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Community Land Trust to close Sitka’s affordability gap?

A Community Land Trust is another step closer to reality in Sitka.

The Sitka Assembly Tuesday night (2-11-14) awarded $7,500 to the Sitka Community Development Corporation to support the non-profit’s creation of a trust.

The funding will support the salary of the non-profit’s director, Mim McConnell, who is also Sitka’s mayor.

McConnell recused herself from assembly deliberation on the matter, but spoke as a member of the public. She wanted to assure her colleagues on the assembly that she was not in it for the money.

“I will continue to work, even without pay. As I’m doing right now. I’m not getting paid right now. Even though they want to pay me, the money just isn’t there. But I’ve continued to work — and I will continue to work — because I believe in this so much, and I feel so passionately about it.”

The assembly approved the request, with Pete Esquiro dissenting. The funding comes from a $10,000 emergency fund the city sets aside for non-profits.

The Sitka Community Development Corporation has been working with a consultant, Burlington Associates, on establishing a local community land trust. Burlington’s Michael Brown briefed the assembly in a work session before Tuesday’s regular meeting.

Brown, and SCDC chairman Randy Hughey also outlined the program for the Sitka Chamber of Commerce the following day.


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Michael_Brown_300.jpgThe goal of a community land trust is to create affordable home ownership for people of middle income. CLT’s own the land under the homes in perpetuity, and homeowners buy and sell only the houses themselves.

In a place like Sitka, where scarcity is driving up the price of land, this can lower the purchase price of a home significantly — and make the difference for someone trying to qualify for a mortgage.

It will also lower the potential return when the house is sold, but that’s the deal people make, Brown says, when they buy a home in a community land trust.

“When they choose to leave, if they ever decide to sell, we ask them to leave the affordability that we created for them, so that another family in the same circumstances as the original owners has that same benefit.”

Brown said that most people live in a CLT home for 5-7 years, and then transition to the traditional marketplace.
Community land trusts are owned by a non-profit board — in this case the Sitka Community Development Corporation — and homeowners pay a small monthly fee to the trust to cover management costs.

Homeowners also agree to maintain their properties in a way that retains the value of the property — much like a homeowner’s or neighborhood association in the traditional marketplace.

Randy Hughey helped give the chamber audience some perspective on the problem, as a long-time resident of Sitka.

“The reason that a community land trust makes so much sense — I think — because we know very well that you can’t just step into this as young family and buy a house here. Because of that, in 1992 there were 1,800 and some students in school. Twenty years later, there are 1,300 and some students here. 500 students fewer. That’s a pretty clear demographic. Only people who are our age and who have accumulated some wealth can get into this. That’s a bad idea for a community.”

Hughey said the SCDC would develop a formula based on area median income — or AMI — to qualify prospective buyers. In Sitka, the median income is roughly $75,000 dollars per household. Hughey said the formula would qualify households with incomes 20-percent higher than that — or $90,000.

“$90,000 or $75,000 won’t buy a house in Sitka. This is not low-income housing. This is median-income housing. This is the working professional. Last year I helped a Math teacher with ten years experience and a Masters degree buy a 1970s run down trailer — because that’s what she could afford.”

Hughey said the Sitka Community Development Corporation expected the city to donate land for the first home in the trust. He said the SCDC would like to market its first property this year — in 2014. Members of the chamber audience seemed receptive to the idea. Former mayor Fred Reeder said he thought this was a better idea than putting people into homes which they couldn’t afford. “That nearly wrecked the country,” he said.

Michael Brown said it was a matter of political will.

“Ultimately it’s going to be up to you as the business community, you as the citizenry of this community to say, We’d like to have some housing that’s going to be affordable for folks who are otherwise priced out of the market, because we’d like them to be able to continue to live here.”

Randy Hughey was more blunt. He said Sitka was desperate for housing. The effects on the community were becoming hard to ignore.

“We’ve been talking about affordable housing for a decade here folks. What’s the other idea?”

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