Land Banks, Land Trusts, and Long Term Affordability
Leveraging Public Land for Long-Term Housing Affordability with Land Banks and Land Trusts
During Accelerator for America’s March and April convenings of our Economic and Community Development Practitioners’ Network (ECDPN), we engaged experts to discuss how communities can leverage tools such as Land Banks, Land Trusts, and Mixed-Income Neighborhood Trusts to create and preserve more affordable housing as Americans coast-to-coast – renters, potential buyers and owners alike – are confronting skyrocketing housing costs.
Our March session, which focused on Land Banks, featured leading experts and practitioners including moderator Anne Fadullon (MAKE Advisory Services and former Deputy Mayor for Planning and Development for the City of Philadelphia), Shawn Carvin (Ohio Land Bank Association), Brian Larkin (Director of the National Land Bank Network, Center for Community Progress), and Sydney Shivers (Director of Housing Policy, City of Chattanooga).
The U.S. Department of Housing and Urban Development defines a Land Bank as a “governmental or nongovernmental nonprofit entity established, at least in part, to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property.” Land Banks are typically enabled by state legislation, with 18 states and Puerto Rico having passed such legislation, and 80% of Land Banks exist in those states. Brian Larkin of the Center for Community Progress, shared an overview of the Land Bank model, as well as how they fit into the broader ecosystem of community revitalization.
While Land Banks are enabled at the state level, Larkin stressed the importance of designing Land Banks to address local challenges with local partners. The primary benefit of Land Banks is to help facilitate the transition of vacant and/or foreclosed properties to productive use with low or no acquisition costs, Larkin noted, adding that local stakeholders must take care in determining which properties are in need of remediation, how they will be remediated, and who will ultimately develop them into affordable housing or other community desired assets because all this requires substantial investment above and beyond the cheap disposition of land.
Chattanooga’s Sydney Shivers shared how the city is using data to identify Land Bank-owned properties in neighborhoods in danger of rapidly gentrifying. The city is using this analysis to issue RFPs for developers to build housing on multiple properties with requirements on the level and length of affordability for the housing that will be built. The Land Banks’ provision of the land at low market value will help subsidize the long-term affordability of the constructed units.
Shawn Carvin of the Ohio Land Bank Association drew from his experience launching, growing, and supporting Land Banks, stressing that to be successful, Land Banks necessarily require strong engagement with local officials. Furthermore, since Land Banks play a key role in the much broader process of returning land to productive uses, they must necessarily engage with other local stakeholders in order to forge partnerships and sustainable funding streams.
A recording of the March ECDPN session is available here.
Our April session focused on Land Trusts and other models for long-term affordability, and featured Erika Malone (City of Seattle), Kavya Shankar and Katrina Chaves (Trust Neighborhoods), and Esther Carver (CEO of Lowell CDC in Fresno, CA).
Seattle’s Erika Malone gave an overview of affordable homeownership models and highlighted examples of how the city has supported affordable homeownership opportunities. She provided background on Community Land Trusts (CLTs), which are non-profit organizations that hold land for the long term to benefit residents of a specific geographic area, often serving as a long-term steward for affordable housing or other community assets. CLTs are typically governed by three sets of stakeholders: community members, leaseholders and homeowners, and public officials or representatives of community organizations.
CLTs commonly utilize a model where they hold land in a perpetual trust while allowing people to buy homes that sit on the land (which can be existing or newly built) through 99-year renewable leases at a low cost. In return, the homeowner agrees to limit the amount the home can appreciate if they choose to sell, ensuring it remains affordable in the long term while allowing for the owner to still benefit from a level of equity and wealth generation. The model also prevents speculation by developers who might otherwise seek to acquire the home and land and replace it with new construction that delivers profits for themselves regardless of the effect on neighborhood affordability.
Kavya Shankar and Katrina Chaves discussed how Trust Neighborhoods partners with community and neighborhood groups to implement innovative "Mixed-Income Neighborhood Trusts" (MINT), which, like CLTs, offers a path for communities to preempt displacement and preserve long-term affordability for residents. Trust Neighborhoods has already established MINTs in four communities and is actively working to implement them in three additional cities.
MINTs are designed to be deployed in neighborhoods that are at a high risk for gentrification in the short term. Typically, a MINT will stabilize a majority of the units in its portfolio at existing affordable levels while developing a smaller number of new units or buildings at market rate. Simply put, MINTs use the upside from these market-rate investments to subsidize the affordability of the existing units. MINTS are also structured to provide equity returns to founding members (residents of the participating neighborhood) as the market rate housing is developed and paid off, providing opportunities for existing residents to benefit from the longer-term appreciation of properties in their neighborhood, even if their specific residence is preserved as an affordable rental.
Each MINT is led and implemented by an existing local neighborhood group and is structured as a perpetual purpose trust, ensuring local community control for the long haul. Typically, MINTs require a mix of philanthropic capital and private investment to provide low or no-interest financing and upfront administrative costs.
Esther Carverof Lowell CDC discussed how they partnered with Trust Neighborhoods and used the MINT model to establish the Central Fresno Neighborhood Trust. Through a combination of city and philanthropic grants and private debt, the Trust acquired three multi-family buildings in Central Fresno, which is home to a large immigrant population and is expected to continue seeing rapidly appreciating land values and rents in the years to come (Fresno experienced a 28% increase in rent prices between 2021-2022).
Lowell CDC is currently renovating these buildings, recently welcomed its first tenants, and is also leading a fundraising campaign to add additional properties to the Trust’s portfolio.
A recording of the April session on MINTs, CLTs, and other long-term models for affordability is available here.
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Accelerator for America’s Economic and Community Development Practitioners’ Network (ECDPN) comprises more than 500 local leaders from 75 cities across the country. Mayors work with a broad network of economic and community development professionals and partners who are critical to the success of a city’s agenda to advance economic mobility. The ECDPN provides these professionals with access to national experts, direct technical assistance, and a cohort of peers who exchange data-driven insights and promising solutions. If you are interested in learning more about Accelerator for America and the ECDPN, please email info@acceleratorforamerica.org.