By David M. Greenwald
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.