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Land trust proposed to keep North Side affordable
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The city's first neighborhood land trust to assure affordability for generations of homeowners has been proposed on the Central North Side.
The neighborhood, which includes the Mexican War Streets, would join a growing number of neighborhoods, towns, counties and cities that have set up trusts in response to a housing crisis facing poor and working-class people.
Joan Kimmel, a board member of the Central Northside Neighborhood Council, said a trust would sustain properties through generations of low-income homeowners. The trust, as a nonprofit, would be the land owner and ultimate steward, but the homeowner could build equity during the time of his residence. Property values would keep pace with the rise in median income and inflation, "but not market inflation, which is the whole point of having a trust," said Ms. Kimmel.
The Central North Side, where some housing prices have shot through the roof in recent years, has not determined its model. The council says it wants neighborhood input for that and will hold numerous meetings within the next several months to get it.
Ms. Kimmel used the example of a 99-year lease that could be renewed and handed down to the next generation -- in effect, a home ownership with stipulations. The trust would have the right to reject predatory lenders and to require the home owner to save for maintenance.
Contracts between trusts and home buyers vary by situation. One contract could look very much like that of a condo association, whose fees pay for maintenance. The resident owns the living quarters but the trust has authority over sales. In some scenarios, profit from resale may be limited so that someone else who makes, say, less than 60 percent of the area's median income could afford to buy it
Steve Shivak, executive director of the Pittsburgh Community Reinvestment group, said he knows of no other neighborhood land trust locally.
Ms. Kimmel said the Central North Side will rely on the nation's most successful templates and the input of neighbors. Members of the board who attended a national conference on land use in the fall will share their information at eight to 10 upcoming small-group meetings throughout the neighborhood.
Michael Barber, executive director of the council, said he hopes to mobilize people "to knock on doors" to include people who are not heard at meetings.
The land-trust concept is exciting on many levels, said Ms. Kimmel. One is that the chance for first-time home owners to inculcate home-ownership standards in their children.
"It will be a way for families to begin creating wealth," she said, adding that the trust would likely have "a social work component so people are not left hanging if they get into trouble." A trust, in effect, is a snub of predatory lending that has swept through this country, she said.
A trust, however, would not make the process of acquiring properties any easier.
"It will be just as difficult" dealing with old liens and trying to amass money to buy properties, she said. The difference would be having control of properties the council pays to renovate.
Ms. Kimmel said the Central North Side has roughly 150 vacant properties. Those that have been derelict for years would be targets of the trust. Some new housing allotted for low-income people may also be secured under the trust, she said.
Land trusts are common in other countries as conservation tools. The first community land trusts in this country date to the late 1960s, but they have become a hot trend this century in response to the affordable housing crunch, said Lisa Byers, chairman of the board of the National CLT Network.
There are now close to 200 CLTs, she said, and their scope includes Chicago, Portland, Ore., Durham, N.C., and Austin, Texas. Even the Mayo Clinic, eight years ago, invested in a community land trust to make homes near the clinic affordable to mid-level employees.
Chicago is the largest city covered by one land trust. It was set up as a quasi-government body. Portland helped create its trust, then let it go independent, Ms. Byers said. She heads a trust on Orcas Island, Wash.
"Trusts are a proactive move to reduce the amount of debt a household has to take" and are especially relevant with the recent wave of foreclosures due to predatory lending, she said. "The most volatile component is the cost of land in most cases, so if you can get the price of land out of equation, that can significantly reduce the cost."
Many trusts remove the land value from the property cost, and if the savings are significant enough to the buyer, the "dues" or savings requirements are easier to satisfy. Land values in many Pittsburgh neighborhoods are drastically lower than in many cities, and the targeted properties will cost a lot to fix up.
"That's one reason the trust would like to build earned income," to afford renovations and to keep the homes affordable, said Ms. Kimmel.
Earned income can come through gifts of properties in estates, she said.
Ms. Byers said long-term maintenance funds are critical to the success of a land trust.
Local, state and federal grants can help get trusts started and help them acquire land. Those are the same sources neighborhood groups rely on for a variety of long-term initiatives that end up having short-term lives.
"For decades, we have used government funds to provide affordable housing that we are seeing last only one or two decades," said Ms. Byers. "Now the sense is that, if we are going to invest taxpayer dollars for affordability, we need to make it last."
First Published January 21, 2008 12:00 am
