The process of transferring publicly owned and abandoned properties to households, often for as little as one dollar, is referred to as urban homesteading. In exchange, the homesteader commits to rehabilitate, maintain, and occupy the property. Wilmington, DE introduced an early urban homesteading program in 1973 in order to reduce the city’s inventory of tax-delinquent properties. Mayor Thomas Maloney asserted that the program would address a severe need for affordable housing and return property to the city tax rolls.
The Housing and Community Development Act of 1974 authorized a two-year, national Urban Homesteading Demonstration program that allowed HUD to transfer vacant properties to local agencies known as Local Urban Homesteading Agencies (LUHAs). The demonstration provided homeownership opportunities to low income families. From a pool of 61 applicants, HUD selected twenty-three cities to design homesteading plans that best met local needs.
The Housing and Urban-Rural Recovery Act of 1983 made several changes to the Urban Homesteading Program. The act created rules governing the procedure for selecting property recipients, including requiring priority to be given to applicants with a housing cost burden, those paying more than 30% of their income toward rent. Grants targeted to households with income of no more than 50% of the area median income were provided to assist recipients with the cost of rehabilitation. At this stage, 110 cities were participating in the program.
The Federal Urban Homesteading program continued through 1991. Today, the principles underpinning the Urban Homesteading program are still a core of local initiatives to dispose of vacant or foreclosed properties, and to expand the stock of affordable housing. For example, Chicago’s Large Lot Program allows homeowners to buy lots on their block for one dollar and repurpose them as they wish. Similarly, Buffalo’s Urban Homestead Program allows residents to buy homes for one dollar if they can demonstrate a commitment to repairing the homes and living in them for at least three years.
More information on Urban Homesteading history is at http://1.usa.gov/1tqzeBy.
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