Community land trust to promote affordable home ownership and retention

Dwelling Place Community Land Trust (DPCLT) is developing a five-acre vacant lot north of Burton Street SE in the Garfield Park neighborhood as a community land trust. Community land trusts are nonprofit, community-based organizations that retain ownership of land and sell the homes on that land to low- and moderate-income households for prices they can afford. DPCLT’s 2080 Union Project will offer 42 single-family, detached homes on two new public streets. The homes will range in size from 968 to 1,335-square-feet. Two of the homes will be barrier-free.

“We are looking to sell some homes at prices that keep people’s monthly payments below $1,500. This should let people with incomes above $55,000 a year purchase a brand-new house,” says David deVelder, director of DPCLT. “Twenty-one of the homes are targeted for lower income families below 80% AMI [area median household income] and will be sold with an average selling price of 55% of fair market value. In real numbers, this means people will be getting mortgages for $165,000-$225,000.”

Kent County’s AMI is $65,722. For nearly 20 years, deVelder has spent his career in affordable housing. He began his tenure with DPCLT in May 2020.

“In ‘for sale’ affordable housing, the big problem is [that] you sell it to somebody and then, when they go to resell, it goes to market rate. It’s almost like we're always having to do it over again,” he says. “With a community land trust, the home stays affordable permanently. It is always there for the first-time homeowner.”

Community land trusts help people who otherwise are unable to afford their own home. They are also long-term community assets that retain affordable housing within communities.

“DPCLT sells a home to the homebuyer for a price below the home’s appraised value and, in exchange, the buyer agrees to sell the home below the appraised value to the next buyer,” deVelder says.

David deVelder

This reduces both the mortgage amount and down payment required to buy a home. And community land trusts help people stay in their neighborhoods, despite gentrification. DPCLT and its lenders will also provide additional down payment assistance.

“Because of the discounted sales price, families won’t need to pay PMI or have a large down payment of their own. In exchange for affordability, the homeowner agrees to a resale formula which allows the homeowner to recoup what they buy it for plus 25% of any appreciation when they sell the house,” deVelder says. “I'll say it's a new idea, but it's not new. It's been around a long time in the United States.”

In fact, Black farmers, who had lost their homes and jobs for registering to vote, established the first community land trust in the U.S. on 5,700 acres of land in Albany, Georgia in 1969. Since then, community land trusts have taken root across the country.

DPCLT is also making several existing Dwelling Place rental properties in Grand Rapids available as community land trust homes. Current renters interested in buying their homes can review their qualifications and the steps they need to take with DPCLT staff. Current residents who want to continue in their homes on a rental basis will not be displaced. However, when they move out, their units will be renovated and offered for sale within the community land trust.

“Community land trusts are great for families by providing affordable homeownership for people that can’t afford to buy a home on the open market,” deVelder concludes. “And they are great for neighborhoods. They ensure that the people who have always been able to live there get to remain.”