For 25 years, Memphis, Tennessee's United Housing, Inc., has built and renovated hundreds of homes, while helping individuals with everything from repair loans to down payment assistance. But they've always looked for new ways to help, which led to the nonprofit's involvement in a new, community land trust.
The community land trust development model is one for which NeighborWorks America offers support and programs, to ensure homes remain affordable and that communities are not erased in the name of growth and expansion. The model is nonprofit and community-based, exploring public-private investment to keep homes affordable over time. The nonprofit owns the land, while the family who lives on the land owns the home itself. By owning land on behalf of the community, the nonprofit makes the home more affordable.
Meanwhile, the family builds equity and, as the home appreciates, builds wealth. The family keeps the equity in the home, and the home remains affordable for the next buyer, whould the family decide to sell.
How did United Housing begin exploring this shared equity model? With a single home. "We were contacted by a neighborhood group in Binghampton," explains Amy Schaftlein, executive director of United Housing. "We'd been talking about affordability in the neighborhood for a long time. There were long-term renters who'd lived there for decades and they were coming to a place where they wanted to be homeowners."
The community had started looking for its own solutions and in 2017, began meeting to form what would become the Binghampton Community Land Trust (BCLT). "The neighborhood was vulnerable," shares Joni Laney, a leader and BCLT board member. "Developers were working on new, big homes. A number of us said, 'How can we do development without displacement?'"
Laney and others learned about land trusts at a conference in Nashville. "We were a tight community, and we had a willingness to stand with each other. We thought, 'This is a good place to start this model.'"
BCLT sought assistance from Michael Brown of Burlington Associates. Next, they teamed up with United Housing to search for a home. Meanwhile, the rebirth of the neighborhood's commercial corridor, with new arts and restaurants, led to a steep increase in home prices.
"It was almost too late," Schaftlein says. "But we were able to get one house."
The residents inventoried the neighborhood and mapped out 19 homes in disrepair. The home they procured – for $25,000, made possible with a grant from Patriot Bank – is in the thick of what was fast becoming a gentrified community. "The vision is to bring the neighborhood together, to get properties and neighborhood buy-in," Laney says. "I hope this becomes a model for Memphis."
To do the work that needed to be done, the land trust deeded the property to United Housing, which demolished the structure and secured financing with the help of NeighborWorks America to build a new one. They hired a local builder. Volunteers helped in the construction. At the end, they had a house that appraised at $155,000. They sold the home for $100,000, and United Housing will keep funding in the unit, so it remains affordable. "This is the pilot," Schaftlein says. "Our first in the whole city."
When Flor del Rocio Cordova -Puente learned about the opportunity to purchase the home, she and her husband acted quickly. The family of six rented in the Binghampton area for 23 years, she says in Spanish to United Housing staff member Alexandra Matlock, who serves as an interpreter. "What I like the most is that we are close to downtown and to the universities. We have our second daughter in college, and it is very convenient. Also, with the neighbors we have developed a very special relationship and each one takes care of each other."
Del Rocio Cordova-Puente says she was excited to find United Housing and to go through the homeownership process with them. Now that they own their home, "I feel more harmony and even my daughters' faces look happier," she says. "It is so much emotion that I don't even know how to express it."
NeighborWorks America's Shared Equity Initiative began in 2019 to build the capacity of organizations to lead efforts like the one in Binghamton. "Shared equity housing strategies allow communities to put affordable housing in place that will stay affordable for multiple families over decades, even as neighborhoods gentrify and housing prices become completely out of reach to long-time residents," says Director of Shared Equity Housing Shanti Abedin. With shared equity housing, people of color and low-income families can still access many of the benefits of secure homeownership in their own neighborhoods without worrying about being displaced."
Network organizations looking to get into land trusts should know:
- Education is key. "We need to educate the real estate industry about how to appraise these properties," Schaftlein says.
- A bigger acquisition – two houses or more – could make a bigger dent.
- Make sure you have your lenders on board early.
- Make sure the community understands the meaning of a land trust. "For Memphis, this was new, and the community land trust had a negative perception," Schaftlein says. "People thought of the share-cropping part of our history, where land was shared but not owned. We need to make sure that the community knows what it means."
- It helps if the project is community led.
- Make sure you have the subsidy raised long before it's time to sell the property.
Schaftlein hopes to scale up the program. "Our goal is a citywide trust, and to expand and diversify Shared Equity opportunities in other neighborhoods."
Laney agrees, describing the land trust as "a community venture. We want to be one option in Memphis. But we want to have the conversation that this can all be part of a bigger picture."