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Earth Notes

Flagstaff Community Land Trust

By Theresa Bierer

Flagstaff, AZ (2007-05-04 –
Flagstaff housing prices are increasing more quickly than in almost any other city in the country. The median price for a home is now over 400 thousand dollars. In part 2 of her series on the cost of housing, Arizona Public Radio's Theresa Bierer examines one option the city of Flagstaff is pursuing to make at least some houses more affordable.

On this cold evening in downtown Flagstaff Allen Sclerf is saying goodbye.

The 48 year old says he loves this town but he's joining the ranks of others who are moving to where real estate is cheaper.

A lot of people are leaving. I can see at least 10-12 people that are up and leaving or are already gone that I've known since I came here in 88.

Schlerf has overcome 2 bouts of Cancer during his time in Flagstaff. and HE says now he's ready for the next phase of his life.

I'm not getting any younger and I'd like to you know, the American dream is to own your own something. I own my motor home but I always want more. Laugh. I love this place but it's just gotten out of hand. I can see the money has taken over.

ALAN Schlerf is considering a move to western Nebraska where he says he can buy a golf course condo for 75-thousand DOLLARS.

He's part of a growing number of people who are leaving Flagstaff which has one of the highest rates of real estate appreciation in the country.

At an office in FLAGSTAFF City Hall .several employees are working full time to provide affordable housing options for people who would like to stay.

City councilwoman Kara Kelty has studied Flagstaff's housing issues for years. Along with then councilman Art Babbott she created the Community Housing Task Force. Kelty says the city's down payment assistance programs helped many people buy homes but when those houses were RE-sold, the prices SKYROCKETED, MAKING THEM AGAIN unaffordable to most families.

So, we need a mechanism that will retain the subsidy the public subsidy whether it's through federal or public local dollars that we've invested to be sure we're using it one time and maximizing that assistance so that it's permanent

The city's latest project, scheduled to come on line this month is designed to do just that.

(Sara Darr) a Community land trust provides a way that that subsidy is retained in the land.

That's Sarah Darr, Flagstaff's Community Housing Manager. She's helped create the city's Community Land Trust. The new program allows people to buy a home on land owned by the city. Then, when the owner sells the home, the city maintains ownership of the land. City staff reason that will keep home prices in the land trust more stable because it's primarily the scarcity of land driving up housing prices. But, In exchange for buying a home at a reduced rate, Darr says the homeowner MUST agree to certain terms.

when you are ready to sell you agree to sell to another purchaser much like yourself. Someone who meets the eligibility criteria for the program and you will sell according to a resale formula that keeps the home affordable in perpetuity.

Land trusts were developed in the 1960s but are somewhat rare in the west. In order to qualify for Flagstaff's program, a family of four can earn up to 81 thousand dollars a year, or 150 percent of the area's median income.

. and people may hear that figure of $81,000 dollars and say how can they not buy a house in this community? And if you look at the numbers and you look at what they could qualify for, with a lender, it's possible they might be able to do it but it's possible that the stock is just not there. So getting into a homeownership position, starting to accrue equity will get them a down payment on the backend to help them compete in the open market better

When a home in the land trust sells, the homeowner will receive 25% of the profit the rest of the money goes back into the community land trust.

Flagstaff city councilwoman Kara Kelty says some people are critical of that equity formula thinking a homeowner should enjoy all the profits from the home sale.

For me, I see it as if a person weren't able to enter into a home ownership situation without the assistance of the land trust that they understand and recognize they were able to take advantage of that situation and they're willing to pay back if you will the community for the opportunity. So, I see it as a half step toward homeownership rather than penalizing the homeowner.

A Community Land Trust isn't the only model to keep home prices affordable for future generation. . About 45 Flagstaff families own homes they purchased through the nonprofit affordable housing agency Both Hands. The agency provides homes at below market rates and gives down payment assistance. In exchange, families agree to keep only 25% of the profit from their home when they decide to sell it. The lower sales price keeps the home more affordable for the next family.
Helen Hudgens Ferrell directs Both hands She says her group supports all affordable housing efforts BUT she's not sure Flagstaff's Community land trust should be run by the city.

HELEN HUDGENS FERREL ))) Our board realizes that sometimes the strength in government isn't always in the development of land or in the buying and selling of property and so there is concern that will government be the best mechanism, the best means of making this tool work effectively.. I think our board would like to see in the long run a nonprofit being formed or one given the opportunity to do the land trust.

Would be land trust homeowners can sign an informal list at city hall .Applications for the first 9 homes will be available later this spring.
Flagstaff housing officials predict there could be as many as 100 community land trust homes in the future.