By Nick Swartsell
For Reporting Texas
AUSTIN — For 30 years, community organizations in the city have fought rising land prices to maintain affordable housing in their neighborhoods, often by buying, rehabbing and renting out one house at a time.
Today, however, suitable houses are becoming scarce, so neighborhood activists are turning to instruments known as community land trusts. Promoted by state lawmakers and Austin city officials, such trusts designate areas for exclusive use as affordable housing sites and allow property tax exemptions for resident-run non-profits holding the land.
Nationwide, more than 160 community land trusts have sprung up since the first was founded in Georgia in the late 1960s. Several exist in Texas because of the efforts by Affordable Communities for Texas, a nonprofit group that works with community development corporations to help them gain land trust status. So far, ACT has helped establish land trusts in Dallas, Fort Worth, Brownsville and more than a dozen other locations in Texas.
Jo Ropiak, ACT’s program coordinator, said that the land trust phenomenon is catching on. “I think there’s a growing awareness,” she said. “And the need to preserve affordability has definitely grown.”
Austin is hoping to be among the next cities utilizing land trusts to save neighborhood housing. At its Feb. 2 meeting, Austin City Council passed a resolution directing City Manager Marc Ott to begin identifying prospective organizations and start the legal process of naming them community land trusts.
One small nonprofit in Austin getting ready to delve into land trusts is Blackland Community Development Corporation. Operating just east of the University of Texas, where land values and developer interest have been steadily climbing for decades, the organization was born in 1981 from a high-profile fight with the university to keep land in the hands of the Blackland neighborhood residents.
Claiming the new land trust status would allow organizations like Blackland to “lock the properties we have into low-income housing into perpetuity,” said Bo McCarver, the chairman of Blackland’s board. “Affordable housing is a non-renewable resource in gentrifying neighborhoods such as Blackland, and we see land trusts as a tool to retain the affordable housing we have.”
City Councilmember Laura Morrison, who sponsored the February resolution, said that a change in state laws had “opened up opportunities.” The passage of Texas Senate Bill 402, which became law on Jan. 1, allows cities to confer land trust status on nonprofit organiztions and specifies tax exemptions that county appraisal districts must grant.
The move to establish community land trusts in Austin comes as the city faces an increasingly bleak picture for affordable housing. According to studies cited in the Imagine Austin comprehensive plan, the median price of a single-family house increased 90 percent between 1998 and 2008, while the number of houses deemed affordable dropped from 46 percent to 28 percent of overall housing.
Some trust-eligible groups like Blackland plan to rent properties to tenants, who would benefit from land trust status mostly through passed-on tax savings for the organizations, McCarver said.
But the legal designation could also be used to encourage an innovative type of home ownership. The Guadalupe Neighborhood Development Corporation is looking toward a model that would allow low-income residents to buy a house and lease the land it sits on for 99 years, said Mark Rogers, Guadalupe’s executive director. Property tax on the land would be zero. Taxes on the house itself would be assessed by the Travis Central Appraisal District at a reduced rate.
Rogers said “by taking the land costs out of the equation,” the lease arrangement would allow low-income residents the chance to own their own homes, an opportunity that’s impossible for many in Austin as gentrification drives up housing prices and, thus, the cost of property taxes.
Guidelines for housing expense used by most mortgage lenders say owners shouldn’t spend more than three times their annual income on a home. According to real estate site Trulia.com, the average single-family home price in Central East Austin, where Guadalupe is located, was more than $325,000 in 2011. Austin’s median household income is $49,000, less than half the income needed to afford such a home.
The City of Austin is currently supporting more traditional projects aimed at affordable or mixed-income residential development, such as East Side’s Colony Park and downtown’s Seaholm Power Plant Redevelopment, according to Kelley Nichols, neighborhood housing and community development planning and policy manager. But these projects are still in the planning phases. And according to Nichols, it is yet to be determined how many units of affordable housing projects like Colony Park will add.
Community housing developers like Guadalupe have witnessed the signs of the affordability shortage. The organization has 600 applicants on its waiting list, which translates to a roughly three- to five-year wait for affordable housing in the Guadalupe neighborhood, Rogers said.
He said that Guadalupe is eager to put the land trust model into action. “We have about 50-60 land trust houses in the works,” Rogers said, “and then there’s Blackland, Habitat for Humanity and others. That could be a lot of houses.”