Commentary: Community Land Trust as a Way Forward on Affordability?

Photo appeared in the Urbanist

By David M. Greenwald
Executive Editor

PBS Newshour’s Ivette Feliciano hosted a segment over the weekend putting forth the idea of a seldom-used housing model that seems to be gaining some steam across the nation—the community land trust.

The idea involves homes being purchased by a nonprofit trust that then sells the homes to low and middle-income buyers at below-market rates.

“Community land trusts are often supported from a variety of sources, including federal funding, property donations from local governments, as well as individuals,” Feliciano reported.  “In the U.S., nearly 300 communities—two dozen in California—are using land trusts to create and preserve affordable housing, especially in urban areas where housing costs are high.”

The idea originated with the Oakland Community Land Trust, which formed in the aftermath of the foreclosure crisis in 2007-08.

Steve King, Executive Director of the Land Trust explained, “The crisis was particularly acute in Oakland, and very specifically in what we call the flatland neighborhoods of Oakland, which are the predominant lower income neighborhoods and historic black and brown neighborhoods in the city. There were 13,000 foreclosures in the city. That equates to roughly one in five owner occupied homes. So two out of every 10 homeowners went through foreclosure and lost their homes.”

Oakland CLT used federal funds to rehabilitate a group of 16 vacant foreclosed single-family homes, sold them at below market value to residents making less than 80 percent of area median income.

The homes came with deed restrictions that “required that any resale of the homes be subject to the same income restrictions, effectively taking the property off the speculative housing market.”

This model has been put into action helping people in danger of being displaced due to huge rent increases.

In 2018, “With the help of the tenant advocacy group Alliance for Californians for Community Empowerment, (Norma) Sanchez organized seven other neighbors who also had huge rent increases from the same landlord.”

Oakland CLT purchased three of the homes, allowing Sanchez and two other families stay in the neighborhood.

Feliciano reports that in 2017, residents of a 40 unit building in San Francisco’s Tenderloin district were facing huge rent increases. The building was not under rent control.

“After protesting the rent increases, tenants are now working with the San Francisco Community Land Trust to purchase the building. They have raised $1.4 million in equity and are now crowdfunding part of the purchase. The goal is to turn the building into a housing cooperative, giving tenants an opportunity to have ownership stake,” Feliciano reported.

Senator Nancy Skinner authored SB 1079 last year, which was passed into law.

The bill ends the practice of bulk buying of homes at foreclosure auctions in the hopes of maximizing owner-occupant home ownership in California.

“What they would do is go to the foreclosure auction, which allows you to buy multiple homes in a single bid. You have to pay cash. So who else can compete?” Senator Skinner explained.  “After that foreclosure crisis, we saw the lowest number of homeowners in our black community in our Latinx community drop down to numbers like that we hadn’t seen since the 1970s.”

She explained, “Now every home has to be bid on separately. You could still have an auction with 50 homes, but each bid has to be separate.”

But, importantly, Feliciano reported, “The bill also gives tenants a 45-day window to get financing to purchase their building with the help of a nonprofit, such as a community land trust.”

Senator Skinner also “led efforts to designate funding in the latest state budget for a newly-formed Foreclosure Intervention Housing Preservation Program.”

She said, “So we were able to secure $500 million to help fund foreclosed homeowners, renters, land trusts so that they could compete in those auction bids and try to buy foreclosed homes.”

This model becomes a way for community members to create more affordable housing, and prevent speculative buying up of foreclosed homes by large pocketed-companies that we are seeing across the state.

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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12 Comments

  1. Matt Williams

    I too saw that PBS Newshour Weekend report.  I thought it was very promising.

    The segment before it that discussed recently banned booksa was very interesting too.

  2. Bill Marshall

    David… are you advocating that we should not be resisting foreclosures (by governmental action), in order to generate affordable housing (acquired and marketed by governmental action)?

  3. Alan Miller

    This is somewhat promising a model, but . . .

    The homes came with deed restrictions that “required that any resale of the homes be subject to the same income restrictions, effectively taking the property off the speculative housing market.”

    Can and will that be enforced?  Wasn’t there some ‘scandal’ here in Davis where homes were bought as affordable and sold at a profit because there was no enforcement mechanism?  Anytime the market is warped, people find a way to profit from it, illegally or semi-legally.

    Also, I was confused by . . .

    “What they would do is go to the foreclosure auction, which allows you to buy multiple homes in a single bid. You have to pay cash. So who else can compete?”

    Was there any antecedent to explain who is being referred to as the ‘who else’ here?  I can’t find it and it seems to jump to this without explanation.

  4. Edgar Wai

    What is the rationale behind CLT properties being resellable (with deed restriction) as opposed to them simply being review/reassigned periodically based on needs?

  5. Jim Frame

    When a CLT buys a house at market and resells it below market it’s burying scarce capital, all the more so if the only available homes it can buy are larger and/or fancier than is needed for workforce/affordable housing.  I’d rather marry the CLT idea to Keith’s concept of a state subsidy for creating new workforce/affordable housing projects, where the CLT partners with the state and city to create the new projects.

  6. Richard_McCann

    The problem is these deed restrictions is that it removes the single most important means of building household wealth in this country. The difference in home values explains most of the discrepancy between Black and white households, where whites have about 10 times the amount of wealth.

    1. Ron Oertel

      I don’t know if those statistics are accurate, but it certainly is dependent upon which area of the country that one is referring to. I believe there’s a pretty high percentage of black ownership in the Atlanta area, for example.

      In any case, isn’t “wealth building” via rising housing prices the problem (for those at the bottom) in the first place?  Regardless of skin color?

      Is that the goal?

      Seems to me that the primary reason for housing is to provide people with a place to live. And it still is that way, in many places.

      By the way, why is this argument always framed in “black vs. white”? Are there no Asians in the world? Hispanics? Native Americans?

      From what I’ve seen, San Francisco (for example) has a pretty good percentage of homes owned by Asians (for those keeping score).

        1. Alan Miller

          No, now the goal is to buy houses well-below-market-rate for a tiny, lucky group of ‘low income’ people who win the housing lottery and allow those few people to sell their houses at market rate.  Assuming they ‘aren’t whites’, to use that wonderful term that somehow sounds pejorative in this context, the ‘aren’t whites’ category of wealth, on average, would increase via government subsidies, even though most ‘aren’t whites’ people would get nothing.  Problem sloved!  😐  And I do mean sloved!  😐

  7. Ron Oertel

    The cost of continued growth in SF: $20 billion for affordable housing

    If San Francisco wants to continue to grow jobs at the level we’ve seen for the past decade, the city will need to spend $20 billion over the next 20 years to provide enough affordable housing for the workforce, a new study shows.

    https://48hills.org/2021/12/the-cost-of-continued-growth-in-sf-20-billion-for-affordable-housing/

    It’s not rocket science, folks. It is, however – a subsidy for business.

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