Land trust is new way

A metro Den­ver ini­tia­tive has $24 mil­lion and aims to se­cure 700 homes for low-in­come fam­i­lies.

The Denver Post - - FRONT PAGE - By Jon Mur­ray

Sev­eral pri­vate foun­da­tions and non­prof­its on Thurs­day gave a more than $24 mil­lion boost to an idea that has gained at­ten­tion from Den­ver af­ford­able-hous­ing ad­vo­cates as a promis­ing way to put home­own­er­ship within reach for lower-in­come fam­i­lies in the metro area.

By form­ing the El­e­va­tion Com­mu­nity Land Trust and com­mit­ting that money, its back­ers aim to cre­ate the largest com­mu­nity land trust in Colorado. Within five years, the new or­ga­ni­za­tion could assem­ble a col­lec­tion of 700 homes scat­tered across the city and its sub­urbs — split be­tween ex­ist­ing houses and new town­homes and con­dos — us­ing a model that re­duces the cost for buy­ers who fall be­low in­come lim­its.

It would do so by hold­ing own­er­ship of the land un­der each home in a non­profit trust in per­pe­tu­ity, leas­ing the land to the home’s owner for reg­u­lar pay­ments. Upon re­selling the house, own­ers would pocket a por­tion, but not all, of any in­crease in the home’s value. Fu­ture buy­ers would face sim­i­lar in­come qual­i­fi­ca­tions.

Com­mu­nity land trusts “sup­port low-in­come fam­i­lies in safely bridg­ing the gap be­tween rental hous­ing and home­own­er­ship, al­low­ing them to in­crease their sav­ings and as­sets, im­prove their fi­nan­cial lit­er­acy and ul­ti­mately be­come more eco­nom­i­cally self­suf­fi­cient,” said Dave Young­gren, the pres­i­dent and CEO of Den­ver­based Gary Com­mu­nity In­vest­ments, which has com­mit­ted $5

mil­lion to the ef­fort through the Piton Foun­da­tion.

Un­like most in­come-re­stricted hous­ing that is made avail­able for home­own­er­ship, the re­stric­tions in a land trust model don’t ex­pire within a few decades, which con­verts homes to mar­ket-priced. In­stead, the land trust pro­vides per­ma­nent af­ford­abil­ity.

Metro-area hous­ing costs have been ris­ing for years, and well be­yond Den­ver’s bound­aries. Oc­to­ber fig­ures from the Den­ver Metro As­so­ci­a­tion of Real­tors showed that the av­er­age price of a home sold was $490,525, up 11.6 per­cent year-over-year.

Many de­tails of the El­e­va­tion pro­gram, in­clud­ing fi­nan­cial re­stric­tions, re­main to be worked out. But its tar­gets for help are fam­i­lies mak­ing 55 per­cent to 80 per­cent of the metro area’s an­nual me­dian in­come, or AMI.

That range spans $36,960 to $53,760 for a two-person house­hold and $46,145 to $67,120 for a fam­ily of four.

Early cal­cu­la­tions for the pro­gram in­cluded a model sce­nario in which El­e­va­tion would buy a home that’s for sale for about $260,000, then in­vest $25,000 in re­ha­bil­i­ta­tion, Gary of­fi­cials said.

By hold­ing onto the land own­er­ship, the or­ga­ni­za­tion would sub­tract roughly $80,000 in value from the mar­ket sell­ing price charged to the qual­i­fied buyer.

“This is a pro­posed fi­nan­cial model that we came up with to make sure that the num­bers could ac­tu­ally work,” said Tracey Ste­wart, the fam­ily and eco­nomic se­cu­rity in­vest­ment di­rec­tor for Gary. “But that’s not nec­es­sar­ily what will hap­pen, be­cause there are a num­ber of vari­ables — in- clud­ing, and most im­por­tant, the vari­able of what the com­mu­nity is go­ing to de­cide. Each neigh­bor­hood is go­ing to have a say in how homes are pur­chased (and) how land is do­nated.”

If suc­cess­ful, El­e­va­tion could set its sights statewide.

The fundrais­ing an­nounced Thurs­day will kick off a plan that is es­ti­mated to cost about $58 mil­lion dur­ing the next five years.

The back­ers plan to seek an es­ti­mated $23 mil­lion in con­tri­bu­tions from lo­cal gov­ern­ments. An ad­di­tional $11 mil­lion could come from new pri­vate part­ners as well as donations of pub­lic and pri­vate prop­erty.

They are start­ing by seek­ing a com­mit­ment from Den­ver’s new $15 mil­lion-ayear lo­cal hous­ing fund.

In­for­mal con­ver­sa­tions with metro-area gov­ern­ment of­fi­cials have been en­cour­ag­ing, Young­gren said.

“There’s a need and a de­sire to cre­ate some per­ma­nent af­ford­abil­ity, and that’s re­ally miss­ing,” he said.

The other ini­tial fi­nan­cial back­ers of El­e­va­tion are the Colorado Health Foun­da­tion, the Gates Fam­ily Foun­da­tion, the Bo­hemian Foun­da­tion, the Den­ver Foun­da­tion, the Mile High United Way and Chicagob­ased North­ern Trust.

The Ur­ban Land Con­ser­vancy is also lend­ing an or­ga­niz­ing hand, and a pres­i­dent and CEO for El­e­va­tion should be in place within a few months as the land trust launches. It could be­gin snatch­ing up for-sale homes later in 2018, but Gary of­fi­cials say those plans will de­pend on the new El­e­va­tion leader’s di­rec­tion.

At the end of five years, Gary of­fi­cials say, their fi­nan­cial model­ing shows El­e­va­tion op­er­at­ing self-suf­fi­ciently from rev­enue that in­cludes land-lease pay­ments and its shares of re­sale prof­its.

On Thurs­day, Young­gren spoke to Den­ver’s Hous­ing Ad­vi­sory Com­mit­tee to get dis­cus­sions rolling with its first po­ten­tial city part­ner about sub­si­dies or other con­tri­bu­tions for the project.

City of­fi­cials have made no firm com­mit­ments yet, and the re­quest comes amid in­creas­ing in­ter­est by Den­ver neigh­bor­hood­based groups in form­ing lo­cal land trusts. There’s also heavy com­pe­ti­tion from var­i­ous pro­grams for Den­ver’s lim­ited hous­ing fund.

“How we stitch this all to­gether with the ad­vice and the ex­per­tise around this room is go­ing to be the next chal­lenge,” said Erik So­liván, the di­rec­tor of Den­ver’s hous­ing policy co­or­di­na­tion of­fice.

Ac­tivists from the north­ern Globeville and Elyr­i­aSwansea neigh­bor­hoods have lined up re­search and part­ners and early plans for a com­mu­nity land trust to help keep renters and home­own­ers in the neigh­bor­hood. They again asked for city sup­port at Thurs­day’s hous­ing meet­ing but so far have had no suc­cess.

Some ex­pressed sur­prise and dis­ap­point­ment with the El­e­va­tion plan, since they had met ear­lier with some of those same foun­da­tions and non­prof­its to dis­cuss their plans. They per­ceived that the El­e­va­tion plan’s strong back­ing and money would push it to the front of the line.

“It’s very con­fus­ing to me why the city would in­vest in fun­ders, ver­sus com­mu­nity, and why the fun­ders wouldn’t in­vest along­side the city in a com­mu­nity,” said Candi CdeBaca, a com­mu­nity or­ga­nizer in Elyr­i­aSwansea. “Or why they wouldn’t pilot this to see if it works first, be­fore they go with a 700-unit model.”

Back­ers of the El­e­va­tion plan say they sup­port smaller ef­forts like the one pur­sued for those north neigh­bor­hoods but want to start a broader pro­gram that ben­e­fits more areas.

Of the 700 or so homes that could be folded into El­e­va­tion’s land trust, Gary of­fi­cials say, about half would be ex­ist­ing homes scat­tered in neigh­bor­hoods that are con­sid­ered “cost-bur­dened” — mean­ing home prices and rents are ris­ing to the point that many cur­rent res­i­dents now spend more than 30 per­cent of their monthly in­come on hous­ing.

In Den­ver, think of West­wood, Elyria-Swansea and parts of the city’s south­east, where home prices are fast in­creas­ing. It’s un­likely that El­e­va­tion would go for homes in more af­flu­ent neigh­bor­hoods such as High­land, Cherry Creek or Washington Park.

“I don’t know, per­son­ally, of an­other ini­tia­tive of fun­der col­lab­o­ra­tives that has come to­gether in Colorado around af­ford­able hous­ing in this big of a way,” said Meghan Si­vakoff, an in­vest­ment project man­ager for Gary Com­mu­nity In­vest­ments, dur­ing an in­ter­view.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.