Team wins Haynes Award, a top honor for USC Price capstone projects
Homeownership has long been an important way for American families to build wealth. But skyrocketing housing prices, lack of affordable units and rising mortgage prices—made worse during the 2008 Great Recession and in the aftermath of the COVID-19 pandemic—have thwarted that dream.
Lack of homeownership opportunities is especially problematic in underserved communities, including those in cities like Detroit, Michigan. The predominantly African American city’s homeownership rate decreased from 55% to 47% between 2000 and 2018.
With the goal of improving opportunities for would-be home buyers, the Detroit-based housing nonprofit The Ownership Initiative Consulting (TOIC) recently enlisted the help of USC Price master’s in public administration (MPA) students Jacqueline Cao, Christine Delostrinos, Mehrsa Imani, Trevor Magno and Christian Villanueva.
As part of these students’ final capstone class—in which MPA students are paired up with real-life clients on a public policy challenge—the group was asked to explore the idea of land contracts as an alternative path to homeownership for lower-income neighborhoods in Detroit.
Land contracts are legal agreements that allow homebuyers to purchase a property through installment payments made directly to the seller versus a bank. Historically, land contracts have been considered a much riskier path to home ownership than traditional mortgage lending, with high rates of seller abuse and exploitation.
“This project stood out due to its ability to make a real impact in a community that has been the epicenter of housing challenges over the years,” said Adam James, the USC Price faculty advisor for the group, who cited a long history of discriminatory and exploitive housing practices in the Detroit market.
The student team embraced the challenge and got to work, collecting and analyzing land contract data and historical evidence. They investigated different housing ecosystems and focused on best land contract practices currently used across the country.
Next, they interviewed local and national experts to gain insights and knowledge about the risks and benefits of land contracts, and to better understand how to counter the historical shortcomings of the approach.
“Prior to this capstone project, I had not done this type of interviewing before. It was a really exciting chance to research, network, and connect with a variety of local and national organizations and subject matter experts,” said MPA student Jacqueline Cao. “The process gave us a unique opportunity to practice informational interviewing and apply our cumulative knowledge from the MPA program on a professional level.”
Based on their research and interviews, the students came up with several integrated recommendations that could shore up future land contract opportunities and presented these to TOIC.
Their recommendations included creating a pre-purchase assessment process and bulk contract purchasing vehicle, in which a third-party entity would thoroughly inspect and assess each property and secure approval of the assessment by both the selling and purchasing parties. The students also recommended a seller and broker certification program to mitigate the burden on the buyer and prevent sellers from reengaging in predatory activities.
To support these new initiatives, students added a marketing campaign and ongoing nonprofit support services. They additionally recommended passage of a new city ordinance to protect land contract buyers from abuse.
The students were recently honored with the John Randolph and Dora Haynes Foundation Recognition Award for Outstanding Performance, which serves as USC Price’s top honor for capstone projects.
“The final capstone project was a great experience and allowed the team to put into practice everything we learned throughout the program,” said MPA student Christine Delostrinos. “Directly applying the curriculum to a real-life project and a real client made the project more practical, especially in emphasizing the need for collaborative approaches to public policy challenges.”