This Detroit neighborhood uses the community land trust model to secure affordable housing
Tasneem Joseph sits on the porch of a two-story yellow house on Detroit’s west side, just down the street from the Detroit Muslim Center.
“This house has literally changed my life,” Joseph said. “It gave me a haven for my children.”
The home of Joseph and his children is the Indus Detroit Artist Residency, a house that was renovated by the Dream of Detroit community development organization, which operates out of the Muslim Center. It is one of the first homes the group moved into in their new Dream Community Land Trust.
Detroit’s housing market is pushing many people to think outside the box when it comes to home ownership. For years Detroit was considered the place to buy a decent and affordable home. But this is no longer the reality in many areas of the city.
The overly competitive market and lack of diversity in pathways to homeownership have forced residents like Joseph to seek support within their own community.
According to Anchored Solutions Network“Community Land Trusts (CLTs) are non-profit organizations governed by a board of directors comprised of CLT residents, community residents and public representatives that provide enduring community assets and homeownership opportunities shared ownership for families and communities.”
In this model, a non-profit organization holds land in trust for the community, while offering ownership of the house to a family at a lower cost.
Dreaming of Detroit is just one organization in Detroit taking this new path to homeownership. The group “combines community organizing with strategic housing and land use planning to build a healthy community and revitalize our neighborhood,” according to its website.
Its executive director, Mark Crain, began exploring new avenues of homeownership after noticing how Detroit residents were being pushed out of the housing market.
“We’ve gone from a city that at one time had the highest share of black homeowners in the country to now being a majority renter city,” Crain said. “We have gone from being a city that was widely viewed as a mortgage bubble by the banking industry to being a city that now has neighborhoods that benefit from fair mortgages.
Detroit was once considered non-mortgage by the banking industry, and even today most transactions are still cash.
The organization of the press Reveal reviewed loan data from 2016. They found that black Detroiters were almost twice as likely to be denied loans.
Crain says access to mortgages is still an issue for black people in this majority-black city. “What we find is that they go mostly to white people.
So Crain set out to create a different path to homeownership by creating the neighborhood’s first community land trust.
He believes this model will protect the neighborhood from gentrification, while locking in permanent, affordable housing for the neighborhood.
“We already see people buying properties to sit on, holding them without making any investment, playing the long game because they have, you know, patient money and they think there’s a big back in the future,” Crain said. “We think there’s a big comeback now.”
Dream of Detroit got help from the Detroit Justice Centerof the practice of economic equity. General Counsel Eric Williams says it’s a great model for affordable homeownership. Typically, he says, people can buy a house for 30 to 50 percent less than the market price.
Williams explains how a CLT works:
“This non-profit organization owns the land. It rents plots of land to families or individuals. And they are building a house there. Now they own the house… But they sign a 99-year lease, basically to rent the land.
Because they only buy the house, not the land, it makes the house more affordable, which guarantees a lower monthly payment for a family.
If a family ever sells the house, they can still make a profit, but there is a limit to that profit. The model aims to ensure that the house in the land trust remains affordable for the next family.
Williams says that in places that have tried this, neighborhoods tend to be more stable.
“People who rent a house on a community land trust or rent the land there are much less likely to be subject to foreclosure than people residing in other circumstances.
And the benefits are not just financial. This model is most successful when implemented by a group of people who are already in community with each other. This ensures an integrated support system.
Crain says Dream of Detroit is committed to centering its community and using its resources to help restore equity to its neighborhood.
“We want to focus on revitalizing the neighborhood now. And we know that if we can use a vehicle like a land trust to secure ongoing affordability, we can ensure this is a mixed-income neighborhood for generations to come.