Attainable Homeownership: The Land Trust Model
Attainable Homeownership in Colorado | By Stefka Fanchi
At Elevation Community Land Trust, we believe that when people have equitable access to opportunity through affordable homeownership, communities, economies, and families thrive. That equitable opportunity is not being provided by the market. In many ways, it feels like this is a new obstacle – that we are fighting for something our parents had, but that is now out of reach. But access to homeownership has never been equitable.
The community land trust model came out of the Civil Rights Movement, when a group of black sharecroppers were evicted from their land and livelihood in retaliation for daring to register to vote. They collectively purchased a tract of land in rural Georgia, which they intended to farm cooperatively. Soon they realized that it was necessary to balance their collective prosperity with the needs of individual farmers and their families. This became New Communities, the first community land trust.
In a community land trust, individuals are able to purchase a home at a reduced, affordable price that does not include the value of the land. The land beneath the home continues to be owned collectively, or by a nonprofit, and is held in trust so that it can only ever be used for affordable homeownership. The homeowner enters into a 99-year, renewable land lease that provides them all the rights and responsibilities for the land. That document ensures owner-occupancy, and permanent affordability through a restricted resale price. Through this model, lower income households can achieve homeownership, build wealth through equity and appreciation, and pass that same opportunity on to another family.
At a time when home prices have increased exponentially, and so many of what were once starter homes are now in investor hands as rentals, community land trusts are more important and more relevant than ever. We are at a critical and precarious time in Denver, in Colorado, and across the nation. As housing becomes a scarce and precious resource, more of our neighbors are falling into homelessness, and those lucky enough to enjoy a stable renting situation have all but given up on the idea of owning a home. We must reframe housing as a human right, and create an attainable pathway for people to become housed, stay housed, and use that stable platform to thrive. Without the option for affordable ownership, we will thrust ourselves further into economic inequality.
Homeownership is the surest route to fiscal stability and intergenerational wealth, but its benefits are not purely financial. Studies have proven that homeowners are more likely to vote, to volunteer in their communities, to engage in their children’s education, and to pursue their own education and growth. They experience less stress, are more likely to have health insurance, and have shorter commutes. At the root, homeownership creates more choices for families. Community land trusts are a tool to control and create those choices, acting as a buttress against outside forces like gentrification and appreciation that displace long-time residents.
Elevation Community Land Trust uses a three-pronged strategy to build a pathway into ownership for those who have been locked out. First, we partner with local governments to identify areas at risk of displacement, and purchase homes in those neighborhoods. Those homes are then rehabilitated, subsidized, and made affordable and available to residents making less than 80% of the area median income. This takes those properties out of the hands of investors and places it in the hands of communities. Second, we construct new homes in desirable areas to increase the stock of homes and ensure they are permanently affordable. Finally, through our new Doors to Opportunity program, we double down on family choice by coming alongside buyers who have found their dream home on the market, buying it with them so that it can be affordable now and for generations.
Since our first home was sold at the end of 2019, Elevation has scaled its portfolio to more than 500 homes in 13 communities, and has 600 additional homes in its pipeline. Over the next five years it is our goal to build that portfolio to 1500 – a 75% increase in the number of permanently affordable homes in Colorado today. We cannot accomplish this important benchmark without partnerships with the State, local communities, charitable foundations, anchor institutions, and large employers providing funding to fill the substantial gap between what it costs to build a home and what is affordable to a lower income household. Elevation also partners with private developers and banks to accomplish our work. We are especially committed to working with developers and contractors led by women and people of color who encounter barriers to entry in the industry.
As much as we are a growing city, Denver is small. We all know someone – love someone – who has struggled with housing instability or has been frustrated in their attempts to become a homeowner. My sister and her family were forced to move out of state for this reason, and I mourn not having them here just as I sympathize with my friend who cannot move despite his growing family. So many Coloradoans have abandoned their hopes and dreams of homeownership. The interest rate environment is doing even more to quash those dreams. The good news is that Elevation and five other community land trusts are working in our state to restore balance to our broken housing system. If you or someone you know is working toward the stability of homeownership, learn more and apply today at www.elevationclt.org, and don’t defer those dreams any longer.
Stefka Fanchi is the President & CEO of Elevation Community Land Trust in Denver Colorado.