What is a Community Land Trust? And could one help with Tacoma’s homelessness crisis?
When Tacoma Housing Now took over vacant Gault Middle School in November to shelter unhoused people, the action came with a list of demands.
The most prominent of them insisted on making Gault, which has sat vacant for a decade, part of a Community Land Trust, also called a CLT.
That same demand fueled the housing advocacy group to block traffic and pitch a tent in the middle of the intersection on Pacific Avenue and 15th Street on Dec. 8.
While both actions were eventually stopped by police, the demands remained.
“We’re going to keep escalating our actions until the city houses every single person in the city with one of the many empty buildings that they own,” Tacoma Housing Now spokesperson Rebecca Parson told The News Tribune.
In Tacoma, CLTs aren’t a new idea. A CLT is an affordable housing tool created by a community-led organization that owns land and sells housing at below market rate in perpetuity.
The city has been exploring ways to launch a CLT since the creation of its Affordable Housing Action Strategy (AHAS) in September 2018. The strategy was developed “as an urgent response to a changing housing market, increasing displacement pressure among residents, and a widespread need for high-quality, affordable housing opportunities for all.”
The AHAS stated that work on a CLT would begin within three to four years and that local and regional nonprofits would take the lead.
Fast forward two years, and Tacoma’s housing market is still booming, even amid a pandemic. Tacoma was declared the nation’s hottest housing market in May 2019 and again in February 2020 by Redfin.
Pierce County is also breaking records for median home sale prices. In November, $445,000 became the record median closed sale price for residential homes, according to a report from John L. Scott Real Estate,The News Tribune’s Debbie Cockrell reported this month.
With the distinction comes anxiety over keeping Tacoma affordable for longtime residents.
Kathy McCormick, director of real estate development for the Tacoma Housing Authority, said people living in high-rent areas like Seattle and coming to Tacoma for relief.
“Our housing costs are rising so much more quickly than our incomes,” McCormick said.
McCormick, who’s worked on CLTs in other states, including Colorado, said that a CLT would be a helpful tool for Tacoma.
“A CLT is a method to ensure permanent affordability,” she said.
What is a CLT?
A CLT occurs when a community-based organization — governed by a board of CLT residents, community residents and public representatives — retains ownership of plots of land and provides affordable housing in perpetuity by selling the housing on that land for below-market prices. That way, people are buying the housing, but not the land.
“In exchange for below-market prices, purchasers agree to resale restrictions that keep the homes affordable to subsequent buyers while also allowing owners to build some equity,” according to a 2015 report published by the Lincoln Institute of Land Policy. “The CLT also prepares home buyers to purchase property, supports them through financial challenges, and manages resales and rental units.”
There are more than 225 CLTs in the United States, according to the Grounded Solutions Network, and more than 15 in Washington state, including Seattle, Skagit County, Bellingham, Snohomish County, Port Angeles, Orcas Island and Leavenworth. More are popping up as the concept grows in popularity.
Often, CLTs appear in gentrifying neighborhoods or areas with skyrocketing rents as a way to preserve affordable housing stock. Properties within a land trust don’t have to be connected; units can exist across a city.
The San Francisco Community Land Trust, for example, was launched in 2003, at a time when the city was one of the hottest real estate markets in the country.
“Housing organizers were seeking a model that could prevent evictions and give lower-income residents more control over their living situations,” according to the 2015 Lincoln Institute of Land Policy study.
Homestead is a community land trust in Seattle that launched in 1992 and now has 218 homes in its trust. The CLT serves people who earn between 50 and 80 percent area median income. As of April 2019, 50 percent AMI is $55,350 for a family of four in Seattle, according to the Seattle Housing Authority.
Homestead lowers cost to buyers using public and private funds that can take the form of city, county, state and federal money, Community Reinvestment Act grants, corporate and charitable foundation gifts and gifts individual donors, according to its website.
If a CLT resident’s income increases beyond the required AMI, they do not have to sell their home and can stay as long as they want. When they decide to sell, they sell to the next income-qualified buyer.
Kathleen Hosfeld, executive director of Homestead, said that the application process starts online to make sure that the family seeking housing meets the income threshold. Then, depending on what homes are available in the trust, applicants opt in or out. When an applicant expresses interest, the formal application process begins.
Typically there are three or four equally qualified families, and the next step is to consider each family’s risk of displacement and the size of the family in relation to the size of the house.
“We do find that once they stabilize in place with an affordable mortgage payment that truly is affordable for them, then they do experience economic mobility — they can focus on their careers, they can go back to school, get another degree — all these things that will help them grow and help them achieve their dreams beyond just having stable housing,” Hosfeld said.
Community takes the lead
Housing advocates, city officials and organizations have expressed interest in creating a CLT in Tacoma in past years as the city’s housing market boomed and growing homelessness reached emergency levels.
In 2017, Anaid Yerena, an architect, urban planner and an assistant professor at the University of Washington Tacoma, wrote an op-ed for The News Tribune highlighting CLTs as a good option for Tacoma as the city reached a “housing affordability tipping point.”
“(L)et us not forget the people to whom we owe much: those who were here, working hard, to help forge Tacoma’s present success,” she wrote.
Tacoma Housing Now recently filed with the Secretary of State’s Office to become a nonprofit under the name “Tacoma Community Land Trust.” It was recognized last week.
Parson said the next step in the group’s efforts would be generating funding and acquiring land. The group has pressured the city of Tacoma and Tacoma Public Schools to donate land for the effort, including Gault Middle School, and would plan to use funding to fix up the building.
The cost of starting a CLT fluctuates depending on a number of factors, including the cost of property, the number of paid staff and the cost of licensing to become a 501 (c)(3) nonprofit designation. Typically, CLTs use various public funding like city, state or federal grants to pay for capital costs and private donations for operating costs, according to Hosfeld.
Parson said her group is seeking the expertise of an organization or consultant to create groundwork for managing the CLT and estimate an initial contract of $50,000, which would fund a part-time administrative staff person.
In December, Tacoma Mayor Victoria Woodards met with members of Tacoma Housing Now to discuss creating a CLT.
“I am glad that advocates have raised the profile of this community conversation, and I hope it will spur forward momentum on this unique tool to provide housing to our most vulnerable neighbors,” Woodards said in a statement last week.
Upon the request of Tacoma Housing Now, city staff provided lists of properties owned by the city and by Tacoma Public Utilities. Community and Economic Development Director Jeff Robinson said the city has not identified any specific properties for use by a CLT.
Robinson is familiar with CLTs, having previously worked as housing trust fund manager for the state of Washington in the 1990s.
Robinson said that if the target audience for the CLT is people who are formerly homeless and have little to no income, operating a CLT is trickier. CLTs that offer rental housing, not just ownership, are rarer and require some sort of cash flow or revenue source, either through a foundation or benefactor, to pay for property management and insurance.
“I told (Tacoma Housing Now) that I didn’t think it was insurmountable, but it obviously is an obstacle,” Robinson said.
Robinson also wants to bring other community voices to the table, including Tacoma Housing Authority. Staff there have worked in the past to see if there was interest in starting a CLT in Hilltop.
“I think it’s important for us to make sure that we get all the interested parties in one room — a virtual room, probably, at this point — to have this conversation, so that as we move forward we do so in a coordinated fashion,” Robinson said.
