James City County is looking at a new approach to preserve housing affordability as rising home costs outpace national increases.
But before diving in too deep, county staff want to be sure community land trusts are a good fit.
They’ve been studying the model with a consultant since January and will have a feasibility plan by September detailing what it would take to establish and operate a trust.
A community land trust separates ownership of a home from the land it’s on. It works like this: A prospective homebuyer considering a property in a land trust would only have to pay the cost of the house, not the cost of the land. The trust remains the owner of the land and would extend a 90-year ground lease to the homebuyer. The lease can be renewed and inherited like homes can. The trust itself is a nonprofit.
The purchaser also agrees to a resale formula prior to closing to put a cap on the resale price and sets the percentage of the home’s appreciated value that the seller can keep. An agreed-upon portion of the appreciation will go to the trust as equity, which it can use for expenses or buying more homes and land.
“In this way, the (community land trust) can keep the home at a price affordable to the next homeowner,” said Vaughn Poller, James City County neighborhood development administrator.
According to Zillow’s home value index, James City County home values are about $90,000 higher than the national average.
Poller said expected county developments on Clark and Moses lanes could present a first opportunity for the trust to get off the ground. Forty-five affordable homes are approved for construction on Clark Lane.
Though novel to James City County, community land trusts go back more than 50 years to the Civil Rights Movement. The first, New Communities, Inc., was a farm collective created in 1969 to support rural Black growers in Georgia. It reached across 6,000 acres at its peak, and has become a model for land trusts nationwide.
There are now about 350 community land trusts across the U.S., including five in the Commonwealth.
Details on who could qualify for the program will be worked out during the feasibility plan, but Poller said the focus would be on people making low to moderate incomes. The exploration will also consider whether the model replicates existing affordable housing initiatives in the county, and whether a trust could be more effective.
Poller said he expects that will be the case with James City County’s use of deeds of trusts on affordable housing developments. The deeds, lasting 10 to 15 years, allows the county to recoup public investment in affordable housing. It works by taking a cut of the sale of a home to pay back the subsidy the county provided an individual or developer for things such as mortgage assistance or lowered interest loans.
“While this is no better than no money at all, the amounts recaptured are not enough to replace the unit sold,” Poller said. “Once the previously affordable unit sells, it is no longer affordable; it becomes market-rate.”
A future trust’s organizational structure would also need to be worked out. Community land trusts are typically established as nonprofits with tripartite governance; often, a third of the board of directors are selected by residents in the trust, a third selected by community stakeholders and a third appointed by an entity such as the local government.
“The trust, itself, would not necessarily be county-owned or operated,” Poller said.
Financing the trust is another lingering question the feasibility plan will detail. Board of Supervisors Vice Chair John McGlennon questioned if the county will set up initial funding for the trust and if other stakeholders could be incentivized to invest. He said uncertainty about federal funding also has to be considered.
The board, while generally optimistic about the program, wanted to see results from the five trusts in Virginia.
“How do they ensure the focus is kept on what we want to do and it doesn’t evolve into something that then becomes more of a problem than it is a solution?” said Chair Jim Icenhour.
