Virginia now has a statewide community land trust. Can it help solve the housing crisis?


Envisioning the face of the affordable housing crisis in the Commonwealth might conjure up images of McMansions or million dollar Richmond townhouses in Northern Virginia that are now selling for 24 percent more than last year.

Few would land in Blacksburg, the charming college town of the New River Valley, best known for being the home of the Hokies. With a average sale price of $ 435,000 and with the typical time spent in the market in less than a day, homes in Blacksburg have become nearly impossible to find. The severity of the crisis sent local officials searching for solutions, making the city of just 15,000 permanent residents the last town in Virginia to experiment with a community land trust.

“We actually have a tighter housing market than NoVA and this is largely due to a lack of supply,” said Kim Thurlow who works on housing initiatives for the town of Blacksburg. “Here, the houses are taken off the market. We are a small university town that is growing very rapidly thanks to the university, the alumni who see our region as a potential investment and, of course, the innovative companies that have come out of the university. If you’re a first-time home buyer, you’re kicked out of town.

One in three parts housing resident engagement process created consensus around the creation of a Community Land Trust (CLT) – a nonprofit corporation that owns land collectively and can buy lots, develop housing and keep it affordable indefinitely. Last year, a steering team made up of Blacksburg, Montgomery County and Christiansburg drew up a business plan, projected the necessary public funding and identified the best areas to invest in, but since then their efforts have been in focus. neutral point.

“Unlike more resourced areas like Richmond and Charlottesville, the fundraising capacity within our community is very low,” Thurlow explained. “Support for the operation of a CLT is not guaranteed here and local fundraising efforts are unlikely to match the operating costs. There are a number of potential funding sources for housing development, but none of them are designed to pay the operational costs needed to have staff who would provide long-term owner support. All the programs that we want to run require manpower.

An affordable price at all times

If the town of Blacksburg and its allies united a community land trust, it would become only the fourth in the state. In 2008, Charlottesville created the Thomas Jefferson CLT – the very first in Virginia. that of Richmond Maggie Walker CLT, which will soon sell its 55th home in a few months, followed in 2016. Virginia’s newest CLT is only a few months old and isn’t expecting its first property until next month; however, while the first two CLTs in the state focused on serving specific regions, the CLT throughout the state of Virginia hopes to attract and protect properties across the Commonwealth.

“This is the brainchild of a few Habitat for Humanity affiliates who have been meeting for several years to discuss how a shared equity model could benefit the work they are already doing to provide access to housing for people with low and moderate incomes. households, ”said Julia McNally, program director of VACLT. “Rather than forming a community land trust that serves only one community, we want it to be a tool that we can mold and shape to fit the many communities across the state served by Habitat for Humanity. and other non-profit housing providers. ”

The two Habitat chapters that played the midwifery role in the new CLT did so out of a desire to stop playing with the state’s growing demand for affordable housing. “Fifteen years after the purchase, homeowners can sell the most affordable homes at market rates, so the price can easily drop from $ 200,000 to $ 600,000 in a place like Loudoun County,” said Erica Sims, CEO of Maggie Walker CLT. “If these units had been owned by a CLT, the affordability would have been permanent. “

CLTs maintain affordability by never selling the land under the unit and sharing the equity gained with the owner when they sell the structure. Although the model developed in rural Georgia as a way for black farmers to protect their land from forced sales and foreclosures that have long kept people of color from getting rich in that country, the CLTs have only recently made their way to Virginia via the affordable housing movement.

“A CLT is a model that tries to separate itself from the housing market because we know that incomes don’t increase with the value of homes,” McNally said. “The community land trust model creates homes whose cost is not allowed to rise as the market increases. It is a radical alternative to conventional home ownership and wealth building that becomes more and more necessary as the housing market explodes. It has become untenable for first-time buyers to buy anything.

In the absence of a CLT, the best affordable housing providers in Blacksburg could have done was 99-year deed restrictions limiting additional sales of affordable units to people earning 80% of the regional median average income or less. “Legally we can’t do more,” Thurlow said. “Although 99 years seems like a long time, whoever owns the property at that point will get a windfall when they can resell it on the open market.”

In a world of limited funding and rapidly growing needs, the loss of a single affordable unit is something vendors are desperate to avoid. This predicament also explains why CLTs have become so desirable throughout the Commonwealth. “It’s a one-time grant that serves homeowners in perpetuity,” Sims said. “You have a home that you make affordable once, then the CLT resale model ensures that those properties remain affordable all the time. It is attractive to have a system that uses grants so effectively.

Obstacles to more homes

Although the CLT model has become extremely popular in housing circles over the past decade, the average number of units held by land trusts nationwide is only 10. With almost six times as many of units in its portfolio and 125 more in the pipeline, the Maggie Walker CLT – Virginia’s largest – is doing better than most, but still falls woefully short of meeting the Richmond area’s growing need for affordable housing. If CLTs are so popular and profitable, why aren’t they growing faster?

“Our needs are the same as any developer of affordable housing – it’s land and money,” said Sims. “. The price I have to pay for the land is critical because I am not just selling a house below the market. I sell it below cost price.

This is why Sims received acclaim when the city of Richmond approved a transfer proposal in May. 15 packages of city-owned land to CLT Maggie Walker for residential development and the creation of community gardens. If Mayor Levar Stoney follows through on his campaign promise donate 38 additional properties to CLT – some of them large enough for large-scale multi-family housing development – the impact could be even greater.

“Municipal land contributions are so important because it eliminates one of our biggest costs in providing more affordable housing,” said Sims. “It’s a difficult thing for the jurisdictions to manage because this land is an asset for them to sell and get money for all the other things they want to do like build schools and infrastructure; However, we are providing a return to the community over time that is far greater than what $ 50,000 can achieve in a single expenditure.

A invoice from Del. Ibraheem Samirah, D-Herndon, who would have granted land banks a right of first refusal and a dollar price on tax-overdue properties in return for their development into permanently affordable housing failed at the General Assembly this year.

One legislative change that affordable housing advocates hope to see come this year is a property tax exemption for CLTs. “If we buy land and build a house on it, during that time we owe taxes on the land and the house, which adds costs,” Sims said. “When we sell the house to the owner, the owner pays taxes on his house like any ordinary owner, but the land below should be exempt from tax to help keep our costs down and allow us to invest that money in construction. more units. “

Currently, the Maggie Walker CLT enjoys tax-exempt status in the three localities in which it operates thanks to their generosity, but a state law would protect this status if the localities change their mind, and it would also extend this support to other emerging CLTs across the state. .

Thurlow is interested in any support her steering committee can get – legislative, financial or otherwise – to help set up a CLT in the New River Valley: “We need a CLT to be that little stepladder in our ladder. housing to get people in to access homeownership and support them enough to access the traditional residential market because without it they won’t be able to get there in our community.


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