A Model for All Markets?

In the past decade, community land trusts and other shared equity housing models have gained wider acknowledgement and acceptance as a means of creating and preserving affordable housing in communities with high property values. But by cultivating the long-term success of homeowners, these models are also bringing revitalization and stability to areas with weak markets and high foreclosures.

While potential benefits of community land trusts (CLTs) are vast, most that are community-based focus on creating, and preserving the affordability of owner-occupied housing. To do this, CLTs sell homes on land they continue to own, reducing the prices of the homes significantly, and enter into long-term leases for the land with the homebuyers. Resale restrictions in the leases limit the prices the homes can be resold for and ensure the homes will be resold exclusively to income-eligible households. This affordable housing model creates a stock of permanently affordable homes that remain affordable even when resold, with no additional investment required.

Traditionally, CLT housing is considered a way to maintain affordability in hot or rising markets. CLTs also provide benefits via affordable homeownership to communities with lower property values, but these benefits are somewhat less widely acknowledged or accepted. Given the present realities of housing markets throughout the country and corresponding national efforts like the Neighborhood Stabilization Program (NSP), it is an appropriate time to focus on the positive impact a CLT can have in communities with lower property values and on the ways CLTs are using NSP funds to stabilize neighborhoods affected by the foreclosure crisis.

Why More Homes?

“Why are you here?” the Lincoln Park neighborhood representative asked from across the table.

“Why would I want land trust homes in my neighborhood when there are already too many low-income people living there?” he asked further. The room grew quiet as all present waited for the answer.

It was fall of 1999, and Northern Communities Land Trust (NCLT) had been asked by Pam Kramer, program director for the Duluth Local Initiatives Support Corporation (LISC), to come to a meeting of the At Home in Duluth collaborative — a group of nonprofit and government agencies and neighborhood representatives working together to try to bring investment into four of the poorest neighborhoods of Duluth, Minnesota. NCLT had recently forged an agreement with one of the collaborative members, a neighborhood group in West Duluth, to build two new homes in a revitalization focus area. However, it was now quite clear that at least one of the four neighborhoods represented had strong reservations regarding NCLT’s participation in the collaborative.

His animosity was not hard to understand. Most of the homes on the market in the Lincoln Park neighborhood were relatively affordable at the time. Over the past 15 years, he had witnessed a steady out-migration of neighbors who owned and invested in their homes. He had seen homes and yards previously cared for by their owners who lived in them deteriorate while the new absentee owners squeezed every dollar out of them. He was tired of seeing the relative value of property in his neighborhood decline. He had become convinced that affordable housing of any kind was the last thing his neighborhood needed and could not be part of a successful revitalization strategy. Since community land trust homes are by design affordable at initial sale and remain affordable at each subsequent resale, it followed logically that he would be doubly dubious about any strategies that included CLT homes.

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