Stewarding Housing Affordability through Land Trusts: An Ohio Example

February 14, 2019; Columbus Business Journal

In Columbus, Ohio, a community land trust is being launched to address housing affordability proactively by creating permanently affordable housing within mixed-income neighborhoods.

Recent NPQ coverage of homelessness has stressed both the extreme nature of America’s housing crisis as well as the need for nonprofits to work effectively with governments and business to implement new models and best practices.

Los Angeles Mayor Eric Garcetti described homelessness as the “the greatest moral and humanitarian crisis of our time.” Los Angeles may be at the epicenter of the homelessness wave—the area has experienced a 75 percent growth in homelessness over the past seven years and has the highest rate of unsheltered people in the country—but this is a nationwide problem, and a growing one.

Some communities have had success in addressing homelessness. For instance, the city of Norman in Cleveland County in Oklahoma has effectively ended veteran homelessness. Their success—as of this time last year, Norman was the seventh community in the nation to reach federal standards and benchmarks from Built for Zero, a national effort to end chronic and veteran homelessness—has been credited to cooperative efforts of local agencies, nonprofits, and government officials.

“It is because of our relentless community-wide effort…that we have reached such a significant goal,” says Norman’s mayor, Lynne Miller.

Yet homelessness is just one aspect of a broader crisis of housing affordability, as dramatic price increases have spawned a historic gentrification trend. The 2015 report Gentrification in America by the Governing Institute showed that nearly 20 percent of neighborhoods with lower incomes and home values experienced gentrification since 2000, compared to only nine percent during the 1990s. This has doubled the pressure on affordable housing stock and has forced advocates both to deal with the homelessness crisis in front of them and work to forestall gentrification.

The issue of middle-income families slipping into housing precarity is not new, but it has intensified. One promising approach to address the root causes of housing affordability is the community land trust (CLT). As NPQ noted last December:

With a CLT, the homeowner owns the home, but the trust owns the land underneath the home; a deed or contract sets forth the rights of each party. As with a fee-simple house, the homeowner retains the rights to privacy, to exclusive use of the home, and to bequeath the property to heirs. But the trust has rights, too. Most notably, it can set a resale formula to preserve affordability, set limits on capital improvements (again, to preserve affordability—hard to do that if you allow teardowns and the replacement of modest homes with McMansions), insist on repairs (to preserve the long-term value of the housing for future owners), and set limits on refinance.

Over the past couple of years, CLT efforts have been expanding in a number of places, including the state of Florida; the San Francisco Bay Area; Buffalo, New York; Washington, DC; Philadelphia; New York City; Reno, Nevada; and many others.

Now, another such effort is emerging in Columbus, Ohio’s Franklin County, where the Central Ohio Community Improvement Corporation (COCIC) is spearheading a new mixed-income housing project.

Affordable housing is a complex issue, and nonprofit leadership in the field often takes on complex forms, as evidenced by COCIC’s mission:

COCIC acquires properties in order to improve the quality of neighborhoods, increase property values and return unproductive properties to contributing, tax-paying status, and create diverse housing and business opportunities by leveraging resources to promote and facilitate the reclamation, rehabilitation and reutilization of vacant, abandoned, tax-foreclosed, or other real property in the County.

Through the newly formed joint Columbus and Franklin County Land Trust, COCIC is leading talks with a private builder to develop 30 to 40 homes affordable to middle-income families—which stay that way when resold.

What’s in it for the developer? The opportunity to build more expensive homes in the same neighborhood. “That way, we really start to create mixed-income neighborhoods,” said the nonprofit’s CEO, Curtiss Williams.

The proposed land trust homes would be a mix of single-family homes and duplexes with an average cost of about $165,000, in a range considered affordable for a household making up to $80,000 a year, according to Hope Kingsborough, COCIC vice president of programs and housing.

Key to the COCIC model, the trust keeps the land and executes 99-year leases for any structures, providing for a defense against gentrification. Through the sharing of equity with the homeowner, the trust exerts a measure of control on pricing.

“It remains affordable for every subsequent buyer,” Kingsborough said.

The private developer will not be disclosed until the deal is finalized, but they have committed $7.2 million to Phase One to build homes that are indistinguishable from market-rate housing. Columbus Mayor Andrew Ginther announced in his State of the City address a commitment of $3.8 million in public money to the project:

This money will be an investment allocated over several years and used in partnership with many other private and public agencies including the county and our suburban neighbors—because affordable housing is not a problem that ends at our city limits.

Integral to the model, the public money subsidizes the difference between the developer’s cost and what the homeowner pays without resulting in a higher asking price as another factor in keeping future sales affordable, Kingsborough explained.

A project that delivers 40 homes for middle-income families may seem a drop in the bucket for a problem so vast, but COCIC and their public and private partners have their sights set on making a bigger statement. The combined city and county land banks currently have about 1,500 vacant residential lots, with obvious potential for making a bigger splash.

Long-term, the housing shortage in America will never be addressed solely by reacting to homelessness. Emergency services and shelters are vital threads in the social safety net, but the scope and scale of the crisis demands models like COCIC, which can be expanded and normalized in development efforts across the US.

“We’re in lockstep with the city in that the land trust concept is one we believe in,” said Jim Schimmer, Franklin County economic development director.—Keenan Wellar