April 13, 2021

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Mortgage News

Community land trust helps Sitka mom build a home of her own

Chandra Watson faces the foundation for her future three bedroom home in January 2021. She and her three children have a provisional move-in date in July or August. Until then, they will live in their mother’s house, where Watson grew up. (Erin McKinstry / KCAW)

Chandra Watson lived with her mother all her life.

Watson, a 34-year-old single mother, works full time at a local bank and usually waits for tables on the side. But that work dried up during the pandemic.

She can’t afford to rent a space right now, so she and her three children share a corner of their mother’s one-story house – Watson and the baby in one room and her 6-year-old and 11-year-old in the other. She said that was particularly challenging during the pandemic.

“It’s been a lot of time together that we’re not used to,” said Watson. “And there is no place under quarantine. We all have to share a room. “

In 2020 The fair market rent for a three-bedroom apartment was more than $ 1,800 and a Survey on the rental market 2020 The average total rent in Sitka was higher than any other area in the state. With rental rates such high, saving up on home buying can feel like an impossible dream for many young Sitkans. When starter houses are put up for sale in good condition, the price tag is often out of reach for many young professionals.

“It seems almost impossible,” said Watson. “There is no way I could afford a $ 450,000 house that needs work.”

Thanks to a new affordable housing development, Watson and her children will be moving into a brand new home later this summer. And at $ 265,000, the price is $ 100,000 below that of Sitka average list price. Watson pays between $ 1,300 and $ 1,400 per month for housing.

Chandra Watson, her 1 year old daughter and 6 year old son are playing in the living room of their mother’s house where they currently live. (Erin McKinstry / KCAW)

“As a younger, single mother doing it all by myself, there was no other way in this town that I could have pursued this if it hadn’t been for this program,” she said.

The first home in the S’us’ Héeni Sháak community The cottages quarter was completed last summer, with two more under construction. The long-term goal is to build a close-knit community of around 14 affordable single-family homes.

A big part of what makes the homes affordable is that the homeowners don’t buy the land underneath. That belongs to the Sitka Community Land Trust, the organization behind the housing estate. According to Randy Hughey, co-executive director of the organization, an empty lot in Sitka can easily cost $ 100,000.

“There isn’t a lot of land, is there? We’re stuck between the Tongass and the Pacific, ”said Hughey. “In Sitka it is common to buy land and have someone build a house and the amount you spent on the land and house to exceed the value of the house you created.”

Hughey said a lack of affordable housing has been a problem in Sitka since he first moved to the community 30 years ago – and probably long before that.

“Housing is a crisis every year. It’s a huge problem – availability, quality of warehouse, affordability. There aren’t enough buildings, ”said Hughey. “They cost too much and there are way too many buildings that people shouldn’t live in.”

The quarter of the S’us ‘Héeni Sháak Community Cottages in March 2021. According to Chuck Miller, cultural bearer of the Sitka tribe in Alaska, S’us’ Héeni Sháak means “Harlequin Duck Creek Area”. That refers to a nearby creek, also known as Cascade Creek. (Erin McKinstry / KCAW)

The model

The hut project has been in progress for years.

Back in 2015, The city sold the land to the Sitka Community Development Corporation, the forerunner of the Sitka Community Land Trust. The land, along with two adjacent lots that the organization is still keen to acquire, was determined by a referendum in 2006 for affordable housing. You got too Money from the Rasmuson Foundation, Regional Health Consortium in Southeast Alaska and other donors.

The Sitka Community Development Corporation was founded Look at the Community Land Trust model in 2013.

The idea is that the land should not be sold to a homeowner, but put into a trust. Homeowners sign 99-year renewable leases for the land and pay a low monthly fee. You also choose from a handful of designs for simple, small structures, which helps reduce construction costs. And the Community Land Trust serves as a resource for the potential homeowner throughout the application and construction process.

“It’s not what will solve the affordable housing problem in Sitka in and of itself, but it fits part of the problem,” Hughey said.

There are around 300 Community Land Trusts nationwide, but Sitka’s is one of only three in Alaska. The other two are in Juneau and Anchorage.

The model has been around for 50 years, but it’s grown in popularity over the past decade, said Michael Brown of Burlington Associates, a consultancy for communal land trust.

“There is recognition of the Community Land Trust’s ability to ensure housing remains affordable over the long term, not just affordable for first-time residents,” said Brown.

Affordability stays with the house over time. If a homeowner decides to sell, the Community Land Trust controls the resale and limits the new purchase price. This can be a disadvantage for homeowners as they are unlikely to get as much for the home as they would in the open market. But they’ll get all the money they put in and more.

For the Sitka model, this corresponds to 25% of every increase in value. For example, if the homeowner buys one of the cottages for $ 200,000. If they’re looking to sell, it’s valued at $ 300,000. They get the money they put in plus $ 25,000. Then the Sitka Community Land Trust sells the home to a new buyer for $ 225,000 – less than its estimated value.

“Let me be very clear that communal land trusts do not question individual property rights. We’re really trying to give people access to people who are excluded due to market conditions and household income, ”said Brown. “These are issues that are beyond your control.”

Brown helped Sitka build the Community Land Trust, which was officially established in 2016. He said each community’s model is unique.

“There’s a C in CLT. These are community organizations… it’s more than just providing affordable housing. It’s about being good stewards of the land, ”he said. “It’s about making housing affordable, but it’s also about making sure that services and resources are available to the people who live in the space.”

“It’s not about leading their lives, it’s about making sure we are doing everything we can to increase the likelihood that people will be successful over time and to help them make successful transitions whenever that is right time. “

Chandra Watson and her 1 year old daughter. “Here we take care of things and we can still bring back great memories,” said Watson. “It’s expensive, but everything else outweighs that.” (Erin McKinstry / KCAW)

I’m looking forward to

The price for the holiday homes is not available to everyone. In general, people must earn at least 80% of the median income in the region to be able to afford the payments. That’s roughly $ 60,000 for a couple. And even then, many don’t have enough savings to make a down payment, especially since then The cost of living in Sitka is so highsaid Co-Executive Director Mim McConnell.

“We’re trying to bring house prices down enough so that people can afford a mortgage. And we find that challenging. We’d love to have house prices lower than they are, ”said McConnell.

She said opening up additional funding options like rural development or VA loans could help. Their target group is initially young professionals looking for a starter home, which, according to McConnell, is not uncommon for a community land trust.

“And our community needs these people,” said McConnell. “I mean, cops, firefighters, nurses, teachers – they’re all very important parts of our community, and if they can’t afford to live here, we’re in trouble.”

It’s not just the cottages that the Sitka CLT is working on. They also thought about developing individual houses as soon as land becomes available or donated to the organization. And they thought about working in other communities in the southeast like Tenakee Springs.

Sitka’s Community Land Trust faces a number of hurdles. You still need to purchase two more packages from the city, a 2006 referendum on affordable housing. And they have had to temporarily stop building additional homes because the pandemic has skyrocketed material costs and property prices have become both unpredictable and unaffordable.

And even for pre-pandemic home buyers like Watson, the price is still high: they’ll use about half their income on housing costs. But she said it is worth having a home of your own. Her 6 year old son Cameron said he couldn’t wait to paint his own room.

“My mind is racing with all of these different things that I can do with the house, to design it, how to decorate it, how many new memories and experiences and traditions the kids and I can bring in here,” said Watson . “I’m so excited to have this fresh start with you.”

After having her third child last year, she considered moving to a cheaper place. But now, she said, she will stay here forever. This is where their family and support networks are located.

This is your home.