Over the last several years, we have seen growing interest in community land trusts nationwide, especially in California. People have become increasingly frustrated with a housing system that is unable to deliver housing that is affordable or respond to resident needs for self-determination and meaningful control over their homes. Community land trusts, housing cooperatives and other forms of community ownership have existed for decades, but they are garnering even more attention today from advocates, legislators, and Bay Area residents.
Through the Family of Funds inthe Partnership for the Bay’s Future1, LISC Bay Area has been proud to partner with some extraordinary groups in this space, including community land trusts (CLTs) like the San Francisco Community Land Trust (SFCLT), Bay Area Community Land Trust (BACLT),Oakland Community Land Trust (OakCLT) and South Bay Community Land Trust. We’re excited to highlight two projects LISC helped support, where tenant organizing led the way for land trust acquisition.
Project Profile: 285 Turk
SFCLT recently acquired 285 Turk, a 40-unit acquisition/preservation project in the Tenderloin neighborhood of San Francisco.The residents are mostly low-income people of color (primarily Filipino and Latino),seniors, disabled people and working families. Because the building was exempted from San Francisco’s rent stabilization law, residents faced a high risk of displacement from massive rent increases, especially if/when the owners decided to sell.
Tenant organizing gained momentum in the building when the last owner proposed a 70% rent increase in a single year. Tenant leaders and the Filipino Community Development Corporation (FCDC) organized with residents, engaging in dialogue and negotiation with the propertyowner. After a campaign of four months, the tenants successfully stopped the rent increase.
The next step was to find a long-term solution for the property. Tenants who had been working together to preserve their homes were interested in making the project cooperatively owned, and the building was toosmall to access low-income housing tax credits andtoo big to access the San Francisco Small Sites program. These factors led to a partnership with SFCLT.
With the help of Self-Help Federal Credit Union and the Bay’s Future Fund/LISC Bay Area, SFCLT was able to acquire 285 Turk for $10.4 million. Saki Bailey from SFCLT noted that a key aspect to making the financing work was that SFCLT was able to leverage its track record and experience with its small sites portfolio to (a) borrow funds from Self-Help and LISC and (b) gain access to private donor dollarsthrough the Solidaire Network and Kataly Foundation. These sources do not preclude or limit the future ownership structures envisioned by the tenants and SFCLT.
The next step for 285 Turk will be to form a limited equity cooperative. SFCLT’s Columbus United Cooperative, a 21-unit building occupied by majority first-generation Chinese and Chinese Americans in Chinatown, has already taken the step to become a limited equity cooperative. It took five years to go from advocacy with tenant organizers to identifying seven funding sources to complete the $7.6 million acquisition to achieving financial sustainability and forminga co-op. SFCLT has identified that resident education and outreach played a critical role throughout.
Project Profile: Avenida 29
OakCLT similarly identified the critical role of tenant leadership for Avenida 29 in its journey toward being acquired by the community land trust. A 14-unit Fruitvale building constructed in the 1980s, Avenida 29 was exempt from Oakland’s rent control ordinance. After the landlord had significantly raised the rents and continued to fail to provide adequate building maintenance, the tenants went on a rent strike starting in 2019 and lasting for more than two and a half years. Eventually the rent strike resulted in the landlord agreeing to sell the property to OakCLT in 2022. The City of Oakland Measure KK funds and the Bay’s Future Fund were both key sources for the $3.3 million acquisition of Avenida 29.The individuals on the project team – including staff at OakCLT and the City of Oakland – exhibited extraordinary creativity and resourcefulness that were critical in making a complex CLT project like this one work. OakCLT’s next step is to complete a small rehab scope at Avenida 29 to address some of the building maintenance issues that have been problematic for the tenants.
Another OakCLT project that was underwritten alongside Avenida 29 is a 4-unit project on34th Avenue in Oakland that is slated to convert to affordable condos, with OakCLT maintaining long-term affordability by retaining ownership of the land. LISC Bay Area was able to lend to the 34th Avenue project in part because the combination of LISC’s local knowledge and national experience made it possible to underwrite to homeownership scenarios that are more unfamiliar or atypical to most Bay Area multi-family affordable lenders. LISC National’s experience in 38 sites across the country, including Washington, DC, Detroit and New York, includes many co-operatives and homeownership projects, and LISC also has deep experience lending to smaller projects, which have historically been less common in the Bay Area.
Lessons From the Work
As interest grows in community land trusts, limited equity cooperatives and other community ownership structures, what are key lessons from the stories and experiences of our colleagues? What does this community know now about CLTs, and how do we support more innovative, tenant-led work?
1. Tenant leadership is key
The projects profiled here and in the October 2022 webinar all came to fruition because of the leadership of tenants. Tenants and tenant organizers challenged landlords and brought these cases to the public, to the media, and to elected officials, shining a light on the importance of taking action, and investing in these projects. In these cases, tenants not only fought for better conditions, but also identified and sought out groups that might acquire these buildings and be able to obtain financing, starting with community-based nonprofits and landing with community land trusts.
Lorenzo Listana, a tenant organizer with Filipino CDC, who organized with tenants at 285 Turk Street, suggested that organizers need to be proactive. It’s ideal for tenants to be organized and ready even before the opportunity to purchase a building arises. If they are planning to exercise a formal right to purchase (like the Tenant Opportunity to Purchase Act in Washington, DC, or the Community Opportunity to Purchase Act in San Francisco) the legal timeframes are short and difficult for anyone to meet, so an organized resident community can really make a difference.
Providing support for tenants, includingthe staffing to support resident outreach and engagement, is critical to supporting the long term work it takes to build relationships and trust and can also help provide infrastructure for future efforts. Going further, government and philanthropy in particular arepositioned to provide ongoing resources for tenant organizing that bothaddress immediate needs like unsafe conditions and unfair practices and also lay the long-term groundwork for true tenant decision-making when the opportunities arise.
2. Innovative financing solutions are in demand
Community land trusts can find it difficult to use typical funding sources for affordable housing. For example, tax credits are a major source of funding in CA but are highly competitive and projects generally have to be above a certain size to successfully compete. Accommodating some of the features common to community land trusts – such as the ground lease and shared decision-making between the land trust and resident cooperative – can be hard for lenders to underwrite when they have little experience in this space.
With the Partnership for the Bay’s Future Fund, LISC Bay Area was able to offer loan terms that fit what the CLT projects needed, in terms of the partnership with Self-Help, relatively lower interest rates, and the extra underwriting flexibility that the Bay’s Future Fund offered.As the Bay’s Future Fund comes closer to being fully invested, investors and lenders should be working together to use existing lending resources and raising new funds with more flexible underwriting guidelines and lower interest ratesto expand the pool of financing options for CLTs.
Philanthropic funders with strong values-alignment like Solidaire, a network of wealthy donors, and the Kataly Foundation have also played an important role in flexibly filling the funding gap for projects that use community ownership structures.
3. Barriers for CLTs are still significant
While the CLT model is attracting a lot of interest, and individual projects are succeeding because of the hard work and persistence of tenants, CLTs, advisors, lenders and other partners, we have a housing ecosystem that doesn’t currently support this work at scale. Steve King of OakCLT calls for more people to jump into this work, to do more projects andadd to the chorus for changes to add resources to the affordable housing landscape in ways that also allow the CLT movement to grow.
The push for Opportunity to Purchase legislation has gained a great deal of momentum in the last few years, and cities are raising new sources of subsidy to support preservation and the CLT model. Currently, Washington DC,San Francisco, and Chicago are the only places with COPA/TOPA programs up and running. Several other communities are actively pursuing or considering COPA/TOPA programs, but they need to be paired with resources for tenant organizing, capacity building for community partners to ensure the equitable implementation of the policy throughout jurisdictions, subsidies to preserve deep and permanent affordability, and fast, flexible, and affordable financing.
LISC Bay Area and the Partnership for the Bay’s Future are pleased we have been able to partnerwith strong CLTs in the San Francisco Bay Area. We plan to make community ownership models a priority as we look to the future.
For the October 2022 webinar recording, slides and other resources: