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Community Land Trusts

Clarification

[In a move toward greater transparency, the Detroit Land Bank Authority (DLBA) has made information available regarding properties available for auction, property sales, rules for bidding on and purchasing properties  available financing via its website. In this article, the term ‘quasi-governmental’ as refers to an agency that is created and funded by government but operates independently.]

 

By Kathy Ralston, a CDAD Summer 2015 Intern

In the wake of the Detroit bankruptcy, there are many reasons to be optimistic for the city’s future. To the majority of Detroit residents though, most of the economic growth thus far has benefitted only a small portion of the city. Thousands of Detroit residents have struggled for years to maintain ownership of their homes as the traditional economic and political processes of the past 50 years have served to increase income inequality and reduce home affordability throughout the neighborhoods. The struggle continues as Wayne County Treasury officials plan to foreclose on another 28,545 city properties for nonpayment of taxes at online auctions this fall–about 10,000 of these are occupied. Since 2005, 139,699 Detroit properties have been foreclosed, more than the total number of houses in the suburbs Warren, Livonia, Royal Oak, Southfield and Allen Park combined. At the same time, lenders sold foreclosed homes for an average $10,500. This was nearly $30,000 less than what homes were assessed and taxed at.

As thousands of Detroiters are threatened by imminent displacement, the transfer of nearly 16,000 city owned properties to the Detroit Land Bank Authority (DLBA), approved by City Council this spring, is nearly complete. These properties include single family homes, vacant lots and city parks. The transfer is part of an overall strategy by the city for blight removal and remediation. Needed demolition of many blighted structures within the next few years is a main goal of the land transfer strategy. But as a quasi-governmental body, the DLBA is not subject to the same level of public transparency as the city government would be. There is presently no clear communication protocol between the DLBA and community residents with regard to decisions affecting the thousands of former publicly owned properties. Community Land Trusts offer one tool for Detroiters to practice self-determination by ensuring that some of that land remains in the hands of the community, ensuring a grass roots inclusive process for land use decisions.

A group of resilient and innovative Detroiters are collaborating to create community driven alternatives to the displacement of tens of thousands of long term city residents. The Detroit Community Land Trust Coalition (DCLTC) is a group of concerned citizens, homeowners, renters, elected officials, policy experts and researchers whose mission is to support community ownership and neighborhood-driven decision making about land in Detroit. The establishment of Community Land Trusts (CLTs) offers an alternative model to the familiar market and profit driven one that has dominated public policy for the last several decades.

The number of communities throughout the United States utilizing the CLT model are growing. The Dudley Street Neighborhood Initiative http://www.dsni.org/  in Boston Massachusetts has successfully incorporated the CLT model since 1984. The Northern California Land Trust (NCLT) in Berkley California http://www.nclt.org/index.php?option=com_content&view=featured&Itemid=105 is another good example of a long standing dynamic CLT. In Michigan, CLTs have been formed in Traverse City, Boyne City, and Oceana County, among others.

A precise definition of CLTs is elusive due to the variety of structural options but they all have certain characteristics in common. CLTs are nonprofit organizations created for the purpose of securing affordable access to land and housing for the benefit of the community. Typically, the CLT nonprofit owns the land on which homes and other structures or facilities are built, while individuals own the home (or other structure/facility) on the land pursuant to a long-term (usually 89-year) renewable ground lease. A main purpose for the establishment of a CLT is to ensure continued home affordability for the long-term future. In exchange for an initial subsidy from the CLT that is built into the price of the home, the terms of the ground lease place some limitations on the resale of the home—preventing resale to a household that does not qualify as low-or moderate-income, and limiting the sales price to keep it affordable. The lease lays out a “resale formula” that determines the maximum allowable price that may be charged upon resale of the home. Each CLT designs its own resale formula to give homeowners a fair return for their investment, while keeping the home prices affordable. In addition, the CLT has the right to buy each home back for an amount limited by the CLT’s resale formula.

The Detroit Community Land Trust Coalition seeks to redefine development in Detroit along the lines of equity, sustainability, and community principles. To that end, the coalition is currently exploring options to acquire property in Detroit whether through the DLBA or other means, where CLTs can be established. Stay tuned for more articles and blogs on CLTs in Detroit from CDAD in the coming weeks and months.

For more information on Community Land Trusts, see National Community Land Trust Network http://cltnetwork.org/tools/

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