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Land Trust Aims to Create Affordable Housing
Dale White
An idea for creating and preserving affordable housing that, so far, has scarcely been used in Florida's soaring real estate markets could take root here this fall.
A new, nonprofit trust would perpetually own land on which houses priced for moderate-income families are built or remodeled. It would impose price controls on those homes for the initial sale and every sale thereafter.
The land trust -- which is being formed at the suggestion of the County Commission -- is intended to significantly lower home prices for educators, nurses, police and other workers who are finding housing costs escalating out of their reach. As of this spring, the median sales price of a home in the Sarasota-Bradenton market hit an all-time high of $316,600 -- a 31 percent jump from a year earlier.
The proposed Community Housing Trust of Sarasota County is likely to become the fourth organization of its type in the Sunshine State. It has the potential of quickly becoming the largest.
"It's going to be interesting to see how it works on a countywide basis," said Wight Greger, an adviser with the Florida Housing Coalition. "Most community land trusts are neighborhood- or city-specific."
The Florida Keys has two community land trusts, in Key West and Marathon. Yet their efforts have been limited because of a scarcity of available land and a Monroe County law that allows no more than 186 residential building permits per year countywide, regardless of whether the homes are built by for-profit or nonprofit developers.
The Hannibal Square Community Land Trust, which wants to put 10 new, moderately-priced homes on the market in a struggling Winter Park neighborhood, is expecting approval of its tax-exempt status within days.
The Community Housing Trust of Sarasota County, which is on the verge of incorporating, is expected to become the fourth such trust in Florida. Groups in Lee County, Escambia County and Lake Worth are also exploring the idea.
More than 160 land trusts have been created nationwide for affordable housing. The concept is a twist on the conventional nonprofit land trust, which acquires property or development rights to preserve environmentally-sensitive areas.
Of the community land trusts launched in Florida so far, Sarasota County's has the potential of having the greatest impact and scope.
Donations of land and money
The trust's first acquisition could be a 146-acre tract off Laurel Road. The Gulf Coast Community Foundation of Venice bought the land this summer for $16.1 million, expressly for the creation of an affordable housing subdivision of 500 town houses. The foundation is considering donating the land to the trust, which it is helping launch.
Several hundred acres off Palmer Boulevard, Bee Ridge Road Extension and State Road 72 could also be potential sites of interest to the trust and affordable housing developers.
This fall, the County Commission will consider allowing higher densities on those scattered properties if developers agree to keep at least half of their new homes priced for moderate-income buyers.
The trust does not yet have a dedicated funding source, however. It expects to rely heavily on donations of land or money from the county, foundations and other sources.
On Tuesday, the trust's organizers will update the County Commission about their progress.
Last fall, the commission put up $50,000 for startup costs and asked the think tank Sarasota County Openly Plans for Excellence to coordinate the creation of the new agency. Although they initiated it, the commissioners wanted the trust to be a nonprofit corporation that functions independently of the county government.
County officials hoped the trust would be operational by this spring.
"It would have been nice to have it done three months ago but it has been very complex," said Tim Dutton, SCOPE's executive director. Dutton organized a 13-member committee to get the trust up and running.
"Most of us needed a fair amount of education about all the technicalities," said Steve Queior, a committee member and president of the Greater Sarasota County Chamber of Commerce.
The volunteer group has been meeting monthly with Michael Brown of Burlington Associates in Community Development, a Minnesota-based firm that specializes in setting up community land trusts. Brown cut his teeth on the concept when he helped create the nation's first community land trust in Burlington, Vt., 21 years ago.
The committee is putting the final touches on the trust's incorporation papers and request for tax-exempt status. It expects the trust to be operational this fall.
The lease-and-own concept
Much of the group's attention has focused on a detailed, 32-page land lease, the thrust of what the trust is about.
The trust will acquire single lots and larger tracts by purchase or donation. Approved developers would build homes on the trust's land without buying it and factoring its value into their homes' prices.
The trust will give the future homeowners renewable, 99-year leases for their lots. The owners also will not be allowed to factor in the land's value if they sell their homes.
Before they can put their homes on the market, the homeowners must give the trust an opportunity to buy them. Even if the trust declines to buy a home, it must approve any resales and ensure that the next buyer also meets its income criteria.
A sliding scale, based on how many years the sellers have lived in the home, may also be imposed to determine how much appreciation they can earn.
Dutton said the trust committee is considering an incremental scale that, for example, would entitle a seller to 25 percent of the home's increase in value after seven years.
Richard Casey, administrator of the Middle Keys Community Land Trust in Marathon, said that trust allows a homeowner to get 3 percent of the home's increase in value each year or the same percentage as the Keys' annual increase in median income, whichever is lower.
The median income in the Keys has been going up 4 percent a year lately, Casey said. So the eight homeowners who live on trust-owned land there are seeing their equity in their homes go up 3 percent annually.
The amount isn't as puny as it seems, Casey said. "For a $140,000 house, that's still $4,200 a year and a pretty good return on their investment."
Yet organizers of the Sarasota County trust expect to hear criticism because it will deny its clients the full appreciation of their homes.
"I know there will be naysayers, but you have to start somewhere," said Linda Holland, a committee member and activist for Sarasota's Gillespie Park neighborhood.
Families who take advantage of the trust would be unlikely to own a home without it, Holland said. "This is not about making money, folks. It's about having a decent place to raise your family. Isn't that what it should be about? How about the value of that?"
An expanding role
Whether the local trust will achieve significant results remains to be seen, Dutton said. "No one has a crystal ball."
Yet Queior believes the idea of perpetual affordability should be the trust's selling point.
"Developers, foundations and others interested in affordable housing would shy away if it (the affordability criteria) were only applicable for the first resident for a few years," Queior said.
Curt Singleton, chief executive of the Sarasota Association of Realtors, doesn't think first-time buyers who are struggling to find homes in their price range will be deterred by the land-lease requirement.
"It's certainly a viable alternative for people who want to live and work in Sarasota," instead of commute from North Port, Palmetto or other lower-priced areas, Singleton said.
Dev Goetschius, director of the three-year-old Housing Land Trust of Sonoma County, Calif., said moderate-income home buyers there have not been scared off by the fact that they won't own the dirt beneath their homes.
Efforts to achieve affordable housing without a land trust can often be in vain and more costly, Goetschius said.
Usually, down payment assistance or another financial subsidy is provided but no restrictions are placed on the home's resale value. "So it's not affordable to the next homeowner or the next homeowner," Goetschius said. Subsidy after subsidy could be required for the same home as it changes hands among lower-income owners.
Goetschius recommends that Sarasota's land trust start off with a small prototype project. "It allows you to get internally organized and focused."
For its initial project, Sonoma's land trust raised $600,000 in private donations to purchase property where Habitat for Humanity built six houses for low-income families and a for-profit builder built four houses for families with moderate incomes.
Dutton said the Sarasota group would like to see its trust become more than an agency that acquires and leases land.
"We need some (countywide) organization that looks at affordable housing and tries to bring all the players together," Dutton said.
The trust could become an organization that monitors national and state legislation, he suggested. It could also initiate other programs to generate affordable housing.
"It could become a vehicle for all kinds of things we haven't thought about yet," Dutton said.
Volunteers on the trust's steering committee also include Diane McFarlin, publisher of the Sarasota Herald-Tribune; attorney Dan Bailey; Phil Delaney of Northern Trust Bank; Gloria Koch, who is active in the Junior League; Englewood resident Don Ross; real estate agent Tracy Seider; Alex Young of the United Way; Teri Hansen of the Gulf Coast Community Foundation of Venice; and Tom Waters and Stewart Stearns of the Community Foundation of Sarasota.
Examples of community land trusts
BURLINGTON, VT.
This university town on the shores of Lake Champlain created a land trust in 1984 that has since gotten more than 270 apartments and 370 owner-occupied houses and condos built. The first housing land trust in the nation, it was a variation of the concept that nonprofit groups have long used to buy and preserve environmentally- sensitive lands. www.bclt.net
DURHAM, N.C.
Organized in 1987, residents of a low-income, predominantly minority neighborhood next to Duke University formed the Durham Community Land Trust to rehabilitate their neighborhood one block at a time. So far, they have built or rehabilitated more than 100 homes. Financing came from the Federal Home Loan Bank, municipal bonds and Duke University.www.dclt.org
ALBUQUERQUE, N.M.
Starting in the 1980s, rising property values and gentrification were pushing out lower-income residents in this city's Sawmill neighborhood. In 1997, the Sawmill Community Land Trust formed to buy 27 acres from a particle-board factory and develop it as a 99-home neighborhood, the latest phase of which includes artist loft apartments. www.sawmillclt.org
FLORIDA KEYS
Started in 1995, the Bahama Conch Community Land Trust of Key West is Florida's oldest community land trust. It has restored and sold seven homes, and converted another into a rental property, in the city's predominantly minority Bahama Village neighborhood.
Established in 2000, the Middle Keys Community Land Trust in Marathon has acquired a 14-apartment building and built and sold four houses and four town houses. mkclt.org
Interested?
WHAT: Organizers of the proposed Community Housing Trust of Sarasota County will update the Sarasota County Commission about their progress. WHEN: 9 a.m. Tuesday WHERE: 4000 S. Tamiami Trail, Venice