The San Antonio City Council will vote on a Community Land Trust (CLT) designation policy next week in a step that could lead to more long-term affordable housing in the city.
CLTs are local nonprofits that purchase land to keep it from the speculative real estate market so that costs remain low for residents even if surrounding property values increase.
In the traditional CLT model, home buyers purchase the home, but they lease the land underneath from the CLT for a minimal cost. CLTs own that land in perpetuity and generally lease it out on 99-year agreements.
Neighborhood and Housing Services Department (NHSD) Director Veronica Garcia explained the general levels of affordable housing CLTs are intended for.
“CLTs that are serving renters must focus on helping households with incomes up to 60% of the area median income,” Garcia said. “And CLTs that serve homeowners, which is the more traditional model, they must focus on households with income up to 80% of the area median income.”
State law allows CLTs to operate in Texas but requires cities to have their own designation process before a CLT can operate in them. Austin and Houston already have CLT designation policies.
CLTs typically have a defined service area that could be as small as a block and as large as an entire city, a corporate membership made up of stakeholders around the service area, and a tripartite board made up of CLT homeowners, public stakeholders, and neighbors.
Because the CLT’s purpose is to ensure long-term affordability, when a homeowner sells their home, their selling price is limited by a rate they agreed upon with the CLT when they purchased the home.
District 9 Councilmember John Courage said he wasn’t opposed to CLTs outright, but he had several concerns about their operations, including their ability to actually build generational wealth.
“I bought my house for $130,000 28 years ago,” Courage said. “It’s paid off now. It’s gone up 300% in value. If somebody else bought a house and it went up 1% a year or even 2% a year over the same period of time, it would be going up 60% in value. But everyone else around it went up a lot more. How does that help people earn generational wealth?”
District 3 Councilmember Phyllis Viagran said although wealth maximization may not be CLTs’ function, one of the major opportunities they provide is for families to be able to stay in their homes long-term without worrying about getting priced out.
“And I think the other opportunity is that generational home, that legacy home,” she said. “What I am thinking in particular is that there’s a family that has a property, they have people that can live there and maintain the home, it’s just the land use that maybe they don’t want to worry about the property taxes and things like that.”
Courage added he was also concerned about how CLT properties could negatively affect property values of nearby homes.
“How do we protect the entire value of a community?” he said. “If you have a street where three or four houses are part of the CLT and two or three aren’t, does that tax difference affect the tax values of other homes in that neighborhood, on that street?”
Garcia added that the council will have the authority to approve or deny all first-time applicants for the CLT designation. If a CLT presents a mission that the council disagrees with, they can turn them down.
Several local nonprofits in San Antonio have already launched CLTs ahead of the formal designation process, including the Esperanza Peace and Justice Center, which has a focus on the Historic West Side, and Culturingua, which wants to develop housing in the Medical Center area.
The city will begin taking applications from prospective CLTs in January if the city council approves the NHSD’s proposed CLT designation plan next week.