot, and homeowners can erect a car port or, on larger properties, build a garage and even an accessory dwelling unit, or “granny flat.”
What is an ADU? A cheaper way to build a living space in Bloomington?
The neighborhood has four houses so far, three of which have been sold. Two more are under construction. About 40 empty lots remain.
Some of the homes in the neighborhood are market-rate, meaning they are not part of the land trust. Ferreira said that’s by design because the housing authority did not want to create a low-income neighborhood. It is targeting working class families.
The gap between incomes and home prices continues to increase, Ferreira said, primarily because not enough single-family homes are being built. That’s in part because of the lack of available land and because developers tend to build luxury homes or student housing as those developments generate greater profits, he said. That leaves middle income families with few options because ever fewer people can afford to buy homes. The land trust model counteracts some of those wage/price dynamics.
Home prices continue to climb in Bloomington
The median monthly sales price for the Bloomington area in September was $334,500, according to the Indiana Association of Realtors. Residential assessments in Monroe County have increased an average of 9.4% in the last three years, according to data provided by the Monroe County Assessor’s office.
The land trust home price is lower because it does not include the price of the land. Instead, owners pay a monthly ground lease of $45. Ferreira said if the land were included, the home would probably sell for above $250,000.
The land trust model is a “huge opportunity” for homeownership for people who otherwise would have to continue to rent, Ferreira said.
Ferreira said buyers of land trust homes will be able to build equity in their homes, but they will receive only 25% of the home’s appreciation, which is the difference between their purchase price and the eventual selling price.
The land trust retains 75% of the appreciation and will use that money to help the next buyer purchase the home. As the gap between incomes and house prices continues, the land trust has to be able to offer greater subsidies to assure the land trust homes remain permanently affordable.
For example, the land trust sold a four-bedroom home to a single mother, but her income was not quite high enough to afford the original asking price, so the land trust kicked in a subsidy so she could complete the purchase. That subsidy will be passed on to future owners if the current owner ever sells the home.
Owners can, however, stay in the homes and even pass them to their children. However, the children, too, would only retain 25% of the home price appreciation if they sold the home — though they would retain 100% of their equity.
Get ready for higher property taxes: Assessments in southern Indiana county rose 10%.
The city obtained the land through a deal with the developer of the Atlas on 17th apartment complex. The developer, Trinitas, gave the city 45 lots on the northern part of the Atlas development, part of an agreement the parties reached during the planning approval process.
Ferreira said most of the calls he has received on the Breckenridge Road home are from retirees moving back to Bloomington. Potential buyers must have less than $60,000 in savings, but retirement accounts are excluded from that asset limit.
You can find out more about the home at tinyurl.com/236jfa7r.
Boris Ladwig can be reached at bladwig@heraldt.com.
This article originally appeared on The Herald-Times: Bloomington Indiana land trust has new home listed for $205000