At The Optimist Daily, we’re happy to see solutions to the housing crisis. While we enjoy innovative solutions, we also love to see communities coming together to help their members hold onto their homes in the face of increasing rent prices.
In 2016, when a new owner took over 285 Turk Street, a 40-unit building in San Francisco’s Tenderloin neighborhood, longtime residents were worried about their rents increasing, and they were right.
The new owner announced plans to raise rents, but the residents fought back. With a lot of effort and help from the Filipino Community Development Corporation they were able to convince the new owner to keep the rents reasonable, but the tenants feared for the future.
This is where the San Francisco Community Land Trust came into the picture.
What is a Community Land Trust?
A Community Land Trust is an organization that creates shared equity in certain locations by using private investments to buy property on behalf of a certain community. The trust owns the property forever and leases it to tenants of low-to-middle incomes at a reasonable rate that keeps the building permanently affordable.
There are about 260 such organizations operating in cities throughout the United States.
Community Land Trusts: tenants’ check on rent hikes
While just one weapon in the fight against unaffordable housing, trusts like the one in San Francisco are invaluable to tenants.
At 285 Turk Street, after much negotiation and fundraising, the San Francisco Community Land Trust was able to purchase the property for $9.25 million, much less than the original purchase price. None of the funds came from the state, all came from private donations, and local policies helped too. It was a difficult process with many steps, but in the end the tenants of 285 Turk Street were able to keep their rents affordable for the long foreseeable future in a city notorious for its high cost of living.
“It’s very complicated, but it proves it can be done,” said Keith Cooley, the land trust’s director of asset management, said to Bloomberg CityLab. “And I hope it can be encouragement to other community land trusts and affordable housing developers in the country whose model doesn’t necessarily fit the government model for affordable housing.”
Not only will the tenants of 285 Turk Street be able to maintain their housing in this city where rents have steeply increased in the past 20 years, but they will be able to buy equity in the building.
Their shares, according to the trust, will increase at a reasonable one to two percent each year. This is nowhere near the outrageous returns on investments promised in the typical exchanges of San Francisco real estate, but it will mean that residents in the Tenderloin, one of the city’s most poverty-stricken neighborhoods, will be able to build wealth over time.