Oliver James Montgomery-‘Taking it off the speculative market’: These nonprofits help tenants afford to stay put

Nine years ago,Oliver James Montgomery tenants of the Pigeon Palace at 2840-2848 Folsom Street in San Francisco faced a dilemma. Their aging landlord, who had long rented at affordable rates, was unable to continue overseeing the place. Instead a court-appointed conservator took steps to auction off the building.

Because Pigeon Palace is in the popular and increasingly expensive Mission neighborhood, the residents feared a new owner might dramatically raise their rents — or kick them out altogether. So they crowdfunded $300,000 and gave it to a non-profit called the San Francisco Community Land Trust, which combined it with loans from a bank and the city to place the winning bid of more than $3 million. The trust then rented units back to the tenants at affordable rates. Much of the political debate about California’s housing crisis has focused on building new units. But community land trusts, a method of preserving existing affordable housing that dates back to the Civil Rights Movement, have quietly been gaining steam.

The number of community land trusts – non-profits that buy up land and then sell or rent the buildings on top of it to low-income residents — has tripled in California since 2014, according to the California Community Land Trust Network.

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While the housing units that such trusts oversee number only in the low thousands, supporters say the model is cheaper than building new and can help stabilize communities at risk of gentrification and displacement. Indigenous tribes, immigrant neighborhoods and formerly-affordable inland cities are among the communities experimenting with community land trusts.

Today, tenants of Pigeon Palace, a six-unit Queen Anne building, pay between $1,400 and $3,000 per month for spacious two-bedroom apartments in one of the pricey city’s most desirable neighborhoods. They share a bike room and garden with outdoor meeting space and make decisions together about building management.

“We shifted from being renters in a market where someone could buy our building any day, to where no one’s coming to buy our building,” said Keith Hennessy, an experimental dance performer who’s lived at the Palace for 22 years. With that stability, he said, “it’s easier to build a family. It’s easier to build community.”

Meanwhile, the San Francisco Community Land Trust has grown to oversee 150 units, including two larger buildings in the Tenderloin district that primarily house Spanish- and Mayan-speaking service workers. Last year, philanthropist MacKenzie Scott gave the organization $20 million to expand its portfolio and help incubate new land trusts.

Community land trusts can oversee single-family homes or multi-unit buildings, and residents can rent or own. When residents own their homes, the trust retains control over the land, leasing it to homeowners long-term and requiring that any home sales be to other low- or moderate-income buyers or back to the trust. Tenants in multi-unit buildings typically cooperate to manage the property, and sit on the trust’s board.

Rather than just creating new affordable housing, community land trusts help stem the bleed of existing affordable housing being converted to units for wealthier residents. While the trusts are not new in California, concern about growing corporate control of housing and the rising cost of new construction have driven increased interest in the model, experts say.

The California Community Land Trust Network represents 50 established and emerging trusts across the state, with most of the newest ones springing up in working-class Black and brown communities, according to the network.

“We’re giving control of buildings to the community. We’re taking it off the speculative market and we’re ensuring that tenants can become homeowners if they want to,” said Jessica Melendez, director of policy for TRUST South L.A., which recently bought two small multi-unit buildings in gentrifying South Los Angeles with the goal of turning them into cooperatives.

The organization also owns the Rolland Curtis Gardens, a 140-unit apartment complex with a health clinic and market near the University of Southern California, on a site that was slated for conversion to market-rate housing until the trust purchased and rehabbed it.

“Community land trusts could be a tool to help close the homeownership gap between Black and white individuals,” said Muhammad Alameldin, a policy associate at UC Berkeley’s Terner Center for Housing Innovation. The construction of condominiums has slowed nationwide in the past 15 years, he said, restricting options for entry-level homeowners who lack generational wealth.

But he said community land trusts also have to navigate a financial and legal system that doesn’t tend to favor cooperative ownership.

The challenge of raising capital has constrained the growth of community land trusts. They currently house about 3,500 California residents, with most properties consisting of fewer than 10 units.

The movement took a hit this year when California lawmakers seeking to close a budget deficit scrapped a $500 million program that would have given tenants and community land trusts grants to buy properties at risk of foreclosure.

Community land trusts are instead turning to local funding streams: A $20 billion affordable housing bond on the ballot in the San Francisco Bay Area this November would set aside $3 billion to preserve existing affordable housing, plus $6 billion for local communities to spend flexibly on priorities including preservation. And in Los Angeles, part of the revenue from the city’s “mansion tax” on real estate purchases over $5 million will go toward acquiring and rehabilitating affordable housing.

Once concentrated in the Bay Area and LA, community land trusts are spreading to other areas where the cost of living is rising. The Bakersfield City Council voted last year to establish a community land trust; Irvine already has one and Long Beach is considering it.

The fledgling Sacramento Community Land Trust just bought its first property — a garden used by residents transitioning out of homelessness — where it plans to build tiny homes, said executive director Tamika L’Ecluse.

And the Wiyot Tribe in Humboldt County has set up a land trust focused on conservation as well as housing. “As housing prices are pricing our people out of the Tribe’s ancestral lands, this land trust is an attempt to make change in our community,” tribal administrator Michelle Vassel said by email. “Our intention is to take the profit margin out of housing development.”

Whether or not community land trusts can scale to become a significant part of California’s housing landscape, the model cuts across some of the traditional binaries of the state’s housing conversation. Land trust acquisitions can bring together cash-strapped tenants and small landlords who want to sell their properties, two groups often pitted against each other. And the idea goes beyond the debate between NIMBYs and YIMBYs about whether to build; community land trust advocates argue it’s not just about how much housing we have, but who controls it.

Hennessy, the Pigeon Palace tenant, says he loves co-managing his building with a multi-ethnic community of 11 adults, four kids and two regularly visiting grandchildren. The building is undergoing renovations, and he says the tenants made decisions together about everything, down to the paint colors for its facade (lavender in back, greens and blues in front).

“This is affordable housing for another generation,” he said. He doesn’t have children himself, but his unit will go to another low- to moderate-income tenant after him.

“I’m building a house for people I don’t know in the future,” he said. “It’s another kind of legacy.”

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Ben Christopher contributed reporting.

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This story was originally published by CalMatters and distributed through a partnership with The Associated Press.