Sustainable, affordable properties— Land trust for the long haul
- Published: December 2, 2010
This is the fourth in a series of articles looking at various aspects of affordable housing in Yellow Springs.
While legally, the property beneath Cathleen Tong’s home on Xenia Avenue is leased rather than owned, it feels to her like her own land.
“This is my yard, my trees, my flowers. I built a little shed,” she said recently. “I don’t feel that I’m leasing the land. I feel I can do what I want.”
The land is officially leased because Tong’s home was built by Home, Inc., using the community land trust model. In that model, the homeowner owns the home, leasing the land underneath for up to 99 years with an option to renew, while Home, Inc., continues to own the property. While the arrangement is officially called a 99-year renewable lease, the state of Ohio views it as “tantamount to ownership,” according to Home, Inc. Executive Director Marianne MacQueen.
The community land trust model was chosen by those on the 1995 Village Council task force charged with addressing the local need for affordable housing because, “It’s a sustainable model. When a house turns over, it remains affordable,” according to Ilse Tebbetts, a member of that task force. “We were not intending to provide housing for particular individuals, but to provide starter affordable homes for the community.”
That task force ended up creating Home, Inc., a nonprofit community land trust organization, which has since 1999 either constructed or rehabbed 14 affordable homes in the village.
Like some other affordable housing models, a Home, Inc. home is sold at less than market price, subsidized by Home, Inc. for an average of $20,000 to $60,000. For instance, the two homes in the organization’s new Davis Street project will cost about $175,000 to build, but will sell to income-qualified buyers for about $115,000, MacQueen said. Because that $60,000 subsidy stays with the home, which, if resold, must be priced considerably below market price, the home remains affordable.
“The people who started Home, Inc. felt the value of the subsidy in the house should stay with the house, and that’s what the community land trust does,” she said, adding that permanent affordability is “unique to the CLT model.”
Other affordable housing models feature an “affordability period,” of five to 15 years, during which the homeowner is restricted from selling the home at market price, MacQueen said. However, after that period has passed, the homeowner can seek market price for the home, thus reaping the whole value of the initial subsidy in the home.
When those formerly-affordable homes are then sold at market price, the municipality needs to create new affordable housing to fill in the gap. Thus, those models work best in municipalities that have large stocks of housing, which Yellow Springs, with its green space and clear boundaries, does not.
“With those models, to keep having affordable housing stock you have to keep building more,” MacQueen said. “In Yellow Springs, the land is limited.”
Using the community land trust model, Home, Inc. owners agree that should they sell their home, they can receive the cost they put into the home plus 25 percent of any appreciation since the home was built, with the remaining appreciation helping to reduce the purchase price for the next buyer. In return for that restriction, they receive the home they live in, plus the support of Home, Inc. throughout the buying and homeowner process.
For instance, Home, Inc., like other land trust organizations, works with the prospective buyers to secure financing before the home is purchased, and continues to support them in a variety of ways, such as alerting them to appropriate educational events.
“We always try to figure out ways to make the process as empowering as possible and to help out the homeowners,” according to Home, Inc. Program Manager Emily Seibel.
That supportive CLT/homeowner relationship reaps benefits that are clear in this troubled economy, according to Seibel, as the rate of CLT foreclosures is far below that of the country at large. For instance, in the nation’s largest CLT, the Champlain Housing Trust in Vermont, nine homes out of 424 units have been foreclosed during its 24-year existence. In Yellow Springs, there have been no foreclosures in Home, Inc.’s 14 properties.
The CLT model balances the needs of homeowners with the needs of the community, according to MacQueen.
“At base the idea is the land is more than a commodity to be bought and sold,” MacQueen said. “It’s the idea that the community has the right to make sure land is used for community purposes. The CLT is the steward for the community.”
Some critics of the land trust model argue that CLT homeowners are not being treated fairly because they cannot reap the total benefits of their home’s appreciation. However, that line of argument doesn’t make sense to homeowner Cathleen Tong.
“I wasn’t forced to buy the house. It felt more like a blessing, because now I’m able to own a home in Yellow Springs,” she said. A teacher in the Dayton Public School system, Tong rented for five years in town, but said she wouldn’t have been able to buy without the assistance of Home, Inc.
Owning the home gives herself and her son, Cayden, a feeling of stability, Tong said.
“It feels good that it’s ours,” she said. “It definitely feels different than renting.”
Tong is grateful that her son, when he grows up, will have the option of possibly living in the home himself.
“If Cayden wants to stay in Yellow Springs, he’ll have this to fall back on, a safety net,” she said.
She feels fine about the restrictions on reselling her home, because she believes it’s important that those of moderate income like herself have the opportunity to live in the village.
“When I do sell, it’s like giving a gift to someone else,” she said. “It’s like paying it forward.”
The community land trust model is the one envisioned by Village Council members Judith Hempfling and Lori Askeland in their recent proposal for a Village-sponsored affordable housing project on Cemetery Street. Last month Council approved the first step of the project, which is developing a plan, in conjunction with Home, Inc., for the construction of four small single-family homes on the site.
She and Askeland chose the land trust model because it’s the one that keeps land permanently affordable, Hempfling said in a recent interview.
“Why keep building affordable housing that is no longer affordable after 10 years?” she said.
While on Council, Hempfling has repeatedly emphasized the need for the Village to take proactive steps in creating affordable housing, as statistics show that, as housing prices have risen, the village is losing racial and age diversity.
“Personally, I don’t want to live in a homogenous community, in a country that’s becoming more diverse,” she said.
As a registered nurse, Hempfling also feels grateful to have broken into the housing market years ago in western Massachusetts, a situation that enabled her to enter the housing market when she moved to Yellow Springs. Many of her colleagues at her former job at Friends Care Community could not afford to live in the village, she said.
The community land trust model has significant ties to the Yellow Springs community, since historic Antioch College President Arthur Morgan was one of the visionaries of the CLT movement. Morgan, who created two land trust communities, in Tennessee and North Carolina, along with the Vale in Yellow Springs, explored the concept in his book, The Small Community: Foundation of a Democratic Life.
Morgan’s ideas were further refined by Bob Swann, who, after working for Morgan’s Community Service organization in Yellow Springs in 1944, went on to create New Communities, Inc., with Slater King, the cousin of Dr. Martin Luther King Jr. That organization, which eventually held 6,000 acres in the rural south, became the largest tract of black-owned land in the country at the time.
The community land trust model is not the most-used model of affordable housing in the country, according to MacQueen, who cited one model that allows federal tax credits for businesses that subsidize housing and another model that provides soft second mortages as a subsidy which is typically repaid within five to 15 years. However, she said, the CLT model is becoming more popular, with about 250 land trusts operating currently across the nation, as more municipalities see the advantages of creating permanent affordable housing.