Staying In LA - Affordable Home Ownership And Land Trusts
As I read through the almost daily stories of families struggling to make ends meet and what they go through to provide a home for themselves and their loved ones – with 73% of households paying over 30% of their income on rent, (and 48% paying over 50) forming larger households by joining with other families to afford rent, and many being pushed into homelessness — I realize how fortunate my family and I are because we’re lucky enough to live in a low-income set aside apartment in a beautiful new, market-rate building.
Low-income, set aside apartments are the result of public policy incentivizing developers to build apartments for low-income families, like mine, and there are all kinds of requirements dictating who can move into them, what the rent will be set at, and how much it can increase by. We’ve been living in this apartment for over 3 years now, rebuilding our lives and our future, and have started to dream of a place of our own. But with LA’s famously out-of-control real estate prices, my family and I often wonder how can we afford to buy a place on our limited income?
In 2015, my family and I were faced with an important decision to make about our future. Like many other families, we were looking to buy our first home and had been working towards that goal for years: saving for a deposit and closing costs, getting pre-approved for a mortgage, scouring the various real estate apps and sites. However, another opportunity presented itself in starting our own small business. The opportunity to work for ourselves and be our own boss was enticing, and so we decided that our first home could wait. We threw ourselves, our time/energy, and our nest egg into this endeavor. Unfortunately, like with many new businesses, things didn’t pan out and within three years we needed a fresh start.
“With LA’s out-of-control real estate prices, my family and I often wonder how can we afford to buy a place on our limited income?”
Fast forward to now and with the help of friends and family we’ve made the come back, but now comes the ‘what’s next?’. “With even households making mid-six figure incomes having a hard time affording a home in LA, what options do we have?” my wife asks. And so, like so many Californian other families, we start scouring the internet for the what our buying options look like in other states.
Arizona, check. Texas, check. I mention that I don’t like the extreme heat and wouldn’t want to move to places hotter than the San Fernando Valley. Michigan, check. Minnesota, check. Apparently, we’re only looking at places with extreme weather in one direction or another. More than that, California has been our home. We’ve raised our kids here. Our family, friends, and larger support and social networks are here. I’m not opposed to moving states, but I’d prefer to stay here, if we can. But the question remains, what options do we have?
Enter Community Land Trusts. One of the benefits of working for an affordable housing developer is that you get to work on some pretty cool projects. A while back, the City was asking for proposals to develop a vacant, City-owned lot into housing and an economic-opportunity model. Holos Communities developed a proposal that included affordable rental housing, affordable home ownership opportunities, a large supermarket, multiple smaller retail spaces, and a large community park. The land that this development would be built over would be acquired and owned by an entity known as a Community Land Trust.
A Community Land Trust, or CLT, is legal entity that acquires, owns, and controls land for the benefit of the surrounding community. Its leadership is made-up of local community members, who guide important decisions of the CLT’s stakeholders - how land should be developed to meet tenant needs, for example. There are many ways for CLT’s to develop and use their land:
A community lacking green spaces can decide to build more parks and community gardens
A community focused on promoting economic growth can build retail spaces for tenants and community-serving businesses
A community focused on creating opportunities for home ownership can build more housing
When a CLT decides to prioritize affordable home ownership, they leverage public dollars and/or land donations, to create housing opportunities for low income home buyers to buy and invest locally, so families like mine don’t have to cross state lines for similar opportunities. The opportunities for wealth creation and economic mobility, from renter to homeowner, stay in the local community and are recycled when a CLT homeowner decides to sell their property. Upon purchasing their property, the CLT homeowner has made a commitment that if they decide to sell, they’ll keep the purchase price affordable for another low-income family to also take advantage of.
“California’s our home. We’ve raised our kids here. Our family, friends, and larger social network’s here. I’m not opposed to moving states, but I’d prefer to stay here, if we can.
But the question remains, what options do we have?”
Another important benefit of CLTs and affordable home ownership opportunities is that they help preserve communities in the face of gentrification. Throughout LA, and parts of California and the Country, rampant land speculation and increasing home prices have led to the rapid transformation of entire neighborhoods. The result is the exodus of local resident and loss of neighborhood institutions. CLTs help to preserve some that neighborhood flavor and combat gentrification.
Creating affordable housing opportunities creates a number of other benefits for both homeowners and the community. Grounded Solutions Network tracks a number of them on their Shared Equity webpage, but to highlight a few of the more impactful metrics, their research shows that :
6 in 10 homeowners use the accrued equity in their affordable home to eventually purchase a market-rate home. That’s creating economic opportunity!
Since 2000, 30% increase in minority household that leverage affordable home ownership programs. That’s a racial equity metric!
99% of share equity homes avoid foreclosure.
If you’re interested in learning more about CLTs and/or the benefits of affordable home ownership opportunities, I’d recommend the websites below. Until then, support your local Community Land Trust efforts. Like me, it could be the opportunity you’ve been waiting for, and if not, you know they are out there doing good work for their communities.
Shelterforce: Understanding CLTs – a great overview of what CLTs are, with an accompanying short and insightful video.
Grounded Solutions Network – a network of individuals and organizations researching, educating, and advocating for CLTs, Shared Equity homeownership, and other community development measures.
HomeKeeper Social Impact – some very cool numbers on the demographics served, affordability levels, and community investment amounts from participating affordable homeownership programs.
Brian Valenzuela
As a Project Manager for Holos Communities, Brian supports the work of our housing development department by working on funding applications, entitlements submissions, assisting in the loan closing process, and managing development projects under construction.
You can read Brian’s full bio here.