City Looking Into Community Land Trust to Provide Affordable Housing
To help ease the issue of affordable housing in the area, Reno's City Council unanimously voted to give the green light to city staff to take a closer look into what's called a Community Land Trust. The land trust would provide options for families to buy houses at well below the going market rate.
To help ease the issue of affordable housing in the area, Reno's City Council unanimously voted to give the green light to city staff to take a closer look into what's called a Community Land Trust.
The land trust would provide options for families to buy houses at well below the going market rate. Paul McKenzie, Reno City Council Ward 4 explains, "We're providing a housing model that people of lower or moderate income can afford, given the escalation of housing prices in our area."
So how does it work? First, housing (single family or multi-family) is built on a vacant lot of city owned land or land leased out by the city for the long term, think 99 years. Those houses are then sold outright to homebuyers, typically priced to match what they can afford, according to their income.
The land underneath those homes, permanently belongs to the land trust, however. So, residents then pay an annual fee to the land trust to support ongoing operations.
When that homeowner decides to move and sell the home, their house sells at a price set by the land trust. The owner makes a small profit off of the equity gained while they lived there, and the rest stays with the land trust.
For example, if a structure is bought for $100,000, then appreciates in value to $150,000 by the time of move out, approximately 20% of that gain goes to the homeowner. So, the homeowner would see a $10,000 profit. The rest of the $40,000 would stay within the property to continue making the home affordable for future buyers.
As of right now, it's too early to say exactly where the land trust would be built, but McKenzie says the city does have a large surplus of empty land.
City staff is still it its beginning stages of analyzing the land trust's feasibility. The city will first have to identify potential developers, non-profits and partners who might be involved.
By this summer, McKenzie hopes council will have a better picture of the plan and how to move forward.
If you'd like to see the full staff report containing extensive details about the Community Land Trust, click here for the agenda, (and scroll to page 442.)