Tool Time on TAP – Part 2: Community Land Trusts
Relocated house from the Rainey Street National Register District in the Guadalupe-Saldaña Neighborhood (Image: Guadalupe Neighborhood Development Corporation)
BY MARY KHALE, PRESERVATION AUSTIN ADVOCACY COMMITTEE CHAIR
This is the second in a three-part series where we’ll share an in-depth look at some of the tools recommended in our Urban Land Institute Technical Assistance Report on Preservation, Affordability, and Anti-Displacement, co-sponsored by Preservation Austin with the City of Austin Department of Housing & Planning. The report provides recommendations for new tools, programs, and policies to preserve older and historic housing stock while addressing our city's growing affordability crisis. With this series, we hope to demystify some of the tools discussed in the report and provide greater context and understanding of how they can work in Austin.
Read the report and its recommendations in full at the link below.
Faced with a bad case of writer’s block when trying to frame this post (pun intended) on Community Land Trusts (CLTs) and their importance to historic preservation, one of the tools recommended in the TAP Report, I decided to explore the brave new world of Artificial Intelligence, asking ChatGPT what the term “community” means. After all, evidence in Austin and many locations elsewhere shows that historic preservation and CLTs make great co-partners in addressing the affordability and anti-displacement challenges facing today’s cities.
The response from ChatGPT was mostly boilerplate blah, but there were a couple of paragraphs that were useful in highlighting why CLTs are important in promoting affordability, slowing displacement, and fostering strong neighborhoods, all while supporting historic preservation:
The term "community" refers to a group of people who share common characteristics, interests, or goals and are connected by social, cultural, or geographic ties. It encompasses a sense of belonging, cooperation, and support among its members.
In a community, individuals come together to interact, collaborate, and support one another, often working towards a common purpose or to address shared concerns. Communities can provide social support, a sense of identity, opportunities for personal growth, and a platform for collective action. They play a vital role in fostering social connections, promoting inclusivity, and shaping individual and societal well-being.
Given the many positive elements that living in a strong, supportive community engenders, using CLTs in the historic preservation toolkit is key to making Austin a city where everyone feels at home. The use of CLTs in historic preservation also supports the city’s ongoing Equity-Based Preservation Plan, which is tasked with protecting and preserving the City’s historic-age buildings and diverse cultural heritage. While there is no single solution to solving the affordability challenge, CLTs are a vital piece of the strategy.
What is a CLT, and how does it work?
According to the Center for Community Land Trust Innovation, a CLT is “a non-profit corporation that holds land on behalf of a place-based community, while serving as the long-term steward for affordable housing, community gardens, civic buildings, commercial spaces, and other community assets on behalf of a community.” The first CLT in the United States was formed in Georgia in 1969 as an outgrowth of the Civil Rights Movement. International land reform initiatives such as the United Kingdom’s Garden City Movement and India’s Bhoodan-Gramdan Movement also influenced the development of CLTs in the U.S.
OK, that’s interesting and all, but how exactly does a CLT work? A cool graphic in English and Spanish by the Democracy Collaborative shows a typical CLT structure, including its leadership framework, and the TAP Report decodes a CLT’s key elements:
CLTs are a form of shared equity ownership. CLTs use public and private investment funds to acquire land on behalf of a specific community. The CLT owns the land in perpetuity, i.e. forever.
Community residents can purchase their homes, but not the land on which the houses sit. Instead, residents enter into low-cost, long-term property leases with the CLT (“ground leases”). Monthly charges for the ground lease range anywhere from $25 to under $100 per month.
Although CLT homeowners can never sell the land their home is on, they usually gain some degree of appreciation on the home in addition to the equity they achieve by paying down the principal on their mortgage.
During the term of the ground lease, homeowners enjoy full and exclusive use of the property, as well as the privacy rights associated with homeownership.
CLT residents have many of the same obligations as other homeowners, including property tax liability. Fortunately, Texas has one of the clearest laws governing how appraisal districts value CLT properties, which gives CLT homeowners stability and manageable property taxes.
The CLT often has a right of first refusal for every sale, and there is a cap on the resale price so that the housing remains affordable for the next owner.
CLT leases typically include an occupancy requirement that the property must serve as the owner’s primary residence.
Most CLTs allow owners to pass ownership of the home to their children, which promotes generational wealth-building and neighborhood stability.
What are the pros and cons of a CLT?
The benefits of CLTs are clear:
Long-term affordable housing in the community.
Community buy-in, leadership, and stability.
Lower costs to own or rent a home.
Opportunity to build equity and realize appreciation on the home.
Housing security and privacy rights.
Generational stability.
The potential downsides of CLTs represent the flip side of their benefits and necessitate fully educating prospective buyers:
Potential homeowners may balk at not owning the land that their home is on.
An entity with the capacity to actively monitor the resale restrictions and work closely with the homeowners is necessary to ensure that the home is maintained and that the restrictions on the home are followed.
The cap on resale profits when a homeowner decides to sell limits the homeowner’s profit potential.
CLTs must compete with other nonprofit housing organizations for limited resources, which hinders reaching a critical mass of housing inventory to serve the community.
It is important that all stakeholders – residents, advocates, and policy makers – understand these pros and cons to fully maximize the potential of CLTs to support stable, supportive neighborhoods as Austin navigates its current economic growth.
What programs does Austin have?
Austin is home to several CLT organizations. One of these is the Guadalupe Neighborhood Development Corporation, which formed in the early 1980s in response to development pressure just east of Austin’s Central Business District and I-35. As the first CLT in Texas, the GNDC prioritizes families with generational ties to the neighborhoods where it operates, typically within the 78702 and 78721 zip codes. The GNDC builds and sells CLT homes and offers rental homes at affordable rates to income-restricted residents.
The GNDC includes several projects, such as the Guadalupe-Saldaña Net Zero Subdivision, a former illegal dumping site that combines environmentally friendly design and supportive social services with GNDC’s affordable homeownership and rental programs. Fifty-eight of the final 125 units will be sold in CLT transactions, and most of the others provide rental housing, including thirty-five created in partnership with the Jeremiah Program Austin, which “disrupts the cycle of poverty for single mothers and their children.” While relocation of properties is not typically viewed as ideal within the historic preservation lens because of the loss of historic context, the fact that the GNDC has developed and sold four homes relocated from the Rainey Street Historic District in a CLT sale demonstrates that demolition of historic properties isn’t inevitable, and that CLTs can play an important role in preserving historic properties.
Another innovative step the GNDC is taking to support communities is its Alley Flat Initiative, in which homeowners can build small, environmentally sustainable residential units on the back of their lots that are accessible by the alley networks in many of Austin’s neighborhoods. (My grandparents lived on such a lot in an older neighborhood in Houston.) Homeowners can thus generate additional income while staying in their homes, many of which are located in Austin’s historic neighborhoods.
The GNDC is also developing CLT homes in the Montopolis neighborhood and has established thriving communities near the French Legation Museum, East Austin’s Willow Street neighborhood, and in a modern, sustainable community three miles east of downtown Austin called Solutions Oriented Living (SOL).
Another local organization is the Austin Community Land Trust (ACLT), which Austin City Council created in 1979 as a public, nonprofit corporation via the Texas Housing Finance Corporation Act. Austin City Council serves as the AHFC’s Board of Directors, and ACLT homes are designated for first-time homebuyers who meet income limits and residency requirements. The homes for sale include a mix of new construction and older stock, and the program has enabled longtime residents of East Austin to purchase homes in neighborhoods where they have generational ties, places where “everyone on the street knows someone from East Austin.” ACLT also has rehabilitated older homes, including at least seven in East Austin's Robertson Hill neighborhood, which dates to the 1860s.
Austin Habitat for Humanity is another CLT participant, offering place-based new homes for sale to income-eligible residents who are willing to donate 200 hours of volunteer time to the program.
Who else has CLTs?
The San Antonio Housing Trust has found creative ways to support both affordability and historic preservation, working to rehabilitate the 1914 Calcasieu Apartments, which are listed on the National Register of Historic Places. Connected to the SAHT is the Esperanza CLT planned by the Esperanza Peace and Justice Center, which will permanently preserve existing older homes in San Antonio’s Historic Westside for income-restricted residents.
Calcasieu Apartments, San Antonio (Image: Apartments.com)
In Dallas, advocates are seeking advice from Grounded Solutions Network, a national advisor on housing affordability, as they take preliminary steps to establish a CLT. Dallas advocates note that, for many, CLTs are a relatively new housing paradigm, one that requires patience on the part of stakeholders for implementation. These challenges are evident in Houston, where the city-supported Houston Community Land Trust has faced both bureaucratic and budgetary obstacles in its efforts to help low-income residents stay in their communities; the program’s problems highlight the challenges of providing affordable housing in one of the fastest-growing regions in the U.S.
At the state level, the Texas State Affordable Housing Corporation (TSAHC) is an important player in the CLT landscape. Established by the Texas Legislature, the Affordable Communities of Texas (ACT) program of TSAHC is a land banking and land trust program that assists local nonprofit and governmental entities with the acquisition and redevelopment of distressed properties. TSAHC has partnered with organizations around the state to preserve historic housing and support affordability, whether in Houston’s Old Sixth Ward National Register Historic District or in Waco’s Freedom’s Path development, which leverages three rehabilitated historic buildings to provide thirty-four homes for veterans on the local Doris Miller VA Medical Center campus.
On the national level, a number of cities have successful CLT programs. In New York City, the Cooper Square Committee has a respected legacy of providing affordable housing while preserving historic properties. Denver’s Urban Land Conservancy is a model of incorporating historic properties into CLTs, having recently purchased a college campus with buildings that date from 1886 and the groovy 1956 Citywide Banks Building. The Burlington Community Land Trust focuses on the historic African American neighborhood of Morrowtown, successfully incorporating affordable housing and economic development while preserving historic character. In Oakland, California, the East Bay Permanent Real Estate Cooperative has acquired a corridor of historic sites, including Esther’s Orbit Room, a legendary jazz club that is being revitalized for business and residential purposes.
Citywide Banks Building, Aurora, CO (Image: Urban Land Conservancy)
These programs comprise part of the international network of over 400 CLT initiatives, more than 240 of which are in the U.S. While my friend ChatGPT would like me to write about every single one of them, these few examples should demonstrate the highlights, benefits, and challenges of running successful CLT programs. The affordability crisis won’t be solved by any one tool alone, but CLTs and the longtime communities they support play an important role in tackling the displacement, affordability, and historic preservation challenges facing Austin today.