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Stepping Stones 

Community land trust pitches permanently affordable homes

An example of a net-zero energy home.

Jason Offutt

An example of a net-zero energy home.

As the City of Bend Affordable Housing Advisory Committee prepares to bring its recommendations to City Council at the Sept. 17 meeting, a new nonprofit is entering the scene with the goal of bringing home ownership to median and lower-income Bendites by using a community land trust model.

The kôr Community Land Trust hopes not only to develop attainable housing, but also to provide education about why creating home ownership opportunities for families at and below the median income is important to the stability of the entire community.

Founded by Amy Warren, who owns Green Apple Construction, and Jason Offutt, who designs net-zero energy homes for Shelter Studio, Inc., kôr Community Land Trust is looking at a $1.2 million inaugural project that aims to build 22 homes sustainably designed homes.

"There are many hard-working and needed members of our community who cannot afford to purchase a home here," the community land trust board explains in a release. "We recognize the value that these citizens have in our community. They work in our grocery stores, our libraries, our schools, our recreation facilities, and in our restaurants—just to name a few. We all need these people and the jobs that they perform."

According to Warren and Offutt, the median home price in Bend ($288,900) is out of reach of household making the median income ($47,576). And while the phrase "affordable housing" often conjures up images of Section 8 subsidized housing "projects" in sketchy neighborhoods occupied by people subsisting on government welfare, the reality is that, by definition, half of the community falls on the "wrong" side of the median income tracks. Case in point: teachers. The median income for a Bend public school teacher, according to the community land trust founders, is $46,065—less than the overall median income. A household with two full-time minimum wage earners only makes $37,856 a year—less than 80 percent of the median income, or "low-income." And a single parent working a minimum wage job brings home just $18,928 each year—less than 50 percent of the median income, or "super low-income."

The community land trust plans to offer a quarter of their homes at market value (within reach of those at or near median income), 40 percent to low income qualifiers, and 35 percent to those in the super-low income bracket—just as soon as it raises some seed money and secures the land.

Warren says the idea for the community was conceived before she and Offutt knew how they would finance it. The two friends had daydreamed about designing a sustainable housing community with net-zero energy homes and net-zero water landscapes. But when she penciled out the numbers, she realized that even without taking a profit, the homes would be unattainable for those who need them most. It was a grant writer who first introduced her to the idea of community land trusts, using Orcas Island as a prime example.

"They came to a realization in the early '80s that the people they valued in the community couldn't afford to live there," she says. So they start a community land trust.

This model, also referred to as ground leasing, enables lower-income residents to purchase a home at a permanently affordable price. How do they do it? For starters, the land is owned by the trust, not by the homeowner. Second, the price is determined by an equation based on percent of the median income. And finally, to keep the home affordable in perpetuity, homeowners receive only a portion of the equity when they decide to sell the home.

As a result, depending on the available financing options, people who would ordinarily be priced out of homeownership can get into a home—often in a desirable neighborhood—at a substantially lower cost and, sometimes, without any down payment.

"They're just one more tool. I'm not going to say it's a be-all, end-all," says City of Bend Affordable Housing Manager Jim Long of the community land trust model. "The downside is, you never do own the land. You're basically just a tenant."

While there are no other active CLTs in Bend, there are organizations that use the ground lease model on occasion, such as Housing Works—the housing authority for the tri-county region—and its nonprofit arm Families Forward. Like when West Bend Property, LLC, approached Families Forward looking to donate a lot.

"We're not technically a community land trust," says Housing Works Client Services Manager Kelly Fischer "but we used a community land trust agreement [and] we sell our homes to an 80 percent median income."

She says that some people, especially those coming from a rural background, sometimes struggle with the idea that, under a ground leasing agreement, they will never own the land. Another challenge is that there is a shortage of local lenders who understand how community land trust agreements work. But Fischer says if kôr Community Land Trust does a larger volume of properties—Housing works sells one such home every year or so—it may help acclimate area financial institutions to the process, making it easier for prospective home buyers to finance ground-leased properties.

"I think it would be great if an organization comes in and does this 100 percent," Fischer says. "Hopefully they will do some education around why it's important."

Amy Warren, kôr Community Land Trust co-founder, says she knows that the concept could use some promotion. After all, she hadn't heard of a CLT until recently.

"The number one thing is getting the word out there. I have yet to meet someone else who knows what community land trust is. Awareness is pretty big," Warren says. But, she admits she's an optimist, adding, "I truly believe if enough of the word gets out...the right people and businesses will step forward and support it."

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