Community land trust one potential solution to housing crisis

WALLA WALLA—The housing crisis in the Walla Walla region has reached a tipping point. Thankfully, this problem is not unique to the region. With a decrease in affordable housing across the nation, community-based groups have been experimenting with creative solutions to alleviate the problem. These efforts to provide access to safe, comfortable housing to low and middle-income families have led the charge for communities like ours.

In 2018, the Walla Walla Community Council (WWCC) recognized that access to affordable housing had become increasingly challenging within the community. They conducted a region-wide study to assess cost-burdened homes and rentals, housing availability, and housing-associated costs.

The study found several areas of concern, including a high percentage of the region’s renters are considered cost-burdened, as defined by the Department of Housing and Urban Development (HUD). HUD defines affordable housing as no more than 30% of pre-tax income.

According to the WWCC assessment, 52% of renters in Waitsburg are financially burdened by housing costs. In Dayton, 46% of renters were living in cost-burdened housing. In Prescott, a steep 81% of renters were residing in ‘unaffordable-by-definition’ homes.

Housing costs have been rising steadily for the past five years, jumping nearly 45%, according to data from the Walla Walla Community Council, while overall wages have increased only 17%.

Since wage increases are not keeping up with rising housing costs, more families cannot afford to live in the area.

The affordable housing issue is not exclusive to rentals. Homeownership has become less accessible to many middle and low-income families. In Walla Walla County, the average cost to build a new home is around $285,000. Purchasing a home has an average price tag of $285,000 to $300,000. However, low to moderate-income families (or individuals) can afford $140,000 to $230,000 without becoming cost-burdened, according to HUD. The median sale price in Walla Walla is $301,600, as of January 11.

A household of four, earning the Walla Walla average median income (AMI) of $69,000 a year, can afford a mortgage payment of $1,750 (or a 30 yr. mortgage of $295,000). The same size household making 60% of the AMI can afford a monthly payment of $1,050 (or a 30 yr. mortgage totaling $170,000).

On January 16, the internet online real estate app Zillow listed two houses and two mobile homes for sale in Walla Walla, priced within the affordable scale for low-medium income buyers. The houses were priced at the high-end of the ‘affordable’ scale between $228,000 and $229,000. There was one home listed in Dayton, no homes available in Waitsburg, and eight homes available in Milton Freewater that were within the affordable range.

So, what is a community to do? WWCC’s findings and strong recommendations from many involved in the study suggest creating a community land trust as one option to help alleviate the increasing problem.

Community land trusts are non-profit organizations that purchase and develop land to provide permanently affordable housing within the communities they serve. After developing the land, the trust sells the homes and leases the land to the homebuyers. This makes the purchase price more affordable as the homebuyer is buying only the house, not the land.

When homeowners wish to sell the home, they agree to selling at a restricted price, keeping the house affordable in perpetuity.

Common Roots Housing Trust has been created as a direct result of the Community Council’s housing assessment performed less than three years ago. While still in its early stages, steps have begun to purchase or receive by donation, property throughout the Walla Walla region. The trust’s long-term plan is to develop permanently affordable low to medium-income housing.

The effort is being led by local community members, including Rachel Elfenbein, Community Council Advocacy Coordinator, and Catherine Veninga, Community Council Study Coordinator. Established organizations, including the OPAL Community Land Trust on Orcas Island, are providing guidance to the new trust.

Right now, the Common Roots Housing Trust relies on volunteers for staffing. Blue Mountain Action Council (BMAC) is currently serving as the fiscal sponsor. The housing trust has already secured several small grants and continues to apply for more grants as the concept gains local traction.

According to Eflenbein, the first step is to hire a dedicated staff member to handle all coordination efforts. Funds are currently being raised to fill the position, but until then, Elfenbein and Veninga are the acting volunteer employees. One major role of the new CLT employee will be to prepare documents assisting potential homeowners during the buying process and maintain records that align with most lenders' needs to streamline the loan process. Last Monday, January 11, during the town hall meeting to introduce Common Roots to the community, attendees heard from Julie Brunner, housing manager from the OPAL Community Land Trust. Brunner described how land trusts work and specifically her organization’s program on Orcas Island.

To build the assets for the trust, Common Roots must obtain land. As a non-profit, the trust can purchase the land with donated funds or accept land donated to the trust directly. In 2020, Governor Inslee signed into law two bills that simplify donating low-value surplus property by city-owned utilities. In an interview with The Times, Elfenbein mentioned that Common Roots are in early discussions with the City of Walla Walla about a potential property. They have also begun working with the Port of Columbia concerning potential land in the Dayton area. She said that a multi-jurisdictional commitment to solving the housing crisis is very exciting.

The next step would be development. Because the homes are being built to last, Brunner noted that most CLTs are willing to pay for high-quality products and focus on energy efficiency. Once the development is finished, the homes would be offered for sale. The land trust would lease the land which the home is built on, for a modest fee, to the homeowner. The lease would grant exclusive use to the owner.

“We separate the title to a home so that the homeowner buys the house, but the community land trust maintains ownership of the land underneath that house,” said Brunner. “The homeowner then enters into a 99-year lease with that community land trust, to have sole and exclusive use of the land while they own their home.”

The lease is ‘balanced,’ meaning that it is not structured to represent the landlord, like a typical lease. It is geared towards balancing the interest between the community trust that owns the land and built the home and the homebuyer. One interesting element of most CLT leases is the provision that the lease can be passed on through inheritance.

“When we talk about ongoing affordability, it is really this idea that in exchange for buying a house at a below-market price, the seller agrees to limit the price at which they can sell that home in the future,” Brunner said.

At last week’s town hall, one listener asked Brunner how the CLT ensures homes are maintained and how the CLT enforces upkeep. Brunner explained the homeowners are required to maintain the home, and it is enforced through the lease.

“There is a provision in there that says, ‘before you sell your home, the buyer gets an inspection, and you need to fix anything that is broken,’ Brunner said.

She explained that OPAL has long-term maintenance reserves, funded by small fees from community homeowners; OPAL has a $50 per month fee attached to its homes that goes to the maintenance reserves, which is available to assist homeowners during large repairs, like replacing a roof. Depending on the lease, HVAC systems and other homeowner improvements may be reimbursable to the trust upon the house's sale.

So, who is eligible and how does a CLT determine eligibility? According to Brunner, there are income qualifications that you must meet when purchasing and selling, which will vary from trust to trust. Once you own the home, however, there is no limit to wealth, and the land trust does not ask about wealth or income after the sale.

Brunner shared a light-hearted story of one OPAL resident who won a three-million-dollar lottery. The resident, who opted to sell their OPAL home, could have stayed.

“She could have kept her home, and that is really important to us. That is one of the tenants of homeownership- the fact that you don’t have to move anymore, ever again if you choose, is really foundational to homeownership, and we want to protect that,” Brunner said.

She also shared that homeowners may leave their home to anyone through inheritance like in a traditional home. If the home is left to someone other than a child or spouse, the new homeowner will be subject to the same income qualifications to live in the home. If they do not meet the qualifications, they must sell the home to a qualified homebuyer. The seller would receive the proceeds from the sale.

According to Brunner, any size lot is acceptable. She shared that OPAL just purchased a 30-acre lot. They have also received small-lot donations suitable for 800 square-foot houses. The land has to be within the CLT’s service region.

Common Roots Housing Trust follows the lead of communities like the OPAL Community Land Trust to provide affordable housing for families in the Walla Walla Region. If you would like to get involved, whether in leadership or monetarily, contact Rachel Elfenbein at relfenbein@wwcommunitycouncil.org.