This past week marked an exciting development in affordable housing policy in NYC. HPD has announced that it will give $1.65m through a grant program from Enterprise Community Partners to four groups to develop or expand community land trusts around the city. Though it is a small amount of money, it is a giant step for the city and could serve as a larger evolutionary step in housing policy. What happens next with these groups will be important, but undeniably a new policy tool has entered into the housing debate. There are many reasons to celebrate this and I’ll outline four today.
A Community Land Trust is an alternative form of ownership that separates the value of land from the value of the shelter on it. It does this by placing the land in a community-controlled trust that removes it from the private market permanently. This separation removes the speculative nature of real estate from the cost of shelter, maintaining a consistent level of affordability.
CLTs have been around, notably in Burlington, Vermont, for decades, but have had limited support and awareness in NYC. One of the groups receiving funding is Cooper Square, the only current CLT in the city. Its success over several decades has played a considerable role in getting the city to believe in the model.
Along with Cooper Square, the other three groups are Interboro CLT, a new partnership of organizations, East Harlem/El Barrio, a brand new tenant CLT, and the NYC Community Land Initiative, the long-running regional group dedicated to helping groups form CLTs. These groups, along with the New Economy Project, have been working on getting to this point for years.
I’ve always believed CLTs could work in NYC (and worked with NEP back in 2012 on a CLT project) because there are so many opportunities with the right combination for success: organized community groups and lots and lots of small, existing properties. Given how the Mayor has put such a priority on affordable housing and has tried to frame it as a vehicle for community control and inclusive growth, community land trusts are a no brainer. Let’s turn to why.
1. They are Really Cheap
As an affordable housing tool, CLTs are really inexpensive because they rely on existing housing stock (but can still create new development), which is always going to be cheaper than new construction. The basic model would include a single, upfront subsidy provided through an agency like HPD, or potentially a non-profit like ECP, to purchase a parcel or parcels of land to turn over to a CLT. After that contribution, CLTs are effectively self-sustaining. (There are legitimate questions about how much subsidy is needed in addition to land costs to make individual units even more affordable, but these are best left to individual cases.)
Compare this model with our current reliance on market-based solutions that cost hundreds of thousands of dollars per unit. As I mentioned in last week’s blog, the mayor’s plan relies on tax incentives that make each new “affordable housing unit” come in at between $400,000-$600,000. Spending billions of dollars on building new units at that cost just doesn’t make sense and will never produce the number of units the city needs.
So much focus has been put on new development and the need to create more density that we forget that preserving existing units in many neighborhoods accomplishes the same affordability goals for a lot less money and in a shorter time frame. It’s estimated that over the next few years, 100,000 affordable housing units will be lost to deregulation and vacancy decontrol. Think of what a difference putting those units into CLTs would make for overall affordability and think about how quickly and cheaply that could be accomplished. It is stunning.
2. They Prevent Displacement
Another complimentary feature of CLTs in NYC is that they are likely going to be most effective in neighborhoods that are on the brink of gentrification but haven’t seen new development or upzoning yet. The land will still be affordable in most cases, keeping the subsidy cost low.
More importantly, establishing a CLT will allow existing residents to remain in their communities. The logistics of converting a market-rate, or even rent-stabilized building, into a CLT is seamless and doesn’t involve tenants moving.
New construction generally means displacement when an old building is torn down, with very little likelihood of those tenants returning. New construction also begets more new construction, which drives the speculative nature of real estate into new neighborhoods. Very few existing residents benefit under this dynamic (although its complicated.) Even building on empty lots under the current model makes it difficult for existing tenants to have access to new “affordable” units.
By allowing existing residents to remain in their homes, especially renters who don’t have the benefit of equity gains as neighborhoods gentrify, even low-income residents have the opportunity to benefit from the positive aspects of growth and new development. Rather than continue with a generally zero-sum development pattern, CLTs allow neighborhoods to have more inclusive growth.
3. They Provide Community Control
Along those lines, CLTs are the ultimate tool for community control. They allow residents to have a larger say in their neighborhoods through the voice of the CLT. Renters in particular are generally underrepresented as stakeholders in an area, but as members of a CLT, they become more powerful advocates.
To be clear, I don’t see this as a NIMBY/YIMBY issue. Community control doesn’t mean community resistance to change. The dynamic now, and why so many neighborhood groups do resist any change (although with limited success in reality), is that development doesn’t help existing residents. Who would want to allow massive disruption in their neighborhood that will probably result in having to move at the end of it?
When long-term residents have the ability to be part of the long-term change in their neighborhood, when they can rightfully envision their futures’ there, then it becomes less about resisting and more about shaping. The end result is a more economically, socially, and politically dynamic neighborhood which is what the whole city should look like.
4. They Compliment Private Development
A big point of supporting CLTs that I want to make clear is that they are a complimentary piece in a larger policy toolkit. I don’t think they are a panacea or even appropriate in every instance. But having them as a pillar or at least an option creates more space in housing policy for community control and non-market solutions. This can eventually allow more resources to go into new construction of private or public housing with government assistance. It’s all connected.
If we can create a policy frame work for CLTs that allows a significant number of units to be preserved at a very low cost, that leaves more room and potentially more money to drive new development in more targeted ways.
I’d rather see some of those billions of dollars the Mayor has allotted to subsidize private development used to improve the subways and buses. A better transportation network extends the housing options for all New Yorkers. I’d rather see it go towards supporting NYCHA, which houses over 400,000 New Yorkers. Pubic housing has been a vastly successful government program that should continue to be a priority. Finally, I’d rather see our public funds going towards building working class and middle-class housing where it is needed rather than subsidizing luxury construction in glitzy parts of Manhattan.
The total amount is modest and the details of how the model could work in NYC still need time to develop, but trying community land trusts in NYC should excite everyone concerned about affordable housing and the future of NYC. Provided with the right support and deployed in the right areas, CLTs could be a major evolutionary step for the city as it struggles to solve the affordability and homelessness crises.
Pete Harrison is the CEO/Co-founder of homeBody. www.joinhomebody.com @peteharrisonnyc