For low-income and working class families, a chance at homeownership through the Community Land Trust model is a promising pathway toward asset development, and for some perhaps their only opportunity. The San Francisco Community Land Trust (SFCLT) is a membership-based, nonprofit organization whose mission is to create permanently affordable, resident-owned housing for low - and moderate-income people in San Francisco. Our vision is to preserve San Francisco's diminishing affordable housing stock by acquiring and converting rental buildings into permanently affordable, limited equity housing cooperatives - an alternative form of homeownership - through which the current residents become owners of the building, while the Land Trust maintains ownership of the land. By separating the building from the land, the units become affordable while SFCLT maintains the affordability requirements in perpetuity. The Land Trust secures the financing for acquisition and conversion, then provides the education and technical assistance to residents throughout the process to ensure long-term sustainability of the resident association and the property. At a practical asset administration and property management level, the Land Trust model of cooperative homeownership is essentially like a conventional homeowners association or tenancy in common.
We believe that cooperative homeownership is a high leverage strategy for helping low-income families build assets. Once a family has secured an affordable, stable housing payment, they are able to focus on paying down debt, building credit, starting a small business, or saving for education or retirement. Asset growth is compounding and the benefits have the potential to ripple out beyond the individual family to broader assets for community cohesion. But the hardest step is to initiate the cycle with a first asset-building opportunity. Homeownership through the Land Trust model is one viable strategy.
San Francisco's current affordable homeownership stock has been dependent on the City's Inclusionary Zoning policy, which requires that new condominium developments include at least 15% affordable units sold "Below Market Rate" (BMR unit). A limited-equity housing cooperative unit is similar to a BMR unit in that both have household income limits and sale/re-sale price restrictions. However, BMR units under the Inclusionary requirements are priced at 100% of HUD's Area Median Income (AMI) (about $90,000 annual household income for a family of four, putting these units beyond the means of many San Francisco families. Additionally these newly built BMR condos often require high monthly association dues which further stretch families at the expense of building assets in other areas. Land Trust affordable housing units enable their resident-owners to enjoy the benefits of homeownership at price points calibrated to their actual financial capabilities, often at income levels significantly below standard Inclusionary Zoning BMR units, and with the possibility of gaining indexed equity appreciation that creates a long term "nest egg" and asset base. At the same time the resident-owners enjoy the benefits of a democratic structure for self-management through the Land Trust model.
The San Francisco Community Land Trust serves all low- and moderate-income neighborhoods in San Francisco, with particular focus on Chinatown, Western Addition, South of Market, Mission, Bayview, and Excelsior. All of these neighborhoods experience high levels of ethnic diversity, low ownership rates (for example, less than 20% of South of Market residents own their housing unit-, while the neighborhood is rapidly being built up with 1000s of market-rate and luxury condos), and majority of income levels below 80% AMI. San Francisco's overall homeownership rate (approximately 38%) lags far behind the national average of 68 percent, leaving the majority of low- and moderate-income residents vulnerable to increasing rents, economic insecurity and the ever-present threat of eviction, and unable to participate in the process of family asset development as a means of economic mobility. SFCLT's unique advantage is its ability to target mid-size projects that other housing developers are unable to make financially feasible. The Land Trust model also enables longer term economic revitalization strategy for low-income communities that have experienced disinvestment and physical deterioration.
In 2006 SFCLT acquired its first project -- 53 Columbus Avenue in Chinatown, a mixed-use property that is home to 21 households, all of whom are Chinese-American families earning less than 80% AMI. SFCLT collaborates with other community organizations to achieve its goals, and in this case the 53 Columbus project is a collaboration with Chinatown Community Development Corporation, Asian Law Caucus (ALC),and Asian Neighborhood Design. The building's resident association is the final partner in the project, as resident participation is core to the Land Trust's homeownership model. After rehabilitation is complete ALC will move into the ground floor commercial space, thereby bringing this valuable community services resource back into the Chinatown neighborhood.
SFCLT's 2009 program goals are as follows:
- Continue expanding the Land Trust's portfolio by creating at least 13 additional new low-income homeowners and units in San Francisco
- Develop a home buyer training program for successful homeownership and property management
- Create partnerships with private developers to leverage more low-income cooperative ownership housing through the City's Inclusionary Housing Policy
- Expand community outreach and SFCLT membership