The Tool Florida Communities Are Using To Try To Beat Back Gentrification
With affordable housing in high demand, the community land trust model is taking hold in South Florida.
With this formula, typically a nonprofit owns land in perpetuity, while the person or entity controlling the home or apartment building on top of it is given a 99-year lease, which is renewable and essentially confers the same benefits as ownership. If the building is sold, it’s with contingencies — at only a slight profit, and to another low-income qualifying person or people, thus keeping the property affordable for generations.
In Broward County, the South Florida Community Land Trust has created 63 affordable units. In the Florida Keys, a donor concerned about the lack of workforce housing in the wake of Hurricane Irma gave $1M to start a CLT that completed its first home last week and has more in the pipeline. And in Miami-Dade, another nonprofit just secured land for its first project.
Jaimie Ross, president and CEO of the Tallahassee-based Florida Housing Coalition, said the CLT model is gaining traction as the affordable housing crisis grows.
“It’s a great tool to preserve community in gentrifying areas,” Ross said, especially where low-income workers can't even get a toehold because outsiders are buying property for investment.
“You might have an area that's depressed now,” Ross said. "Get some of that land into community land trusts."
Adrian Madriz grew up in South Florida and went to the University of Michigan. When he came home with what he calls a "fancy liberal arts degree” and took a job at a nonprofit, he got an apartment in one of the few neighborhoods where he could afford the rent: the historically black, working-class community of Overtown. His job took him to a similar neighborhood, Liberty City, where residents invited him into their homes to witness some of the challenges they were dealing with.
“What I saw broke my heart and really changed my life,” Madriz said. “People weren’t able to take showers because sewage had backed up into the tub — there were two inches of raw fecal matter.”
One woman had rats in her toilet and black mold in her bathtub.
“It was like a scene out of the movie 'Saw,'” Madriz said. "It’s one thing to see these things, but if you have to smell these things ... I will never forget those smells. I knew what I had to do with the rest of my life.”
Madriz teamed up with residents to organize, file complaints and force slumlords to make repairs. In 2016, they formed an organization called SMASH (Struggle for Miami’s Affordable and Sustainable Housing) and began a campaign to “Smash the Slumlords.”
“We try to stop gentrification, and people getting put of their homes,” said Porgie “Gigi” Town, who runs a soap-making business out of her home. “Developers come into Miami and buy up all the land.”
In one well-publicized case that SMASH worked on, the city of Miami, for the first time in decades, took a property owned by absentee landlords into receivership.
But that created another problem: Where to move tenants so that the run-down buildings could be updated or razed? Ideally, families could be moved into safe, temporary housing while the run-down properties could be redeveloped. Income generated from fair rents could be used to update another project, and so on.
Madriz said the group had discussions with developers large and small, from Related Group on down, but “we always get faced with the same thing: They don’t have the capacity. They have other priorities. We’re serving a pretty high-risk population. They don’t see the benefit of working with us. Nothing against these people — they just don’t have the capacity and a lot of it is tied to funding.”
Madriz said some politicians were helpful. Former Mayor Tomàs Regalado made introductions and economic development director George Mensah identified city- and county-owned lots that might be used for housing projects. But their city commissioner, Keon Hardemon, would need to take up the fight for them. So far Hardemon has not been responsive, Madriz said.
SMASH has met with community redevelopment agencies, but much of their funding for the foreseeable future was already allocated, Madriz said. Some SMASH members started a company called Worlds, that runs video game events to serve as a for-profit arm that could raise funds for the nonprofit work. They explored the idea of housing displaced families in homes made of shipping containers.
After countless meetings, Madriz said SMASH realized that “for anybody to take us seriously, we would have to develop something ourselves.”
Now, finally, SMASH has secured land for its first project — a lot at 2264 NW 63rd St., for $10K from Andrew Bryant, who has a small company, Bryant Management and Construction. Bryant said he picked up the lot before the housing crisis, but a planned project fell through and he has been busy with other jobs. An acquaintance had explained to him the idea of community land trusts, and he was eventually steered to Madriz.
“I sold it to him for about ... 20% of the [market rate],” Bryant said. “I could have sold the lot twice [to other buyers] in the last three or four months.”
He might have gone that route, but he said that he liked the idea of helping the community.
“I know how it is not having the funds," Bryant said. "I’ve had to raise cash or get not favorable terms [on my own projects].”
Madriz said their deal has contingencies. SMASH will have to work with the city to get $300K in liens removed. Bryant’s company will be hired as the builder. Madriz expects that he will need to raise $300K for construction, through a mix of grants and private debt financing.
SMASH hopes to build a small, two-story multifamily building that will have three units. One will be an affordable, two-bedroom, two-bathroom unit for a family that has lived in poor conditions, with rent set at about $300/month, a figure based on HUD guidelines. The second unit would be a two-bed, one-bath that would house four homeless LGBT youth. And the last unit would be a three-bed, two-bath rented at market rate, $1,600/month.
Florida Housing Coalition CEO Ross said CLT models can vary, but typically, when a CLT resident or apartment owner sells their building, they're contractually obligated to sell for a restricted price — usually 1% to 2% appreciation per year — to another income-eligible family, or else the trust purchases the building and assigns it to the next eligible buyer.
"[CLTs are] a vehicle for taking land out of the speculative market. You are basically preserving land in perpetuity for affordable housing," Ross said. "Whatever is built is going to remain affordable for one family after another for generations to come.”
Ross said CLTs have been created from Sanibel to Palm Beach, but the main hurdle is acquiring a donated or mortgage-free property to start with.
“If you can afford to buy a regular fee-simple house, you should,” Ross said.
But in high-cost areas, where people can’t even afford down payments, CLTs are great alternatives to renting, she said, because it gives people a fixed price to pay for as long as they live in the house, and they will get equity back when they sell.
SMASH's website asserts that “the land rightfully belongs to the families and individuals who have lived on it, labored it and loved it, well before it became 'the next Wynwood.'"