NEW-HOME BUYERS SEE dozens of charges on their closing statements. For buyers of Lennar homes in Southern California, the statement includes a unique charge—an “endowment fee” for the Lennar Charitable Housing Foundation.
The fee, which is 1/20 th of 1 percent of the sales price of the house ($50 per $100,000), goes to assist housing-related charities. To provide a perpetual source of income for the foundation, Lennar has attached the fee to the transfer of the property, requiring future buyers to make a similar contribution. Since its inception in 2002, the fee has raised more than $1 million and is expected to generate $1.5 million in 2005, says foundation executive director Matt Coleman.
Currently operating in Orange and San Diego counties and the Inland Empire division, the foundation and its funding mechanism eventually will be in place nationwide, Coleman says. All the funds stay in the communities where the fees are paid.
The program is an ingenious way for Lennar to address the need for private business and individuals to join with government to help the homeless, says Chris Bender of Housing California, a statewide nonprofit housing advocacy agency.
Bender says the program may be a first, and that as long as buyers know about the fee in advance, they can opt out by choosing to buy a home from another builder.
“If they don't want to buy a home because of that, they don't have to,” he says. “But the way [Lennar's] sales are trending in these markets, people don't seem to mind making that choice.”
FOR MORE INFORMATION ABOUT THE LENNAR CHARITABLE HOUSING FOUNDATION, VISIT OUR WEB SITE AT WWW.BUILDERONLINE.COM, CLICK ON “THE MAGAZINES” TAB, AND THEN CLICK ON “BUILDER ARTICLE LINKS.”
Learn more about markets featured in this article: Los Angeles, CA.