California’s Community Land Trusts Aim to Foster New Homeowners
The idea of acquiring a house in California for a price below the market rate may seem like a dream, almost too good to be true. However, Chris and Shekinah Samaya-Thomas managed to turn this dream into a reality a few years ago when they purchased a house valued at $166,000 for a mere $132,000. Today, Redfin estimates that the same house would fetch around $545,000 on the open market. Their real estate triumph wasn’t a fluke, but the result of a partnership with the Oakland Community Land Trust, an organization committed to offering properties at prices below the market rate to preserve affordability.
My co-worker, Claire Fahy, recently penned an insightful article on this intriguing and innovative approach to mitigating the escalating housing crisis in the United States, a method that has seen increasing adoption in recent years.
Community land trusts have their roots in the civil rights movement. They aim to ease the path to homeownership by selling homes at lower prices, albeit with a caveat. While buyers obtain the house, the trust retains the rights to the land underneath. The buyer, in turn, is granted a 99-year lease on this land. When the homeowners decide it’s time to sell, they can’t market the property freely to the highest bidder. Instead, the house has to be sold back to the trust at a predetermined, restricted price. Yet, this arrangement still allows homeowners to accumulate equity according to a pre-set resale formula that the trust outlines.
As Claire highlights in her report, the number of community land trusts across the country has seen considerable growth, nearly doubling from 162 in 2006 to 315 today. Approximately thirty of these trusts are operating in California, stretching from Arcata in the north to San Diego in the south. These organizations strive not only to facilitate homeownership but also to maintain the distinctive character of their cities. An innovative deviation from the conventional model is demonstrated by a community organizer from the Leimert Park neighborhood in Los Angeles, who purchased a commercial property with the intent to rent it out to local businesses at below-market prices in an effort to combat rapid gentrification.
According to Claire, “People are broadening their horizons, seeking more solutions to the housing crisis.” The popularity of these trusts is not only attributed to their role in preserving affordable housing but also to their commitment to neighborhood preservation. Claire believes that these trusts offer an approach that benefits various stakeholders in unique ways.
Many land trusts often purchase homes that require considerable refurbishment, then they renovate these properties to make them livable. Funding for these endeavors is sourced from government programs, private investments, and charitable contributions.
For some, the decision to sell their homes to a land trust aligns perfectly with their values, providing an avenue to contribute to their community. Take the case of a retired preschool teacher who sold her property to the Community Land Trust of West Marin for $500,000, a deal that enabled her to remain in her home for life without the burden of mortgage or maintenance costs. Although her house was valued significantly higher, she is content knowing her choice will eventually help a less privileged family secure a home in the community she has cherished for many years.
In her words to Claire, “Till I die, I stay here. It’s a good deal. But they also got a great deal because they bought my property for half what it’s worth.”