Makeisha Robey was raised in a house with three bedrooms and wanted the same for her own children. On a preschool teacher salary in Atlanta, this dream was not possible. As costs increased, her family moved from one rental to another.
Robey's life changed when she learned about Atlanta Land Trust during a meeting of her neighborhood association. Community land trust, an organization that assists people in purchasing affordable homes, gave her the opportunity to purchase a home below market rate. Her home was purchased for approximately $102,000 about three years ago. In Atlanta, the median house price in January 2020 is $287.500.
Robey said, "I love this house." I can imagine myself living in this house for the rest of my life. This is a wonderful program that can really give people with no other choices so many options.
Sometimes the land is part of the trust, but sometimes it's a new home. The homes are sold below market value. Homebuyers are required to accept restrictions on the future sale of their homes in exchange for this. This policy ensures that the houses remain affordable over the long-term.
In an era when homeownership has become increasingly difficult for most Americans, nonprofit land trusts funded by government, foundations, financial institutions and individuals have been a popular option to help people buy homes. According to the nonprofit Center for Community Land Trust Innovation, nonprofit community land trusts have grown from 162 to 302 since 2006.
According to a study by the Lincoln Institute of Land Policy, foundations and private sources have increased their support for land trusts since 1985. Private funds totaled $125.1 million between 2001 and 2006. In the five years that followed, the amount of money given increased by 80%. This was partly because private sources stepped up to provide more funding as government funding declined.
Typically, community land trusts aim to become large enough to be able to support themselves by leasing fees collected from homeowners. They rely on both government and private funding until they reach this size. Land trusts can benefit from philanthropic funding, especially when they are just getting started. The government can help them grow by providing larger scale funding.
Atlanta Land Trust received $3.6 million in funding from Kendeda Fund - a local family fund - and other sources to help build 20 homes. The Georgia Power, Tull Charitable and Joseph B. Whitehead foundations are supporting the construction of more homes.
The potential of land trusts as a way to solve the housing crisis in America has not yet been realized. Public doesn't understand the approach. Land trusts are also limited in their expansion due to the high cost of acquiring land and developing it.
Land trusts can help residents of a neighborhood afford to remain in their homes by preventing them from being lost to commercial development. According to the Lincoln Institute of Land Policy, people who purchase homes through a land trust stay in their home for longer than other homeowners. They are also less likely to be faced with foreclosures during the Great Recession.
Atlanta Land Trust was created in 2009 to begin a redevelopment project. Leaders were concerned that the project could cause housing prices to rise in neighboring neighborhoods and displace residents. Approximately 20 homes are now completed, and 120 townhomes in development. The trust aims to build 300 houses by 2025. The trust is close to reaching its $12.3 million target for building some of the homes with the help of local grantmakers. The trust also received grants from Wells Fargo, Ford Foundation and Bank of America Charitable Foundation.
Foundations support land trusts in many ways. In 2009, the Annie E. Casey Foundation purchased 53 homes independently in Atlanta's Pittsburgh area. This neighborhood was severely affected by the foreclosure crisis. The foundation prevented real estate speculators buying up the properties, which could have increased the price. The foundation has almost completed the construction or renovation of 75 homes, and will transfer ownership to Atlanta Land Trust of approximately half of those.
Amanda Rhein, executive Director of the Atlanta Land Trust, states that philanthropic support is essential to the creation of community land trusts. The trust will become self-sustaining by charging fees tied to housing units. For example, monthly fees to use the land. This is only possible after enough homes have been built.
Tony Pickett is the CEO of Grounded Solutions Network - a community landtrust association. He says that the insufficiency of government funding and the high cost of land acquisition are still problems across the nation. Pickett says that while philanthropic dollars can be especially useful as nonprofit community landtrusts expand their portfolio, consistent government funding will help them achieve significant growth.
Champlain Housing Trust has been able grow in Vermont largely because of the continued support from government. It manages and owns 650 affordable homes and 2,500 apartments.
In 2020, about half of the $35.7 million revenue generated by the organization came from federal, local, and state governments. The rest of the revenue came mostly from property rentals and fees.
The TD Charitable Foundation, for example, has provided support to the charity over the years. However it does not rely on donations.
Pickett believes the Low-Income Housing Tax Credit could be used as a model to help government. It subsidizes building and buying low-cost housing.
Pickett says that if we are talking about people who want us to operate on a larger scale, a policy similar to Low-Income Household Tax-Credit would be needed to make this happen.
The community land trust will not appeal equally to all those who are looking to be a homeowner. Some homebuyers are put off by not being able to get the full value of their homes if they choose to sell.
Jeffrey Lowe is a professor at Texas Southern University who specializes in urban planning. He says that if you are looking to buy a home as an investment, the community land trust model may not be for you.
Some people find it hard to understand the value of landtrusts because homeownership is seen as a way to build wealth.
Research shows that many people who buy homes through community landtrusts can gain the financial means to purchase their next home in the traditional market.
Grounded Solutions Network data shows that 60% of owners of community land trusts who sold their homes in the last decade bought other properties.
Lowe believes that a change in perspective is necessary to help people understand the value of land trusts. Community land trusts provide long-term stability to homeowners and communities, particularly those that are undergoing gentrification, rather than maximising wealth creation.
He says, 'It is about stability, security, and the ability to have permanent housing at an affordable price that will help us get out of the housing crisis which so many people in this country are facing.'
Robey, an Atlanta mother, said that the decision to join a land trust was logical to her.
She says, "I didn't mind the idea of a shared equity and not owning the property outright, because it wasn't for investment purposes." I wanted a home that I would live in.
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