Molly Van Avery still remembers walking over the random papers and toys strewn on the floor of the previously foreclosed home she was examining in Minneapolis’ Powderhorn neighborhood. Food was rotting in the kitchen. Pictures of the family that previously lived in the house still hung on the living room walls.
It was 2009, and, at the time, Van Avery couldn’t afford to buy the home on the open market. Over the previous decade, she had moved from apartment to apartment and made a modest salary as a nonprofit administrator and public artist, and she didn’t have much to put toward a down payment.
“I had zero dollars,” she said.
But she still wanted to buy a home, prompted by the fatigue of moving around and the high and growing cost of rent in south Minneapolis, the area she grew up in and where she wanted to stay.
It was a desire that eventually led her to an organization called the City of Lakes Community Land Trust. As one of the largest community land trust organizations in the country, City of Lakes Community Land Trust has helped hundreds of low- and middle-income people buy a home since the group’s inception in 2002. In recent years, it’s been joined by other community land trusts (CLT) in the Twin Cities and around the state, all boasting programs that offer a way to buy and maintain homes for people who otherwise wouldn’t be able to afford them.
That includes Van Avery, who, ten years on, remains a proud homeowner. It also makes her the sort of success story that some advocates tout in pointing to community land trusts as one possible way to help alleviate critical housing issues in the metro.
How community land trusts works
Community land trust organizations are often nonprofits, though they can be backed by private firms, and they often receive money from city and county governments in the form of grants. And here’s how they operate: CLTs buy real estate or secure mortgages on the open market, then resell the properties to lower-income people at lower, more affordable prices. CLTs are able to do that by retaining ownership of the property’s land while selling the home to the buyer, who then leases the land from the CLT. That lease can be as low as $15 a month, and though lease terms may vary, most CLTs offer a 99-year lease with the sale of each home.
Without having to pay for the land, more people are able to afford the home. In fact, some of those who are able to buy a home via the CLT model in Minneapolis make only 31 percent of the area’s median income. “Talk about reducing homeownership disparity,” said City of Lakes CLT executive director Jeff Washburn.
City of Lakes also makes home buyers agree that should they decide to sell, they will only sell to other people who need the assistance of a CLT to afford the home. If that happens, the homeowner enjoys 25 percent of the profit, while City of Lakes retains the equity in the land. The rest of any profit from a sale goes back to the organization, which uses the surplus to subsidize the sale of the home to the next buyer.
Advocates say this “shared-equity” model offers an affordable housing option that can virtually last in perpetuity, while also helping the home seller amass wealth to enter the open housing market. “We have a number of those success stories,” said Sherry Timmermann Goodtaster, executive director of Two Rivers Community Land Trust in Woodbury, which places people in homes in Washington County.
After determining that a certain family or individual can handle the cost and burden of owning a home, CLTs begin their relationships with prospective homebuyers by putting them through a crash course on the housing market and how to maintain a house.
CLTs also invest in necessary upgrades to homes, in what is referred to as a grant on the property. The value of the grant stays with the home, and is passed on to successive homeowners. If a homeowner wants to make improvements themselves, CLTs offer guidance in finding trustworthy contractors.
Different CLTs have different criteria for homebuyers. For example, the Rondo Community Land Trust typically approves people who make less than 80 percent of the area median income, and have a credit score above 640. But the organization is flexible. “If your credit score isn’t good enough, it doesn’t mean we’re slamming the door in your face,” said Rondo CLT staffer Jamie Kanazawa.
The role of CLTs in addressing the Twin Cities’ housing shortage
Though they provide affordable housing and avenues for accruing wealth through homeownership for hundreds of people, the CLT organizations around the Twin Cities have yet to be deployed on a grander scale, and some advocates are skeptical about how big a role the organizations can play in addressing Twin Cities’ housing crisis.
Kanawaza, with the Rondo CLT, said she is a believer in the CLT model but thinks it is just one option in what needs to be a multifaceted effort in providing adequate housing across the Twin Cities. Services that specifically help the homeless are a step that obviously comes “far before the CLT model.”
Others, like City of Lakes CLT director Washburn, are more evangelical in their belief that the model provides real opportunities for addressing housing gaps, even among the homeless in Minneapolis, even if he acknowledges that it would take huge sums of money.
“For about $900 million dollars, which is a ton of money, we could achieve parity for Black and white homeownership,” said Washburn. “That is less than what we spent on US Bank Stadium. These are solvable problems.”
Washburn also thinks that the notion of a “straight-line continuum” of housing stages and needs — from homelessness to a shelter, to an affordable rental, to a market-rate rental, and finally to homeownership — doesn’t reflect reality. He cites a City of Lakes program for homeowners who have paid off their mortgage but are on a fixed income and cannot afford their property taxes. In that scenario, the homeowner is at risk of swiftly tumbling from the top of the proverbial housing totem all the way to homelessness.
Both Minneapolis and St. Paul are looking toward CLTs as part of the continuum of options to address housing needs. Saint Paul Housing and Redevelopment Authority set up a CLT financing program in 2019, and though the initiative experienced a “COVID-sized hole” in its initial timeline, senior project manager Nick Boettcher says the city is now in the process of drafting development agreements with multiple community land trust organizations.
In Minneapolis, the city has continued to provide grant funding to City of Lakes CLT, but it’s also created — after completing a year-long study — a program on “perpetually affordable homes” that borrows elements of the land trust model. The city anticipates development applications for the new program in early 2021, said city spokesperson Kelly Stacken.
‘What everyone deserves’
Van Avery counts herself as one of the success stories of the community land trust model. Having safe, stable housing, she said, has given her the foundation to start a family and go back to school to pursue a master’s degree.
And as someone who lives in the “wake,” she says, of another family’s foreclosed home, Van Avery wants more people’s lives improved by homeownership. In her capacity as an artist, Van Avery participated in a project in which those who live in a foreclosed home expressed their guilt and sadness, and spoke about harnessing those passions into pushing for housing models that keep people in their homes, or offer homes to those who cannot buy one on the open market.
“The thing that I love so much about the land trust model is how much respect and integrity it gives us as people,” said Van Avery, adding that other affordable housing options tend to come with a cap on personal income or other restrictions. “In the land trust model, it’s like, ‘Live your life, we trust you and believe in you and know you can thrive.’ That is the piece that I feel is what everyone deserves.”