Two things stood out to me in the Angotti/Jagu and Gray texts, one being the fact that I’m still working through how exactly a CLT is maintained financially over time, the other being the biases and debates surrounding the pros and cons of homeownership versus ‘rentership’. Before delving into these topics further, I will summarize the concept behind a Community Land Trust as I understand it: Residential buildings for low income families and individuals owned by a mutual housing organization or cooperative (nonprofit and tax exempt organizations) which tenants control democratically. By various means, CLTs are able to keep the rent affordable, and aim to maintain a low cost of living indefinitely.
The why is fairly clear to me: Mainly, CLTs limit the increasing value of property, which allows low income families to afford housing and stabilizes neighborhoods against the threat of speculative development and gentrification. Not only does this give low-income families a place to live, it also gives them an opportunity to save capital and hopefully exit poverty. The how is a little more complicated. To maintain perpetual affordability, as is the goal of most CLTs, sounds like a nearly impossible task in a location like the Lower East Side. Here is the information I’ve gathered as to methodology: The buildings are often bought for a lower price after being abandoned (rehabilitation), then many rely heavily on subsidies from the government to fund development (this can benefit the government as it limits the need for future subsidies). In the case of the Cooper Square, the developer does not have any land or finance costs, and doesn’t need substantial public subsidies to operate–the rent is so low that most tenants don’t require “Section 8 Vouchers” from the government (part of the federal government’s program for assisting low income families). Therefore most of the few subsidies received by the Cooper Square CLT are through property tax abatements.
Both readings address notions around homeownership and renting. Agnotti acknowledges the ways in which homeownership has been framed as more desirable than renting since the Reagan era; homeownership is a priority of public policy over constructing low income rental housing. Angotti and Gray both acknowledge the mythology around homeownership, citing ideologies such as that homeownership is the “panacea for all urban ills” (Angotti). Gray writes that “Hypothetically, homeownership promotes wealth accumulation, property maintenance, and neighborhood stability and participation,” to which she responds, “however, there are few empirical studies to support these claims.” Renting has historically been portrayed as something for the poor, owning a home as a sign that one has “made it,” despite the fact as Angotti notes that most expensive properties on the Upper East Side are rented. The Cooper Square CLT stresses the benefits of renting for low income families, stating that homeownership, regardless of its possible benefits, is often inaccessible. Gray stresses the idea of renting in a CLT as a means to homeownership, once enough capital is saved, as she acknowledges the known psychological benefits of homeownership including increased happiness and a lower risk of a child dropping out of school or teen pregnancy. The Cooper Square seems to advertise itself as a long-term rental situation, and I wasn’t able to immediately decipher whether/how it also encourages a financial journey to eventual homeownership.
Additionally, Angotti writes that “by producing more housing in multifamily buildings CLTs can achieve economies of scale.” The phrase “economy of scale” refers to the concept in which proportionate savings are gained through an increase in production (I had to look that one up). Because CLT’s help limit speculative development, in theory they limit increases in property value. If housing costs are in relation to the income of the tenants and not in relation to the market at large, does this mean that to maintain economies of scale CLTs have to continuously expand to keep up with the market? And if so, is this actually viable in a place like NYC for the long term? I could really use an economics-informed friend to tell me if I’m on the right track here.
You are 75% on the right track! The main thing you are missing in your definition of a community land trust is the land part. In fact, a community land trust can exist without any housing on it. It can involve gardens, playgrounds, schools, galleries, gyms, retail…whatever. The key is that the land is owned by a community entity that determines how it is used and managed. In this way, a community land trust is an example of commoning as we read a few weeks ago. In the specific cases mentioned in this week’s readings, the CLT exists for the purpose of keeping housing affordable. It does this by purchasing or leasing land, which takes it off the speculative market (i.e. the land value does not increase at the same rate as land elsewhere in the area), and cooperatively managing the housing and retail on the land. For Cooper Square, this means a dual entity — the Mutual Housing Association and the Community Land Trust. Prices are kept low for many of the reasons you cite, including a long-term tax abatement, purchase of city-owned buildings at a time when property value was low, sweat equity, and bulk purchasing of utilities. Prices can only stay as low as they are if the CLT expands, it’s true. But they can stay low even if it doesn’t expand. That can’t last forever because things like gas, electricity, etc. increase in price. But the state and city assistance for retrofitting green technology may help these costs stabilize, so we don’t know yet. As for homeownership vs. rental, there are owners in the Cooper Square CLT; they just receive limited equity upon resale. And wouldn’t you say that all of the benefits of homeownership listed above (except wealth accumulation, which is important, of course!) are satisfied by a cooperative community?