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Executive Summary ~
Inland Equity Community Land Trust was given the opportunity to research community land trusts in the Southwest and make this presentation to the City of Jurupa Valley by the California Community Foundation. This report is a summary of that research prepared for presentation to jurisdictions in the Inland Empire. Interest in the community land trust model has grown in recent years as housing prices have ballooned in the current housing bubble. Community land trusts have the potential to offer permanent affordability in a community. CLTs are also seen as a tool to stabilize housing costs so that community members who work in a community can continue to live in the community.
Table Of Contents ~
Community Land Trust Definition
Community Land Trust History
Community Land Trusts in the Southwest
Forming a Community Land Trust
Community Land Trust Definition ~
Community Land Trust: community housing development organizations not sponsored by a for-profit organization that acquires land and transfers ownership of any improvements on it to the long-term ground-lessees ~ Section 212 of the Housing and Community Development Act of 1992
A community land trust (CLT) is a nonprofit organization that stewards land. Typically, the land is held by the non-profit and the developed structures are available for purchase.
“There could be no such thing as landed property originally. Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue. Whence then, arose the idea of landed property? I answer as before, that when cultivation began the idea of landed property began with it, from the impossibility of separating the improvement made by cultivation from the earth itself, upon which that improvement was made. The value of the improvement so far exceeded the value of the natural earth, at that time, as to absorb it; till, in the end, the common right of all became confounded into the cultivated right of the individual. But there are, nevertheless, distinct species of rights, and will continue to be, so long as the earth endures.” ~ Thomas Paine, Agrarian Justice
Today, there are approximately 277 community land trusts across the United States. By separating the ownership of land and the structures, CLTs can mitigate market factors from causing prices to rise significantly, and insure that structures remain affordable in the community. Community land trusts are used for many types of development, including housing, commercial, agricultural, industrial and retail. In the late 1960’s, New Communities set the precedence of using community land trusts to ensure long-term housing affordability. The idea grows out of the discussion in the 1800’s of how, in the midst of the massive increase in wealth from the industrial revolution, there was so much poverty in wealthy cities. In 1879, Henry George published Progress and Poverty and became a popular and influential public figure in the United States. George argued that the persistent poverty is a result of the ownership of land by a small cadre of landowners. The monopoly of land, in a community, allowed a small group to direct the development and capture for themselves the appreciating value of land. Whenever there is economic progress – new technologies, higher wages, higher profits – landowners simply raise their rents or the selling price of their real estate holdings. This constitutes, in George’s words, “an invisible tax on enterprise, collected by those who contribute nothing themselves to increased productivity. Landlordism is a bane for capital and labor alike.” George’s proposed solution was a tax on land value, which is no longer a radical idea and makes it seem odd, to this author, that he was thrown into jail for promoting it.
Ebenezer Howard, worked for a firm that wrote parliamentary reports in London 1876. He attended a lecture of Henry George’s and read Progress and Poverty. In 1898, Howard published Garden Cities of Tomorrow. Howard proposed planned communities of 32,000 people, ringing major cities and combining the best features of town and country. He proposed that these “Garden Cities” be developed on land that was leased from a municipal corporation, where “men of probity” would serve as “trustees” for the municipally owned land. Eventually, over 30 Garden Cities were developed in England, starting with Letchworth in 1903 and Welwyn in 1920.
Welwyn Garden City, Great Britain, 2017
In the United States, experimental communities structured similarly to Letchworth and Welwyn, were developed as “single-tax colonies,” which combined community ownership of the land and individual ownership of the structural improvements. The first was established in Fairhope, Alabama in 1894 on the eastern shore of Mobile Bay. The Fairhope Single-tax Corporation is still going, with 1800 leaseholds on 4,000 acres. Its landholdings include all of the central business district and about a third of the remainder of the city. The owners of commercial or residential buildings hold a 99-year renewable lease.
In 1929, Ralph Borsodi published This Ugly Civilization, which decried land speculation and landlordism. In 1936, during the Great Depression, Borsodi founded a community that he named the School of Living in Suffern, New York. Thirty families settled there, occupying separate homesteads around a school called “School of Living.” The School of Living taught workshops on gardening and home production. Outside of the United States, land leasing gained a foothold in Australia and Israel. The Australian Parliament created a special governmental district for developing the capital city, Canberra. The land was to be owned forever by the Commonwealth and leased, not sold, to the owners of any buildings constructed thereon. This was done to discourage speculation and to defray the expense of building. In Israel, the Jewish National Fund (JNF) began acquiring land in Palestine in 1901. The JNF executed 99-year leases for the use of its land. Its principal beneficiaries were cooperative agricultural communities, kibbutzim and moshim, developed on lands leased from the JNF. In 1967, when civil rights activists from the United States began looking for ways to promote land reform in the American South, they turned to these agricultural communities as an example.
Kibbutz Nahalal, Israel
Bob Swann, working in partnership with Slater King and C. B. King, two cousins of Martin Luther King, modified the “men of probity” model that eventually made the community a defining feature of the community land trust. What earlier leased-land experiments had lacked, according to Swann, was “broad participation by the town or community.” Swann supplied this missing piece. In his words, “The practice I added was open membership in the corporation bylaws to all people living in the region. Swann served as Youth Secretary for the Fellowship of Reconciliation. The Fellowship of Reconciliation is a global movement founded in 1914 to support the rights of conscience in resistance to war and military conscription. Inspired by the pacifist philosophy and personal example of Mahatma Gandhi, Swann resisted induction into the armed forces just prior to America’s entry into World War II. He was sentenced to five years in prison and, in 1942, entered the federal penitentiary in Ashland, Kentucky. While in prison, Swan read Arthur E. Morgan’s Small Communities. Morgan was the founder of Community Service, Inc. Swann wrote to Morgan while still in prison, asking for work. Morgan offered him a job with Community Services, Inc. Released from Ashland in 1944, Swann moved his family to Yellow Springs. His wife, Marjorie Swann, was also a civil rights activist who had been actively involved with the Congress of Racial Equality (CORE) in Chicago. Throughout the 1950s, Bob and Marjorie became more deeply involved with the peace movement, working mostly with two organizations, Peacemakers and the Committee for NonViolent Action (CNVA). They focused in the beginning on issues of war and peace: organizing teach-ins, marches, and direct action protesting the arms race with Russia, the quarantine of Cuba, and the escalating war in Vietnam. They also did support work for the civil rights movement.
In 1962, he traveled to Mississippi to supervise a Quaker-sponsored, interracial construction crew, helping to re-build black churches that had been firebombed by southern racists. There, Swan met Slater King and C.B. King. Slater King was the owner of a successful real estate and insurance brokerage firm. His older brother, C.B. King was the only African American attorney in southwest Georgia at the time, and one of only three in the state. Both brothers became deeply involved in the civil rights struggle as leaders of the Albany Movement. Thirty miles from Albany, there was Koinonia Farm. Founded in 1942 by the Reverend Clarence Jordan, Koinonia was one of the few communities in the South where black families and white families were actively living, working, and praying together. Because of the race mixing at Koinonia, and because of Jordan’s publicly declared views on racial equality, he and Koinonia’s other residents were excommunicated from the Baptist Church in 1950. Local businesses boycotted the farm into the late 1960s. The Ku Klux Klan fired guns into Koinonia’s buildings and set fire to the farm’s roadside market and threatened increased violence unless Jordan agreed to leave. Bob Swann and Marjorie visited Koinonia Farm several times and helped to establish Friends of Koinonia, a national network to raise money for Koinonia and to market the farm’s pecans and other agricultural products. As the boycott continued to squeeze Koinonia, Slater King helped the farm to sell eggs and produce in the black community in Albany. Koinonia provided Bob Swann and Slater King with a compelling vision of a cooperative agricultural community that had been created, in part, to promote economic self-sufficiency for low-income people, a community supported by a larger network.
Koinonia was the inspiration for New Communities. In August of 1968, Clarence Jordan invited fifteen trusted advisers to meet with him and Millard Fuller to discuss a new direction for Koinonia Farm. Slater King and Bob Swann, who had just returned from a six-week trip to Israel, studying cooperative agricultural communities and ground leasing, were two of these advisors. A planning committee was formed to explore the feasibility of developing a leasehold model of rural development for black farmers. In mid-1969, the bylaws, drafted by C.B. King were approved by the planning committee. The name adopted by the committee was New Communities, Inc., described in the Articles of Incorporation as “a nonprofit organization to hold land in perpetual trust for the permanent use of rural communities.” Slater King was elected president. Fay Bennett was elected secretary. Leonard Smith was elected treasurer. The corporation’s vice president was an African American priest from Louisiana, Albert J. McKnight. Father McKnight, along with Charles Prejean, had represented the Southern Cooperative Development Program and the Federation of Southern Cooperatives on the planning committee. At the time of New Communities’ founding, Father McKnight already had a long history of helping to develop rural cooperatives and credit unions. Bob Swann published The Community Land Trust in 1972. It was the culmination of his experience working with New Communities and also drew lessons from older leased-land communities in the United States and Israel. Several CLTs formed in the decade following the incorporation of New Communities and publication of the book. The Woodland Community Land Trust (WCLT) was founded in 1978 in the Appalachian Mountains of East Tennessee. Sister Lucy Poulin and several other Carmelite sisters formed the Covenant Community Land Trust in Hancock County, Main in 1978 as well.
The Community Land Trust Handbook was published by Rodale Press in 1982. It drew on the experience of newer CLTs like those in Cincinnati, Maine, and Tennessee, while paying homage to New Communities. Although building on the foundation of the earlier book, the CLT Handbook introduced several organizational and operational refinements. The focus was on urban housing and the revitalization of residential neighborhoods, using the CLT to prevent displacement and permanent affordability of owner-occupied housing (and other structures). It would be enforced through a preemptive option and resale formula embedded in the ground lease, which became a defining feature of the CLT model. By prioritizing problems recognized as harmful for constituencies and communities of limited means – including the declining affordability of housing, the deterioration of inner-city neighborhoods, and the displacement of lower-income persons uprooted by market forces and public policies – CLTs gained relevance and acceptance among policymakers and community activists who were struggling to respond to the federal retreat from housing and community development.
The first urban CLT formed in Cincinnati, Ohio and soon after, others began to start up. One of the most famous started as the Burlington Community Land Trust in Burlington, Vermont. The Land Trust was founded in 1984, during a lively period in Burlington’s political and cultural history. Bernie Sanders had just been elected mayor and was encouraging more citizen participation in city programs. Brenda Torpy, then the city’s housing director, brought in John Davis, a staff member with the Institute for Community Economics, as an organizer and consultant. The Institute was disseminating a new CLT model for affordable housing and community development. Burlington Community Land Trust pioneered the 25 percent equity share, where 75 percent of the property’s equity goes to the Land Trust. The land trust uses its share of the to keep the cost of the house low for the next homebuyer. Thus, properties owned by BCLT remain perpetually affordable. Burlington Community Land Trust is the largest CLT in the United States and has merged and rebranded as the Champlain Community Land Trust. By 1990, other CLTs had appeared in Durham, North Carolina, Youngstown, Ohio, Albany and Schenectady, New York, Worcester, Massachusetts and Washington.
Another significant CLT start-up is Dudley Neighbors Inc. (DNI) in Boston. DNI was established in 1989 as a corporate subsidiary of the Dudley Street Neighborhood Initiative (DSNI) for the purpose of acquiring, holding, and developing land for the revitalization of a multi-racial residential neighborhood in Roxbury, a neighborhood in Boston Massachusetts. DNI was fortunate to receive a lot of private foundation funding and public funds. DSNI/DNI was typical of many of the urban CLTs founded in the 1980s and early 1990s in espousing a dual commitment to community empowerment and community development. Its service area was a single, well-defined neighborhood having an historic sociopolitical identity. Its impetus came from the neighborhood’s opposition to a top-down plan for the redevelopment of Roxbury that had been put forward by the City of Boston. When DSNI/DNI later proposed its own comprehensive plan for the neighborhood’s redevelopment, it was the result of a participatory process of organizing and planning that engaged hundreds of community residents over many months. DSNI/DNI, like many emerging CLTs in other cities, viewed affordable housing as only one component of community development, a subset of the CLT’s overall mission of transforming the physical, economic, and political life of its place-based community.
As CLTs started sprouting up in a number of cities, new CLTs were also appearing in rural areas of Massachusetts, Maine, Vermont, New Hampshire, and Washington. In 1992, congressman Sanders had invited Tim McKenzie, director of the Burlington Community Land Trust, to testify before his House Subcommittee. McKenzie’s testimony about the BCLT’s success in creating permanently affordable homes was well-received, convincing Sanders there might be an opening for some sort of federal legislation supportive of the CLT model – especially if it had no budgetary impact. When asked by Sanders for suggestions, McKenzie brought the City of Burlington’s housing director, John Emmeus Davis, into the conversation. After consulting ICE, McKenzie and Davis urged Sanders to propose a statutory definition of the CLT to make it easier for CLTs to receive federal funding and technical assistance under the HOME program. Sanders readily agreed, but then discovered that he had only a few days to get something into the hopper. A one-page definition of the “community land trust” was drafted overnight by McKenzie and Davis, reviewed by ICE, and sent off to Sanders’ office two days later. Their definition was inserted by Sanders into Section 212 of the Housing and Community Development Act of 1992 and approved by Congress.
Community Land Trust (community housing development organizations not sponsored by a for-profit organization that acquires land and transfers ownership of any improvements on it to the long-term ground-lessees) ~ Section 212 of the Housing and Community Development Act of 1992
Community Land Trusts in the Southwest ~
Inland Equity Community Land Trust received grant support from the California Community Foundation for an examination of community land trusts in the Southwest to be able to report back to local jurisdictions on how they function in the nearby communities. Following are the rubrics and comments from the interviews and a consolidated summary. This research is intended to introduce community land trusts as an innovative tool to provide and preserve affordable housing. Inland Equity Community Land Trust is grateful for the opportunity to generate a synthesis of the available literature and examine nearby community land trust. This project will also serve to introduce CLTs as a tool to the City of Jurupa Valley and we hope, in the future, to many other jurisdictions. We examined the housing types, sustainability of CLTs as non-profits, CLT’s financials, reported obstacles faced by the CLTs, property management methods, residence experiences, the number of homes in trust and projected the scalability of CLTs as a tool for creating permanently affordable housing. The intention was to visit each CLT but COVID forced the interviews to be conducted via Zoom. There is growing interest in community land trusts in the State of California as housing costs push more people into homelessness. The community land trusts' promise of permanent affordability and neighborhood stabilization have become very relevant in the current housing crisis.
Of the Southwestern CLTs studied, the aggregate results are that a total of 665 units of affordable housing for residents that are between 50% and 125% of AMI are made available for between $600 - $1,500 by 17 staff of six community land trusts. 157 of the units are owned and 508 of the units are renals. The average unit cost for the owned homes was $268,500. The average operating cost of the community land trusts is $277,893 a year.
Community Land Trust Aggregate Results
San Diego Community Land Trust
Interviewed Tom Scott, Interim Executive Director
San Diego Community Land Trust (SD CLT) was founded in 2006. The land trust received an opportunity to develop sixteen lots on a 5 year option from the City of San Diego in 2008. The land, however, was in a flood area and the city had come into possession as the result of a lawsuit from the homeowners that were there that had lost their homes to a flood. The development of that land required San Diego CLT to hire engineers to design “flood proof homes” which eventually the city did O.K. but by the time the plans were done, the option had expired. The city also had other conditions on the property that made financing very difficult. Eventually SD CLT was able to secure financing from Lift CDFI for 100% of the combined project but this all came in after the option to develop the property expired and the city declined to renew the option. Some time later, SD CLT was offered another piece of property that was very expensive to build on because it was on a steep slope. They started to explore developing on the property and formed a partnership with Habitat for Humanity, who had a lot more financing. That project eventually proved to be too expensive to develop for affordable housing.
Currently SD CLT has no housing but is, in partnership with Habitat for Humanity, building 6 affordable homes in National City. SD CLT and Habitat have entered into a collaboration to provide six 3 bedroom homes that will be made available to low income households. The City of National City will be transferring the site for $1/home. When the homes are completed they will be placed in the SD CLT portfolio for stewardship and to ensure permanent affordability. SD CLT will hold the ground lease and manage the long term affordability of the units. The groundbreaking for the project was in July of 2021. The resources for the project came from the relationship with the San Diego Housing Commission (San Diego’s iteration of a city housing authority), Young Millionaires - Social Capital and Habitat for Humanity. They also are applying for funds from San Diego’s Housing Trust which is funded by an inclusionary zoning ordinance. SD CLT is also exploring nine 3 Bedroom homes in Lemon Grove. SD CLT has assumed this project in the Tentative Map stage and is completing the subdivision process. The homes will be nine 1,500 square foot, 3 bedroom, two bath homes with enclosed two-car garages. The homes are expected to be priced so they will be affordable to families earning from 80% to 120% of the San Diego Area Median Income. Tom Scott, Interim Executive Director of San Diego Community Land Trust said, “it is important to have capital to cover the GAP funding for low income development.” Without the capital the partners don’t take the organization seriously and treat them like an advocacy group.
San Diego Community Land Trust (SB CLT): Rubric
Beverly-Vermont Community Land Trust
Interviewed: Faizah Barlas, Operations Manager
Faizah Barlas oversees the organizational development, property management coordination, and property acquisitions coordination as the Operations Manager at the Beverly-Vermont Community Land Trust (BVCLT). The Beverly-Vermont Community Land Trust started as part of the Los Angeles Eco-Village project. BVCLT properties are located in Koreatown, East Hollywood, and the surrounding neighborhoods. The first building Beverly-Vermont Community Land Trust acquired operates as a co-op that has their own board and governing structure separate from the land trust’s. The co-op leases the land from the land trust. Beverly-Vermont Community Land Trust does not maintain relationships or do property management on the co-op owned building. The County of Los Angeles funded a pilot Community Land Trust Partnership Program for $14 million. The program supported one CLT in each of the county supervisor’s districts. Fideicomiso Comunitario Tierra Libre, T.R.U.S.T South L.A., The Beverly-Vermont Community Land Trust, Liberty Community Land Trust and El Sereno Community Land Trust were all funded with the program and all make up the Los Angeles Community Land Trust Coalition. The County of Los Angeles also adopted the Tenant Opportunity to Purchase Act (TOPA) ordinance that helps facilitate tenants and CLTs purchasing housing in order to preserve affordability and to curb gentrification. TOPA has been used by Beverly-Vermont Community Land Trust to purchase a multi-family property. Ms Barlas recommends that CLT’s use the new state laws to buy at-risk mortgages and add an ADU to the property. This will increase housing stock and reduce gentrification.
BVCLT is working to bring land under community ownership in Koreatown and the greater Los Angeles transit-oriented neighborhoods. In the context of rampant gentrification and displacement, BVCLT prioritizes stabilizing housing for working class, primarily Asian and Latinx, communities by acquiring properties, stewarding land, and being led by tenants and those most impacted by housing injustices. All of the residents of the Beverly-Vermont Community Land Trust, homeowners and renters, are income qualified at 80% AMI. The rental properties have a property tax exemption similar to the State of California’s welfare tax exemption. The mission statement is “Beverly Vermont Community Land Trust is a community-based organization dedicated to providing opportunities for low-to-moderate-income residents to secure housing that is decent, affordable and controlled by the residents on a long-term basis. It is equally dedicated to using land and natural resources to promote the long-term well-being of the community and the environment. Our long-term goal is to ensure continued and expanded long-term affordable resident-controlled housing opportunities for low to moderate income residents, environmental restoration, pedestrian-oriented transportation, recreational green space and sustainable small business.”
Beverly-Vermont Community Land Trust (BVCLT): Rubric
Irvine Community Land Trust
Interviewed: Mark Asturias, Executive Director
Irvine Community Land Trust (ICLT) was started as an initiative by the City of Irvine in 2006. The city created ICLT as the successor agency of their redevelopment settlement. The current 465 units are rentals operated by the developers who pay $150 per unit to ICLT. Some of those units are set aside for low and very low income residents. Irvine Community Land Trust became an independent nonprofit in 2017. The by-laws require two of their board members be from the City of Irvine City Council. The land trust has two employees and the organization “contracts everything.” This year (2022) they are building units for homeownership that will be made available to homeowners at 120% AMI. Their history and experience has positioned them to have a greater say in what they build and who they build for. Orange County has some of the highest housing costs in the country which prices out many formerly middle class workers like teachers and firefighters. Mr Asturias, Executive Director of the ICLT says there is a great need for the missing middle in Orange County which is why he wants to focus on 120% AMI. They also build high quality units and focus on attractive landscaping to remove the stigma of affordable housing. The new units will be townhomes and condos owned by the homeowners in an equity sharing and ground lease agreement with ICLT.
Because the staff is so small the operating costs are less than 10%. The staff focuses on grant applications and grant reporting. The property management, development, bookkeeping and maintenance are contracted out. Developing affordable housing was a challenge because of NIMBYism but it was overcome by inviting the neighboring community and showing them that the development was going to look like the rest of the community and be high quality and well maintained. They had open meetings and had city council members on their board and were able to build support.
The residency requirements of ICLT properties is restricted to only Orgen County residents unless they are veterans. The residents are self-selecting from the community who apply for housing on the ICLT website. They have had over 6,000 people apply and select the income qualified residence by lottery. Many of the residents also receive other social service support and ICLT also contracts with a social service specialist to ensure that residents are receiving the services for which they are qualified.
Irvine Community Land Trust is now focusing on developing units for homeownership in the traditional land trust model. The new condos and townhouses will be offered to Orange County residences who are at 120% AMI. Their experience working with developers has been mixed and resulted in fewer homes for poor people then they had hoped for. The new development will be owned by ICLT and they will have a much larger say in what will be built and for whom. Mr Asturias stressed that the need in Orange County is for moderate income homes as many long time residences are being priced out of the community.
Irvine Community Land Trust: Rubric
Pima County Community Land Trust (PC CLT)
Interviewed: Ms. Maggie Amado Tellez, Executive Director
Pima County Community Land Trust was an initiative of Pima County established in the City of Tucson in 2010. The county used federal Neighborhood Stabilization Funds to purchase and rehabilitate twenty-one rentals. The units are in downtown Tucson and were preserved as affordable housing during a period of rapid growth in the city. In 2012, they became an independent non-profit called the Pima County Housing Center and in 2017, renamed Pima County Community Land Trust. Currently Pima County Community Land Trust has ninety-four homes in the traditional CTL homeownership model and maintains the original twenty-one rental units. They are focused on mitigating gentrification. They are currently building fifteen units on three lots in Tucson. Five units will be for homeownership and ten units will be rentals in two fourplexes and one duplex. These are being funded by General Obligation Bonds and are intended to house residents in the City of Tucson who are being priced out by Wall Street’s housing market squeez. Their mission statement is “Pima County Community Land Trust is a nonprofit, community based organization committed to providing permanently affordable housing for low to moderate income individuals and families, promoting community revitalization in the neighborhoods in which it operates, and to providing ongoing programs and services that help families achieve, preserve, and sustain affordable housing.” The Pima County Community Land Trust has a staff of six people working on property management, housing counseling and non-profit management. They are primarily funded through grants and the lease fees. The revenue from lease fees and other program service fees covers approximately 50% of the total staff expenses. The rest is from rents, foundation grants and shared equity when a land trust property is sold.
All of the residents, homeowners and renters, are income qualified at 80% AMI. The rental properties have a property tax exemption similar to the State of California’s welfare tax exemption. The homeowners pay the regular property tax and a $75 a month ground lease fee. The homeowners are also in an equity sharing agreement which limits their equity to 25% of any market appreciation. The homeowners are selected on a 1st come 1st serve basis. They are qualified on an 80% loan to value and must complete housing counseling. Ms. Tellez stressed that housing counseling is important so people are not set up for failure.
Pima County Community Land Trust: Rubric
Flagstaff Townsite Historic Properties Community Land Trust
Interviewed Duffie Westheimer, Executive Director
The Flagstaff Townsite Historic Properties Community Land Trust (Townsite) started in 2007 in response to the loss of community character in Flagstaff. Townsite is unique in the group of CLTs I have interviewed in that they are focused on historic preservation. They are also unique in that the Executive Director and Board members are all volunteers. They are working to preserve some of the oldest homes in Flagstaff Arizona. They do include affordability for the existing community as a goal. Flagstaff has low wages and a high cost of living so it is difficult for many residents to buy a home and put down roots. One issue that the Townsite CLT is addressing is the possibility of adding a requirement that those who wish to purchase a home within the CLT must work locally (for at least a % of their income). Ms Westheimer says that with the outbreak of COVID, there are people who can now work from home for a distant company and they are moving to Flagstaff, driving up housing costs, “we want people who work here to be able to afford a home here.”
The Flagstaff Townsite Historic Properties Community Land Trust Purchase and Sale Agreement includes landscaping the front yards and restricts remodeling to achieve their historic preservation goals. One ground lease is for four of the houses that also shares a community space and storage building. The "tract" and storage building are owned by Townsite. Homeowners get to use them without additional specific fees. Ms Westheimer stresses that there are financial responsibilities that Townsite CLT has because of the historical preservation commitment. The CLT is responsible for maintenance and maintenance costs. The homeowners pay the property taxes for their lots.
They have four homes that were donated to the trust and then purchased one other in 2011 that is near the others. They have all been restored to match the original historic buildings. The non-profit operates on a 99 year ground lease and equity sharing agreement. They sell the homes at 25% below market rate. They also collect funds ($50 per month) for maintenance and repair that is used to keep the homes in their historic conditions. The homeowner agrees to a once a year home inspection to make sure they are keeping with the historic preservations.
Flagstaff Townsite Historic Properties Community Land Trust: Rubric
T.R.U.S.T. South LA
Interviewed Edgar Campos, Executive Director
T.R.U.S.T. South LA was founded in 2005 under the name Figueroa Corridor Community Land Trust. Before Figueroa Corridor Community Land Trust they were part of an advocacy organization called Community Mosaic. Community Mosaic was working to stop the displacement of people in the neighborhoods south of downtown Los Angeles. Increased property values and rents have pushed out many long-term residents in Los Angeles. T.R.U.S.T. received a $10 million dollar grant from the City of Los Angeles as part of a Community Benefits Agreement when the University of Southern California developed property on Figueroa Street in a historic Chicano community. The University of Southern California expansion and a light rail transit development have driven up real estate prices and rents. The long term low income neighborhood residents were being threatened with gentrification.
T.R.U.S.T. seeks to bring community controlled and community serving development to neighborhoods south of Martin Luther King. T.R.U.S.T. is focusing on acquisition and restoration of older buildings in Los Angeles. They have five units and are in the process of rehabilitating one duplex and one fourplex. The focus of T.R.U.S.T. South LA is to preserve the existing neighborhood and resist displacement. Edgar Campos, Executive Director of T.R.U.S.T. South LA, says that residential displacement and establishing community control over economic resources is the goal of the land trust. Equity raised by T.R.U.S.T. leverages loans from CDFIs and private lenders, and partnerships with affordable housing developers to support acquisition, rehabilitation, preservation and construction. T.R.U.S.T. also wants to include space for community uses such as parks and gardens, health clinics, neighborhood-serving retail and community centers.
T.R.U.S.T. South LA: Rubrict
Forming a Community Land Trust ~
The community land trusts in the Southwest, with the exception of Townsite in Flagstaff, are formed with the intention to create and steward permanently affordable housing. Most explicitly include an element of community control and ownership of the land to resist displacement of existing communities. CLTs allow residents to retain a stake in gentrifying areas of a community. The CLTs with housing in the Southwest are either municipal initiatives, like Irvine CLT and Pima County CLT, or they are part of the Los Angeles Community Land Trust Network (LACLTN).
The Los Angeles Community Land Trust Network was a Los Angeles County funded effort that seeded a community land trust in each of the country's supervisorial districts. The Los Angeles Community Land Trust Coalition is composed of five Community Land Trusts from across LA County. These include: Beverly-Vermont CLT, El Sereno CLT, T.R.U.S.T. South LA, Fideicomiso Comuntario Tierra Libre and Liberty Community Land Trust.
Los Angeles County and LA CLT Coalition have been working together for several years. In 2020, the county allocated $17 million to expand the work of the CLTs in L.A. County. The California Housing Partnership’s 2020 Los Angeles County Affordable Housing Outcomes Report found that 11% of the more than 4,000 affordable family homes in L.A. County at risk of conversion to market are located in areas identified by the state as “High Resource” or “Highest Resource.” The report indicates “these affordable homes would be particularly difficult and costly to replace and losing them would worsen access to opportunity-rich neighborhoods for low-income families in the County.” The L.A. County Board of Supervisors directed the CEO to establish a funding priority for high resource areas at risk of displacement for the County’s Affordable Housing Acquisition Fund. For FY 2020-21, L.A. County allocated $17.2 million to the Affordable Housing Acquisition Fund, fully funded with Net County Cost. They also develop a process to help secure tax-defaulted properties through Chapter 8 Agreement Sales for CLTs to create long-term affordable housing. The county also has instructed the departments to establish a Pilot Community Land Trust Partnership Program and solicit partnerships with CLTs and nonprofits to utilize the process. The LA CLT Coalition currently consists of five CLTs operating throughout L.A. County, serving all five Supervisorial Districts. The five existing CLT's in the County are: El Sereno CLT; Fideicomiso Comunitario Tierra Libre; Liberty CLT; Beverly Vermont CLT; and T.R.U.S.T. South LA LA CLT Coalition. The LA CLT Coalition is expanding to include emergent CLTs from throughout the County. T.R.U.S.T. also received a $10 million dollar grant from the City of Los Angeles as part of a Community Benefits Agreement when the University of Southern California developed property on Figueroa Street in a historic Chicano community. The Los Angeles County effort is also partnering with Strong, Prosperous, And Resilient Communities Challenge (SPARCC), a national funders collaborative, which is preparing to provide the LA CLT Coalition with a grant that will fund deposits and pay for due diligence costs. Moreover, the program will be administered by a Community Development Financial Institution, Genesis LA.
The Irvine Community Land Trust started as an initiative of the City of Irvine. The city created ICLT as the successor agency of their redevelopment settlement. The by-laws require two of their board members be from the City of Irvine City Council. Orange County has some of the highest housing costs in the country which prices out many formerly middle class workers like teachers and firefighters.
Pima County Community Land Trust was an initiative of Pima County Arizona. The county used federal Neighborhood Stabilization Funds to purchase and rehabilitate twenty-one rentals.
There are several methods through which local governments can help form CLTs. The most common types of development assistance with municipally-owned lands and buildings. Municipalities subsidized the development of CLT projects by making their own inventory of lands and buildings available by either donating them or selling them at a discounted price. These properties have included “surplus” lands or decommissioned airports,
firehouses, and other public facilities. Cities also transfer or sell tax fore-closure or blighted properties for redevelopment. The City of Boston donated roughly 30 acres of previously blighted and abandoned property to the CLT affiliated with the Dudley Street Neighborhood Initiative. This land donation allowed the development of 155 units of affordable housing, accompanied by the rehabilitation of a commercial building and the provision of public open spaces.
Many jurisdictions offer support to community land trusts because municipal officials are looking for more effective ways of using affordable housing resources. The City of Chicago, for example, with the support of the MacArthur Foundation, has recently established a community land trust to act as the steward of affordability for hundreds of units of municipally subsidized, owner-occupied housing throughout the city. The affordability covenants are expiring. With funding provided by county and city governments, a countywide CLT in Sarasota, FL, has committed itself to producing 3,000 resale-restricted, owner-occupied homes over the next ten years.
Many jurisdictions have provided grants directly to a CLT or deferred and eventually forgivable loans. In either case, the municipality will generally not expect the funds to be repaid unless the CLT runs into problems with the project. Development loans from local government agencies are generally made interest free. Sometimes, even these development loans function exactly like grants. The primary difference is that, in the event that the CLT were to fail to comply with the conditions of its loan agreement, a municipality with a loan rather than a grant may have more options for enforcement. However, because it is recorded on title, the loan can complicate the homebuyer financing and require significantly more up front legal work to implement. Both loans and grants are governed by a legal document that clearly states the eligible uses of the subsidy funds and this grant or loan agreement will often describe specific development standards which must be met, hiring and wage requirements, initial affordability requirements, and other conditions such as fair housing requirements. When providing project support to a CLT, a municipality often requires the organization to make a long-term commitment to monitoring and enforcing provisions in its own ground lease regarding the owner occupancy, maintenance, and affordability of the home.
Some jurisdictions that have Inclusionary Zoning ordinances (require private developers to include an affordable housing component in newly constructed market-rate developments) are choosing to assign long-term responsibility for managing the resale and preserving the affordability of the affordable units to community land trusts. The CLT becomes the long-term steward of these housing resources. Jurisdictions also assist with affordability by offering CLTs reductions or waivers of application fees, impact fees, waiver or relaxation of zoning requirements like parking or lot coverage and allowances for greater density.
Development support is important but community land trusts also require operational support. Some jurisdictions do occasionally offer some operational support when a CLT is charged with the long-term stewardship of property the CLT acquires with a jurisdiction's assistance.
For profit businesses reach an optimal growth rate when increasing revenues would require significant increases in costs. Scaling-up is the proportional growth required to get to this size. CLTs cover their operating expenses via earned income after they have scaled up to a threshold of a number of homes. The revenue from lease fees, membership dues, resale fees, etc. paid by the owners becomes large enough to cover the CLT staff salaries. This is called reaching the “sustainability threshold.” The “sustainability threshold” is said to be around 120 units, but it depends on the fee structure of the CLT, its operational costs, and its resale formulas.
A CLT may suspend project development for a period of time, awaiting new opportunities and additional subsidies, but a CLT can never stop managing its lands, monitoring its leases, or enforcing the use and resale controls. Community land trusts generate the majority of their operating revenue through earned income rather than through external grants, when they are mature. Regardless of the organization’s age or size, however, nearly every CLT looks to local jurisdictions for a portion of the operating support. A majority of the nation’s 200 CLTs are both young and small, still in the phase of early growth. A number of older CLTs, however, have reached a scale where the organization is less dependent on operating grants. As the number of units grows, CLTs are able to rely increasingly on lease fees, membership fees, resale fees and other internally-generated revenue. A community land trust is likely able to receive sufficient income from internally-generated revenues to be able to cover the cost of stewardship responsibilities when they have approximately 120 units in their portfolio. Most of the CLTs in the Southwest are well below this threshold. Regular operating support from a local jurisdiction is extremely valuable, especially for a young CLT without internally generated revenues. Operational funding that a CLT can count on receiving over a multi-year period can help the CLT to secure additional funding from other public and private sources.
Permanent Affordability ~
Housing priced at HUD’s 30% of income threshold for “housing cost burdened” would be a rare treat to most people who live in California. The economic benefits are apparent. Having a home that is a refuge and not a cost burden would have many health and social benefits. There is a wealth of research to draw from that demonstrates this, I would recommend the studies done in association with the Whole Person Care pilots launched by the State of California. Preservation of the affordability of single-family homes leads to wealth creation through affordable homeownership for families with lower incomes. Housing stability for very low-income renters leads to fewer evictions. Affordable housing and housing stability is a substantial social determinant of a person's health. Among other factors, like income and education, housing is a component that drastically influences a person's physical and mental well-being. Poverty severely limits people's options, which is why poverty is linked to a vast range of health problems, both acute and chronic in nature. Rent is the most significant and most crucial expense each month for very low-income households. When residents can afford their housing and make their rent payments, they are able to spend more on local purchases—and go beyond the bare necessities to buy healthy food, have better access to healthcare, and spend more at their nearby businesses.
One of the primary benefits of a community land trust’s shared equity homeownership is the opportunity for the homeowner to build wealth, while at the same time the community maintains affordable housing for its residents. Instead of a grant or a loan to an individual or a developer, jurisdictions can use a one-time subsidy to permanently lower the cost of the home. The model balances wealth building for families who would otherwise be unable to afford owning a home, while tying the subsidy to the property. Permanently affordable homeownership also advances racial and economic justice by ensuring that affordable homes ultimately remain in neighborhoods that are experiencing gentrification, or are rich in community assets. CLTs typically use a ground lease, resale restrictions and equity sharing agreements to preserve the subsidy. Homeowners that buy homes in a CLT very rarely default or go into foreclosure. They build significant wealth compared to the other investment opportunities that would have been available to them as renters. Homeownership is increasingly out of reach of the community members who have grown up in the community. Community land trusts’ ground lease lays out the mutual responsibilities of the CLT and the homeowner, legally ensuring that both will upkeep their commitment to permanent affordability for low-income people.
Larger investments in housing from the state of California and the federal government have provided some subsidies for developing housing and the looming threat of mass evictions has made housing in general an issue that local jurisdictions are more willing to address. The federal government’s American Recovery Act funding targets infrastructure projects and some short term relief but jurisdictions have a great deal of leeway on how to invest it so it won't necessarily be directed to housing. The underlying issue of stagnant wages and skyrocketing housing costs remains. Jurisdictions need to develop solutions that preserve their investment in affordable housing. CLTs are demonstrating the capacity to do that.
There are several strategies a jurisdiction can use to subsidize affordable homes. Strategis
range from subsidy forgiveness, subsidy recapture to subsidy retention. Subsidy forgiveness is one-time assistance to a homeowner with no expectation of future reuse of that amount. This is essentially a one-time grant to a qualified home buyer, and is best applied when funds are ample, or to incentivize homeownership in a blighted or challenged neighborhood, or even to create wealth for the individual home buyer. Subsidy recapture is structured so that part or all of the subsidy is recaptured by the program for future use. Market increases in home prices require new resources in addition to the recaptured funds to assist future home buyers. Some jurisdictions employ subsidy recapture for down payment assistance by placing a lien on the property, requiring the amount equal to the down payment assistance be repaid to the City upon sale of the home. Creating lasting affordability through subsidy retention is accomplished by lowering the initial purchase price of a home to an affordable level, rather than providing assistance directly to a qualifying household. Lowering the purchase price to an affordable price requires a subsidy to be attached to the home and not the person. To do this, CLTs use deed restrictions, CLT ground leases and equity sharing. These restrictions on the use and occupancy of the home and resale restrictions allow the home to remain affordable to future homeowners. Resale restrictions allow the affordability created by the initial investment of subsidy resources to remain with the home. The homeowner accumulates wealth at some level as determined by the inicial resale formula. Subsequent homeowners are able to purchase the home at a more affordable price without requiring additional subsidies.
Many California jurisdictions are exploring local and regional partnerships, housing trusts and CLTs to undertake some of the stewardship and other responsibilities associated with equity sharing agreements on publicly subsidized affordable homes. The California Department of Housing & Community Development (HCD) is providing Regional Early Action Planning (REAP) funding to Southern California Association of Governments (SCAG). SCAG is partnering with local jurisdictions to use these resources to create a Regional Housing Trust Fund. They are working to combine sources of public and private funding, parameters for funding, use and goals of a trust fund including levels of housing affordability/types of housing to target, and approve a long-term operational model and financing plan for a sustainable trust fund.
Community Land Trusts are working with local housing authorities to use the Housing Choice Vouchers to subsidize rent-to-own to help low income people become homeowners. The residents can have the opportunity to own their homes in the Land Trust. Typically the vouchers go to the landlord but a CLT can tie the voucher subsidy to an equity sharing agreement with the resident. An income qualified resident will be able to buy into a CLT and be able to pass on the home to their children. If they sell the house, they will keep the equity they paid in and the equity from the Housing Choice voucher will stay with the home.
510(c)(3) charitable organizations can generally leverage public sector investment with private tax-deductible contributions. In a national survey of Community Land Trusts conducted by the Lincoln Institute in 2006, half of the 119 respondents reported receiving private donations. Foundation grants are the lion’s share of the private contributions to CLTs. Community foundations, family foundations, and larger grantmaking foundations with an interest in affordable housing are frequent CLT contributors. The California Community Foundation, for example, recognized how rapidly rising land costs were eroding its ability to support affordable housing in the Los Angeles region and founded the Community Foundation Land Trust. Its contribution of $3.8 million can be used for operations and initial projects in the Los Angeles region.
Some Community Land Trusts direct ongoing fundraising efforts at the local community. Although time-consuming, these programs can generate some revenue and build important community goodwill. In fact, some small Community Land Trusts, such as the Community Land Trust Association of West Marin (CLAM) in Point Reyes Station, raise the majority of their annual operating budgets from individual donations.
The majority of Community Land Trusts collect fees for each unit of affordable housing they help to develop. Development fees may be structured as a flat amount per unit or as a percentage of total development costs. The City of Madison, for example, allows the Madison Area CLT to take a developer fee of up to 15 percent of a project’s total costs.
A community land lrust’s ground lease fees are its most reliable revenue source. While a few CLTs now charge as much as $150 per month, these fees tend to be in the $25–50 range. Even at this low price, however, with multiple properties in the portfolios can realize significant operating revenues from this source. Thistle Community Housing in Boulder, Colorado, for example, reports that ground lease fees averaging $30 a month on its 211 resale-restricted, owner-occupied units cover almost a third of the cost of running the program. CLTs also collect fees when units change hands, using these revenues to defray the costs of managing the transfer. In some cases, the fee is charged to the sellers, reducing their proceeds in the same way a broker’s commission would. In other cases, the fee is added to the resale price, increasing the cost of the home to the next buyer.
CLTs also can collect membership dues from area residents who support the community land trust model. With more than 4,000 members, the Champlain Housing Trust in Burlington collects over $70,000 in membership fees annually, covering about 5 percent of their operating budget. Some Community Land Trusts earn fees for performing specific services such as educating prospective homebuyers, packaging loans for local mortgage lenders, and monitoring local inclusionary housing units on behalf of a city or county.
- Hud Section 108 Loan Guarantee Program
- The Section 108 Loan Guarantee Program (Section 108) provides Community Development Block Grant (CDBG) recipients with the ability to leverage their annual grant allocation to access low-cost, flexible financing for economic development, housing, public facility, and infrastructure projects.
- Community Development Block Grant (CDBG)
California State Funding for Housing:
- California’s Proposition 1 authorized $4 billion in general obligation bonds for housing-related programs, loans, grants, and projects and housing loans for veterans. The measure was designed to distribute the bond revenue as follows:
- $300 million for the Local Housing Trust Matching Grant Program, which offers matching grants to local housing trust funds for "pilot programs to demonstrate innovative, cost-saving approaches to creating or preserving affordable housing;" and
- $300 million for the Self-Help Housing Fund, which provides forgivable loans for mortgage assistance, the development of multiple home ownership units, and manufactured homes.
- California Enterprise Development Authority CEDA 501(c)(3) Loan
- 501(c)(3) revenue bond financing facilitates land and building acquisition, building construction, and refinancing of prior debt (for eligible capital projects). Benefits of this type of financing include below market interest rates, long-term financing, and it is available statewide without limitations to specific areas or communities.
County and local funding
- Community Revitalization & Investment Authorities (CRIAs)
- Housing, transit stations, sewage and water facilities, high speed rail, civic stations, public parks, waste disposal sites, parking facilities, flood/drainage projects, child care facilities, ports/harbors, libraries, bridges, childcare facilities, TOD projects, community recreational facilities.
- Enhanced Infrastructure Financing Districts (EIFDs)
- Transit stations, sewage and water facilities, public parks, waste disposal sites, parking facilities, flood/drainage projects, childcare facilities, ports/harbors, libraries, bridges, affordable housing, TOD projects, community recreational facilities.
- The Community Facility Districts (CFD) and Assessment Districts (AD) Administration assists in the establishment of Mello-Roos Community Facilities Districts and Assessment Districts within Riverside County unincorporated areas.
- County issued Single Family Mortgage Revenue Bonds
- County issued Multi-Family Mortgage Revenue Bonds
Private Foundation Funding Housing in Southern California:
Private foundations don’t typically fund capital projects but they do provide support for technical assistance and operations.
- The H.N. and Frances C. Berger Foundation
- Annenberg Foundation
- Coeta and Donald Barker Foundation
- Max and Victoria Dreyfus Foundation
- John Jewett & H. Chandler Garland Foundation
- Gannett Foundation
- J.B. and Emily Van Nuys Foundation
- Kresge Foundation
- Butler Family Fund
- California Community Foundation
- Conrad N. Hilton Foundation
- Parsons Foundation
Source Documents ~
Community Land Trusts: A Guide For Local Governments https://www.nlc.org/wp-content/uploads/2021/08/Community-Land-Trusts_A-Guide-for-Local-Governments_Report-1.pdf
Origins and Evolution of the Community Land Trust in the United States https://community-wealth.org/sites/clone.community-wealth.org/files/downloads/report-davis14.pdf
Creating Opportunities for Building Equity Beyond Chapter 8 Properties: Expanding the Pilot Community Land Trust Partnership Program: http://file.lacounty.gov/SDSInter/bos/supdocs/150370.pdf
Community Land Trust Homeowners: Past and Present Housing Experiences September 2014 Journal of Family and Consumer Sciences
Community Land Trust Technical Manual: https://groundedsolutions.org/tools-forsuccess/resource-library/community-land-trust-technical-manual
Davis, J.E, Demetrowitz, A. (2003) Permanently Affordable Homeownership - Does the Community Land Trust Deliver on Its Promises? A Performance Evaluation of the CLT Model Using Resale Data from the Burlington Community Land Trust. Burlington Community Land Trust.
Grounded Solutions Network’s Website: https://groundedsolutions.org/strengtheningneighborhoods
Grounded Solutions Network, Inclusionary Housing: https://InclusionaryHousing.org
Kelly, James J., Homes Affordable For Good: Covenants and Ground Leases as Long-Term Resale-Restriction Devices, 29 St. Louis U. Pub. L. Rev. 9 (2009-2010) Local Housing Solutions. (2018). Retrieved from https://www.localhousingsolutions.org/act/housing-policy-library/deed-restricted-homeownership-overview/deed-restricted-homeownership
CBRE Group, Inc. Inland Empire Multifamily Market View
US Census San Bernardino County Quick Facts
US Census Riverside County Quick Facts
New Home Source