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THE COMMUNITY LAND TRUST MODEL AND SMART GROWTH PRINCIPLES AS A MEANS TO PROVIDE AFFORDABLE HOUSING IN THE FACE OF GENTRIFICATION By TERESA RUSSIN A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN URB AN AND REGIONAL PLANNING UNIVERSITY OF FLORIDA 2007 1
2007 Teresa Russin 2
To my mother and father. 3
ACKNOWLEDGMENTS The completion of my thesis would not be possible without the endearing faith and invaluable insight of my committee members and th e instructors in the Department of Urban and Regional Planning. I would like to first thank my chair, Dr. Kristin Larsen, for her inspiration, patience, and unwavering support for me personally and professiona lly. I thank committee member Dr. Anne Williamson for the guidance sh e lent throughout the thesis, and for her positive and encouraging attitude that made it possi ble for me to work while researching. I also thank committee member Dr. Paul Zwick for assuri ng me I was capable of finishing my thesis, for making me laugh every day in class, and for in troducing me to the world of GIS. I would also like to thank Dr. Ruth Steiner, the experiences I gained from her classes and employment enabled me to navigate the theories I used in this thesis. I would like to make special ac knowledgment of the employees of the City of Winter Park and Hannibal Square Community Land Trust. I th ank Mr. Jeff Briggs, Ms. Sherry Gutch, and Ms. Bedilia Campbell for their time and assistan ce in gathering the necessary information to complete my research. Their gene rosity is truly appreciated. Finally, the acknowledgments would not be co mplete without recognizing my family, friends and colleagues. Their understanding, flexibility and cheer leading has helped me through this process. In particular I thank Jenny Wheelock for bei ng my companion when in the trenches, my counselor when I struggled, and my peanut gallery when I needed a laugh. I also thank Kristen Nowicki for taking me under her wi ng as her apprentice since I entered the URP program. 4
TABLE OF CONTENTS page ACKNOWLEDGMENTS ...............................................................................................................4 LIST OF TABLES ...........................................................................................................................7 LIST OF FIGURES .........................................................................................................................8 ABSTRACT ...................................................................................................................................10 CHAPTER 1 INTRODUCTION ................................................................................................................ ..12 Problem Statement ..................................................................................................................12 Case Study Context .................................................................................................................15 Significance of Study ..............................................................................................................18 Organization of Study .............................................................................................................18 2 LITERATURE REVIEW .......................................................................................................20 Smart Growth and Sustainability in Land Use Planning ........................................................20 Mixed Income Development as a Solution .............................................................................26 The Capacity of the Community Land Trus t Model to Create Smart, Sustainable Affordable Housing .............................................................................................................29 Introduction and Brief History of Community Land Trusts ...................................................29 The Characteristics of the CLT Model ...................................................................................31 The CLT Model in Practice ....................................................................................................37 3 METHODOLOGY .................................................................................................................48 Data Sources ...........................................................................................................................48 Part 1: Descriptive Evaluation of the HSCLT ........................................................................51 Part 2: Theoretical Evaluation of HS CLTs Use of Smart Growth Principles .......................54 Synthesization .........................................................................................................................55 4 CASE STUDY FINDINGS ....................................................................................................60 History of Winter Park and Hannibal Square Neighborhood .................................................60 Part 1: Results of Descriptive Evaluation of the HSCLT .......................................................64 The Implications of Meeting the Classic CLT Definition ..................................................68 The Specific Characteristics of the HSCLT ...........................................................................68 Formation: The When, Why, and How of the HSCLTs Creation .........................................69 Structure: How the HSCLT is Set Up to Function .................................................................69 Objective: Description of Residential and Non-Reside ntial Activities and Goals .................71 5
6 Portfolio: Current and Projec ted Real Estate Holdings ..........................................................72 Relating the HSCLT to the Lincoln Institute Study ...............................................................74 Part 2: Results of Theoretical Evaluation of HSCLTs Use of Smart Growth Principles ......77 Current Incorporation of Smart Growth Principles by the HSCLT ........................................77 Assessment of the Potential for Integrati ng Smart Growth into the HSCLT: Winter Parks Housing Element and Future Land Use Element .....................................................80 Implications of Findings .........................................................................................................83 5 CONCLUSION .......................................................................................................................94 APPENDIX A UNIVERSITY OF FLORIDA INSITITUTI ONAL REVIEW BOARD APPROVAL OF INTERVIEWS ......................................................................................................................101 B FLOW CHART DEMONSTRATING THE RELEVANCE OF FINDINGS THROUGH CASE STUDY DESIGN ......................................................................................................103 LIST OF REFERENCES .............................................................................................................104 BIOGRAPHICAL SKETCH .......................................................................................................109
LIST OF TABLES Table page 3-1 Classic CLT Model Characte ristics Used for HSCLT Analysis .........................................56 3-2 Questions Asked about the Characteristics of the HSCLT Based on the Lincoln Institute Study, Listing the Data Sources Used to Answer Each Question ..........................................57 3-3 Evaluation Criteria for HSCLTs Inclusion of Smart Growth Principles ..............................59 4-1 Comparison of the Classic CLT Charact eristics with Those in the HSCLTs By-Laws ....90 4-2 Findings from Comparison of the HSCLT to the Lincol n Institute Study .............................92 4-3 Assessment of the HSCLTs Current Incorporation of Smart Growth Principles .................93 7
LIST OF FIGURES Figure page 2-1 Demonstration of Inte rrelationship among the Smart Growth Networks Smart Growth Principles ........................................................................................................46 2-2 The Number of CLTs Cr eated in the United States by Decade ..................................47 4-1 Location of Winter Park, Florida ................................................................................84 4-2 Location and Visual Images of th e HSCLT and its Neighbo rhoods within Winter Park ..............................................................................................................................85 4-3 Surplus or Deficit of Affordable Housing Units Based on Household Income Levels in Winter Park, Floridas CRA .........................................................................86 4-4 Photographs of Existi ng HSCLT Development Canton Park .................................87 4-5 Land Use Designa tions of Parcels within the HSCLT Developments ........................88 4-6 Arial Photograph of Hanni bal Square Neighborhood and the HSCLT Developments ..............................................................................................................89 8
LIST OF ABBREVIATIONS AMI: Area Median Income BCLT: Burlington Community Land Trust CBD: Central Business District CLT: Community Land Trust CRA: Community Redevelopment Agency or Community Redevelopment Area EPA: Environmental Protection Agency FHDC: Florida Housing Data Clearinghouse FLUE: Future Land Use Element GOP: Goals, Objectives, and Policies HAP: Homeownership Assistance Program HE: Housing Element HOME: Home Investment Partnerships Program HSCLT: Hannibal Square Community Land Trust HUD: Department of Housing and Urban Development ICE: Institute of Community Economics IRS: Internal Revenue Service LIHTC: Low Income Housing Tax Credit program NIMBY: Not In My Back Yard SCLT: Sawmill Community Land Trust SFMRB: Single Family Mortgage Revenue Bond SGN: Smart Growth Network SHIP: State Housing In itiatives Partnership WCED: United Nations World Commissi on on Environment and Development 9
Abstract of Thesis Presen ted to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Urban and Regional Planning THE COMMUNITY LAND TRUST MODEL AND SMART GROWTH PRINCIPLES AS A MEANS TO PROVIDE AFFORDABLE HOUSING IN THE FACE OF GENTRIFICATION By Teresa Russin December, 2007 Chair: Kristin Larsen Major: Urban and Regional Planning The social and economic consequences of too few housing options for households at lower income levels plague even the most progressive urban planning efforts in communities across the country. To combat th is increasing problem, professiona ls and academics continually develop affordable housing m echanisms with the hope of finding a lasting solution. Gaining recognition for its potential to create permanently affordable housing, the Community Land Trust (CLT) model is a developmen t strategy that reduces the cost of housing and maintains the affordability of each unit by separating ownership of land and residence. The organization owns the land and leases it to reside nts. This dual owners hip enables low-income residents to own, or in some cases rent, while the organiza tion retains unit affordability. Consequently, CLT residents have limited equity available to them as opposed to traditional home ownership. However, the benefits of permanent affordability seem to outweigh the shortcomings. This study examines the structure of the CLT model, the CLTs implementation in general and within the c ontext of a specific community, and the extent to which CLT relates to Smart Growth principles that incorporate affordable housing. Once the CLT model and its relation to Smart Growth are explored, the case study of the Hannibal Square Community Land Trust (HSCLT) located in the Community Redevelopment 10
Area of Winter Park, Florida, allows an opportu nity to examine these relationships. The HSCLT was incorporated in 2005 to pr otect original citize ns of the historic African-American community from the threat of gentrification. An analysis of the HSCLT demonstrates the organizations success in creating affordable homeownership opportunities, albeit on a small scale. The CLT model is further analyzed in its relation to the Smart Growth movement by assessing the HSCLTs incorporation of Smart Gr owth principles in its operations. The case study further shows that the CLT model has the po tential to integrate Smart Growth principles while providing affordable housing options. Th e findings of this cas e study provide strong evidence that further research on the relationshi ps among CLTs and planning strategies such as Smart Growth is needed to better understand of the CLT model and its applicability to solving affordable housing challenges. Revisiting the HS CLT after resales occur would allow for more in-depth analysis of the organizations ab ility to perpetuate housing affordability. 11
12 CHAPTER 1 INTRODUCTION Affordable housing is difficult to create, obtain and preserve. As demand grows for affordable housing, outpacing affordable housing s upply at increasing rate s, creative ways for providing such housing must be engineered. Ex amining successful affordable housing programs and discovering ways to improve such programs is an increasingly important task for finding solutions to the challenges of affordable housing development. This study will explore how the Community Land Trust (CLT) model is used to meet the affordable housing needs of a community by ex amining the implementation of the model in Winter Park, Florida. The Hannibal Square Community Land Trust (HSCLT) will be analyzed using a case study methodology to describe the fu nctions of the organization and its impact on the Winter Park community. Furthermore, an as sessment of the incorporation of Smart Growth principles into the management of the HSC LT will demonstrate the proposed benefits of integrating Smart Growth princi ples into the CLT m odel within the context of the case study area. Problem Statement Lack of affordable housing affects the so cial and economic climates of communities across the nation. Much of the cu rrent stock of affordable housi ng is grouped within isolated pockets, resulting in neighborhoods of concentrat ed poverty. Households living in high-poverty areas face social issues such as poorly-maintai ned infrastructure, limited job choices, and restricted life opportunities. Lower-income househol ds that avoid living in such areas are either fortunate enough to find the few affordable options in other areas or choose to live above their financial means. The economic problems linked to th e affordable housing crisis affect more than the individuals in need of such housing. Neighbor hoods with concentrated areas of affordable
housing may experience a cycle of disinvestment Individuals and families capable of moving up to market rate neighborhoods tend to leave popula tions with fewer financial resources. Lower income neighborhoods are more likely to have absentee landlords and vacant properties, perpetuating disinterest by invest ors and developers in the area. As the population in need of affordable housing continues to grow, assisting these households will require greater financial support through government subsidies. The cost of providing assistance will be passed on to the general public through taxes and reduced economic productivity. In sum, the consequences of not providing affordable housing are detrimental to society and the economy from the local to the national level. Affordable housing is defined by the Depart ment of Housing and Urban Development (HUD) as a safe and decent living environment av ailable to households with varying levels of income, without creating a cost burden. A househol d is cost burdened when it must devote more than 30% of its income to pay for housing. The level of housing affordability depends on what populations with given percentages of the area median income (AMI) are able to pay the standard housing related costs. The terms extremely low-income, very low-income, low-income and moderate-income households relate respectively to 30% or less, 50% or less, 80% or less, or 120% or less of AMI. Recent trends in the real estate market have made obtaining affordable housing more difficult despite historically low mortgage rates. The affordable housing crisis has graduated from an issue discussed in political, academic, and professional forums to a topic of debate in the mainstream media. Articles appear regularly in business magazines signifying the influence of affordability on the economy. Companies have formed to meet the demand for affordable housing by offering below market rate apartment s earch services on the in ternet. The number of 13
terms to describe affordable housing has grown significantly as both advo cates and opponents of affordable housing initiatives promote their viewpoints. Although knowledge of the lack of affordable housing has increased, a universal solution has yet to be developed. Historical ly in the United States, many a pproaches to provide affordable housing have been implemented since the issue wa s first addressed by the federal government in the 1930s. For the next three decades, afford able housing was primarily provided through the creation of public housing. Pub lic housing was designed by the government, funded at the national level and administered at the local leve l, to produce subsidized rental housing for economically disadvantaged citizens. However, l ack of continued financial and political support and physical maintenance resulted in blight and despair. Affordable housing development in the last 50 years has focused on the need for a larger stock of units, as the increasing demand has outpaced production. Severa l large-scale programs have tried to address the demand. The Low Inco me Housing Tax Credit (LIHTC) program uses financial incentives to encourage developers to co nstruct or rehabilitate affordable rental housing for low-income households. Programs such as the federal Home Investment Partnerships Program (HOME) and Floridas State Housing Initiatives Partnership (SHIP) program also use government support to forge public-private afford able housing development partnerships. In both cases, the money is administered by the state a nd given to local governments in an attempt to more flexibly meet local needs. Inclusionary zoning and density bonuses are regulations that either require or reward private develope rs who produce affordable housing units when constructing new developments. While the national models for affordable housing, like the examples mentioned above, have been successful, the supply of affordable housing still falls woefully short of the demand. 14
Most of the programs are tied to government funding, which can be greatly affected by changes in administration and political agendas. Another broad criticism of ma ny of the affordable housing programs is their inability to secure permanent affordability. The LIHTC program requires affordability of the units for 15 years, af ter which a unit can return to market rate unless they are recaptured at an additional cost. Inclusio nary zoning regulations va ry in terms of length of affordability compliance, but there is no standard to ensure perpetual affordability. Recent movements in the field of urban planning acknowledge the importance of affordable housing in reaching their overall goa ls. Smart Growth incorporates measures to include housing choice. Smart Growth recognizes th at in order to achieve all of its objectives, providing housing opportunities to citizens is a critical component. Other objectives cannot be fully achieved if housing is not available, such as creating a positive quality of life or improving the economic health of a community. Smart Growth has been criticized for not addressing the housing needs of the hard to house population. However, the movement has the potential to serve as a mechanism to graduate affordable housing needs from a local issue to a regional one by incorporating it into pl anning decisions (Harmon, 2004). Case Study Context First settled in the late nineteenth century, Wi nter Park is a distinctive Florida community located in one of the fastest growing counties in the state. Orange County has a sizable tourismbased economy with a significant ho spitality job market. Early in Winter Parks settlement, the neighborhood of Hannibal Square was establis hed to house the citys African-American community. Through the 20th century, the city gr ew into a mid-sized Orlando suburb. Winter Park has become a preferred location for hi gher income populations. The city initiated a redevelopment effort with the creation of the Community Redevelopment Agency (CRA) in the early 1990s. According to the mission statement of Winter Parks CRA the redevelopment 15
efforts have been designed [t]o preserve and improve the residential neighborhoods through activities that empower residents, and to im prove commercial areas through activities that promote controlled economic growth (City of Wi nter Park CRA, 2007, p. 4). The CRAs efforts have been extremely successful economically and aesthetically, making Winter Park a model for urban planners interested in community re vitalization across the state (Briggs, 2007). However, the investment into business deve lopment, historic pr eservation, and cultural activity has further escalated living costs and home prices, resulting in land speculation. With an average value for homes in Winter Park at $340,804 in 2005, nearly double that for Orange County and the City of Orlando, gentrification became a widespread concern (Florida Housing Data Clearinghouse, 2007). Many of the long-term residents were priced out of the housing market (Briggs, 2007). The large incr ease in rent rates and apprecia tion in appraised home values leading to high taxes forced both renters and home owners to search for more affordable housing outside of the city. The opening of parcels formerly occupied by lower-income households enabled auxiliary redevelopment. Mansions a nd high-end businesses pushed further into the economically depressed and politically underrep resented west side neighborhoods, including Hannibal Square. Acknowledging the challenge associated with in creased living costs, city officials made the creation of new affordable hous ing and preservation of existing affordable units a priority for its Planning and Community Development depa rtment. Four affordable housing projects commenced in the early 2000s. An affordable housing neighborhood developed by the city, the reconstruction of railroad apartments, a partnership with Habitat for Humanity, and the creation of the Hannibal Square Community Land Trust (HSC LT) were all initiated with the intent of increasing or preserving the affordable housing stock. 16
The incorporation of affordable housing into the redevelopment efforts of the City of Winter Park brings up several critical questions. In an area with limited physical space and escalating market prices for land and housing, how does a city provide affordable housing? Additionally, in an affluent community with strong economic growth, why would its citizens support expenditures on affordable housing? The money, human capital, and critical land necessary to build affordable housing could be directed toward further high-end development. Affluent communities rarely support low-income development, as evidenced by the prevalence of NIMBYism throughout the country working agai nst such initiatives. Is it possible that the residents and officials of Winter Park recognize the social and economic benefits of diverse, mixed-income communities? Is it a reaction to a gr assroots effort of the lower-income residents? Are the efforts of Winter Park the most effici ent use of resources to accomplish affordable housing goals? The focus of this study is on the implementation of the Community Land Trust model in the Winter Park neighborhood of Hannibal Squa re. The Hannibal Square Community Land Trust (HSCLT) was incorporated in 2004. The firs t project completed by the HSCLT was a development of 10 affordable homes on a block in west Winter Park. In 2007, a groundbreaking ceremony was held to commence an extension of the HSCLT with four additional affordable homes. The implied success of the CLT model in Winter Park due to its expansion suggests community support for the shared-equity approach to creating affordable housing for lowincome households. By exploring the formation a nd structure of the HSCLT, an examination of Winter Park officials efforts to provide permanently affordable housing, combat gentrification, and integrate principles of Smart Growth is conducted. 17
The case study of Winter Parks HSCLT employs two approaches for analysis. First, the HSCLT is described in detail, particularly it s organization and methods of operation. Second, the study includes an assessment of the extent to which Smart Growth is currently used to guide HSCLT and of the potential for further incorp oration of Smart Growth principles by the organization. Significance of Study This case study contributes to a greater understanding of the CLT model in the context of providing affordable housing to a specific community. The study can add to the body of knowledge of affordable housing methods in ge neral, and the CLT m odel specifically. The information resulting from this study may guide other communities interest ed in forming a CLT. For CLTs already in existence, this study may provide insight into how Smart Growth can be included in their operations. Finally, this study co uld be used by the HSCLT to guide its future decisions in the operations and l eadership of the organization. Organization of Study The following study uses the descriptive case study method to asse ss the CLT model in Winter Park, Florida, and measures HSCLTs incorporation of theoretical urban planning strategies for the developmen t of affordable housing. Chapte r Two includes a review of background literature with definitions, examples and theoretical exploration of the Smart Growth movement, sustainable and mixed-inco me development, and the CLT model. The methodology of the case study is presented in Chapter Three, which is based on published studies of CLTs. The fourth chapter begins with a historical overview of th e city of Winter Park, a description of the affordable housing challenges its residents face and why the city chose to use the CLT model, and an explanat ion for selecting the HSCLT as the case study subject. Chapter Four also includes the findings of the anal ysis following the process outlined in the 18
methodology. The fifth chapter concludes the cas e study by relating the findings presented in Chapter Four to urban planning in the macro cont ext, and suggests areas for future research. 19
CHAPTER 2 LITERATURE REVIEW Before examining Winter Parks approach to providing affordable housing, a review of relevant literature on the structure of the CLT mo del and its ability to incorporate Smart Growth principles is presented. This chapter begins with definitions of Smart Growth, sustainability and mixed income development. The CLT model is described in detail, and the potential benefits and disadvantages associated with the model are ad dressed. Throughout the chapter, the role of the CLT model to meet affordable housing needs is reviewed. Smart Growth and Sustainabi lity in Land Use Planning Smart Growth promotes development that mitigates impacts on the environment, society and the communitys health. Yet, the term Smar t Growth embraces a variety of concepts in theory and in practice, so it should be perc eived as an evolving term (Harmon, 2003). The Smart Growth Network (SGN), a national organization sponsored in part by the Environmental Protection Agency (EPA), is dedi cated to promoting the principles of Smart Growth and its best practices (Sustainable Communities Network, 2004). The SGN asserts [g]rowth is smart when it gives us great commun ities, with more choices and personal freedom, good return on public investment, greater opportunity across the co mmunity, a thriving natural environment, and a legacy we can be proud to le ave our children and grandchildren (Cotnoir, 2006, p. 1). As a form of growth management, Smar t Growth addresses developments impact on a communitys quality of life, physical design, economics, the natural environment, health, housing, and transportation (Sustainable Commu nities Network, 2004). By focusing on these seven issues, SGN promotes controlling sprawl by creating compact, effici ent communities that offer choice, participation, and identity. SGN also maintains a specific list of principles that 20
21 define Smart Growth, which incorporate the issues it promotes as a basis for responsible development. There are ten principles that the SGN identifies as critical considerations for achieving Smart Growth. The principles define d here will be used for analyz ing the HSCLT later as part of the methodology and findings. Each principle is intrinsically linked to the others, as the requirements for meeting each principle and the poten tial benefits resulting from each principle are dependent on a comprehensive inclus ion of the all the principles (see Figure 2-1 ). Communities realize Smart Growth when their la nd use decisions coordinate the implementation of the ten principles: Housing opportunity targets the creation of housing for all members of the community, across all income levels (Sus tainable Communities Network, 2004). As there are a variety of types of households living in every commun ity, a variety of housing options should be available to meet the needs of each household type. Housing should vary in terms of size, type and cost of the home and location within the community. Walkable neighborhoods require that multiple fo rms of land use are lo cated within a short distance of one another (Sustainable Comm unities Network, 2004). To create walkability, mixed land use, safe and convenient walk ways, and pedestrian access is necessary. Physical, social, environmental, and financial benefits are all associated with walkable communities. Community involvement stipulates intera ction among residents, business owners, government officials, and other stakeholders to define the needs of the community and make land use decisions designed to meet those needs in a reciprocal manner (Sustainable Communities Network, 2004). A lack of co mmunity involvement may result in misdirected or even detrimental planning d ecisions. Investment and planning should be based on community involvement. Development of community identity enta ils defining the structural and social characteristics of an area (Sustainable Communities Network, 2004). Standards for development should ensure building design and land uses compatible with existing patterns in the community. Community distinctiveness l eads to strengthened cultural and economic health and results in identifiable community assets. Streamlined development decisions are nece ssary to engage private developers and investors, whom Smart Growth is depende nt on for success (Sustainable Communities Network, 2004). Streamlining requires making pl anning decisions and zoning regulations timely, cost-effective, and predictable for developers (Sustainable Communities
Network, 2004, n.p.). Historically, planning and zoning requirements have not enabled Smart Growth and may require adjustments to meet the streamlined development decisions principle. Mixed-use development is a product of placi ng various land uses near one another or combining multiple land uses on a single pa rcel (Sustainable Communities Network, 2004). A common form of mixed-use is comm ercial, retail or office space below residential units within a building. The benefits of mixing land uses include minimizing travel time for residents to obtain goods or services, bolstering economic vitality for businesses due to continual demand by increase d customer presence, and conservation of open spaces. Preservation of natural areas is achieved by limiting sprawl and greenfield development, protecting environmentally sens itive areas, and creating parks or open space within a community (Sustainable Comm unities Network, 2004). By conscientiously planning for natural areas, a community can improve the he alth of its e nvironment. Benefits also include healthier places to live, more aesthe tically pleasing views, and an overall improved quality of life for memb ers of the community. Multi-modal transportation options require a co mmunity providing various forms of travel for citizens to reach their homes, jobs, shopping and other places of in terest (Sustainable Communities Network, 2004). Some forms of tran sportation include public transit such as buses, accommodation for pedestrians and bicyc lists, and incentives for carpooling. The goal is to reduce the daily dependence of citizens on the automobile as the main form of transportation. Investment into established communities is centered on infill development (Sustainable Communities Network, 2004). Instead of unrestric ted development into open or fringe areas, communities should direct growth back into developed areas. Doing so takes advantage of infrastructure already in place and makes other aspects of the community, such as mass transit, more economical and practical. Compact building design involves optimizing land use by consuming the smallest amount of land to create the most efficient use of building space (Sustainable Communities Network, 2004). Often, this compels building up instead of building out. Traditional land use regulations limits vertical development, so other innova tions may be necessary to achieve compact construction. Dense development can reduce the impact on the environment, cost less for building operation, and increase the viability of mass transit. Proponents of the Smart Growth movement include environmentalists, transportation coordinators, and housing advocates (Harmon, 2003). The engagement of these diverse professions reflects the movements advocacy of a comprehensive approach to managing growth. 22
Principles of Smart Growth extend into ot her planning specializa tions like neighborhood sustainability, rural development, and regiona lism (National Neighborhood Coalition, 2000). Overall, local government officials, pla nning practioners, and the academic community enthusiastically joined the Smart Growth movement when it formalized in the late 20th Century. Opposition to implementing Smart Growth emerge d based on the perceived overuse and misuse of the term. For instance, critics claim that agencies used Smart Growth as a descriptive ploy to obtain funding or support for a development. Th e proposed development may have a component of Smart Growth, but the developer or sponsor do es not intend to create a true Smart Growth community (Zahniser, 2007). Also, when the concept is not clearly understood by developers, crucial elements may be overlooked that affect the entire functiona lity of the community. Therefore, Smart Growth has the potential to result in smart communities that do not fully meet the Smart Growth definition. Finally, critics claim that Smart Growth may actually increase the cost of housing due to increased demand for a decreased nu mber of developable properties, resulting in increased prices while reducing or even eliminating development on relatively inexpensive sites in outlying areas. Proponents counter that piecemeal application of Smart Growth principles reduces housing affordability; this occurs when one Smart Growth principle is implemented and the others are ignored (Arigoni, 2001). Housing prices rise as a result of increas ed demand for residences in a pseudo Smart Growth community, but without including affordable housing options, nothing exists to counter the effect of increased hous ing demand. Preferred Smart Growth development accommodates and encourages affordable housing development, which can occur by broadening the range of permitted housing types and effectively incorporating complimentary Smart Growth principles such as multimodal transportation (Arigoni, 2001). 23
During this period the term su stainability, which stems from the same intellectual branch as Smart Growth, began to be used (Godschalk, 2004). Sustainability also appeals to community leaders with a wide variety of interests a nd beliefs (Ross, 2007). In 1987, the United Nations World Commission on Environment and Developm ent (WCED) spearheaded an international effort to standardize the institution of sustaina ble development. WCED established the three Es to guide those interested in sustainabl e development (Berke & Manta Conroy, 2000). The three Es consist of the environment, economy, and equity. The general goal of sustainability consists of managing the three values through practices aimed at creatin g a decent standard of living for current and future generations while preserving the environment. Potential conflicts between any of the three values is anticipa ted and resolved based on balanced, equitable guidelines, a particularly i nnovative land use planning approa ch. Consensus among competing interests can occur because of a previously agreed upon vision. Philip Berke and Maria Manta Conroy (2000) examine comprehensive planning efforts to define and operationalize sustai nability. They create a definiti on of sustainability with six principles based on a thorough review of existing literature and professional experience. They then use a measurement technique to assess th e likelihood that existing policies result in sustainable neighborhoods and use the methodology to evaluate 30 comprehensive plans from localities across the nation. The resulting working definition of sustainability builds on balancing social, ecologic and economic values. It incorporat es the principles of creating and maintaining harmony with nature, livable bui lt environments, a place-based economy, equity, a polluters pay system, and responsible regionalism (Berke & Ma nta Conroy, 2000, 23). The review of the plans reveals no association between explicitly defini ng sustainability as a planning principle and creating plans that effectively promote sustainability. The evaluation led the researchers to 24
conclude that while the critiques of sustainability may be justif ied, this valuable planning tool should be further integrated into plans and im plemented to realize its potential benefits. Thus, sustainability has been endorsed as an energizing force in land use planning but is still considered by critics to be too vague a nd not sufficiently supported and implemented as a substantive planning strategy (Godschalk, 2004). Berke and Manta Conr oy (2000) support this finding given that the results of th eir evaluation are based on initial efforts, not mature and tested practices. An additional criticism of sustainability relates to the nature of the concept itself. In trying to resolve the conflict between the enviro nment, economy and equity, sustainability may foster a division among stakeholders. Furthermore, sustainability has the potential to create a false sense of hope and security. Sustainable neighborhood design may be employed in communities undergoing revitalizati on that desire improving infrastructure while at the same time promoting a continuance of the communitys existing way of life. In a dynamic community, maintaining the status quo may be unrealistic despite the goals of sustainable neighborhood development (Ikerd, 2007). If community officials in charge of the revitalization project are unaware of this potential pitfall, they may not follow the necessary steps to identify challenges to the communitys legacy and may react inappropr iately if they simply rely on sustainable neighborhood design practices to accomplish this goa l without greater vigila nce. Yet, even Scott Campbell, a commonly cited author who asks cha llenging questions regarding the applicability of sustainability in planning, resolves that the idea is still viable and should not be dismissed (Berke & Manta Conroy, 2000). The SGN claims that communities that institute Smart Growth as the guiding scheme for growth management will preserve the best of their past while creating a bright future for generations to come (Cotnoir, 2006, p. 1). Vi rtually the same statement was made about 25
sustainable development by the United Nati ons World Commission on Environment and Development (Berke & Manta Conr oy, 2000). This concept of preserva tion for the sake of future generations is one example of a shared prin ciple of Smart Growth and sustainability. In addition, the two planning movements advoc ate the creation of affordable housing for varying but complementary reasons. SGN define s housing choice as a critical Smart Growth issue so that Smart Growth development includes a broader range of options for housing in terms of size, location, and price. Several SGN prin ciples incorporate affordable housing as a component necessary to achieve the mission of Smart Growth. By enabling all households to live in a community, a low-income household has ac cess to services and infrastructure and experiences a reduced commute. This pattern prevents sprawl by creating an inclusive community and reduces the impact on the environm ent in terms of transportation impacts. The equity component of sustainability demands affordable housing so that every person in a community has the opportunity to live and work within its boundari es. Thus, vibrant and diverse places are created that uphold social and equity values (Berke & Manta Conroy, 2000). Mixed Income Development as a Solution For most of the 20th century, housing advocates argued that concentration of poverty is a negative social condition that should be avoided and reso lved (Jargowsky, 2001). High poverty areas often harbor serious criminal activity, high levels of unemployment, poor educational options, and lack of social capital for residents (Smith, 2002). From this the question arose, if concentrated poverty is detrimental, then is mi xed income community development the solution? Most housing advocates respond that it gene rally depends on the specific community. The basic theory supporting mixed-income development is that placing low-income residents in areas with higher income households will create opportunities for life advancement through access to better jobs, education a nd role models (Smith, 2002). Supporting the 26
development of social capital has emerged as a strong driver of comm unity development since the late 20th century (DeFilippis, 2001). Additionally, advocates for the creation of affordable housing use mixed-income development to count er protests from NIMBY proponents (Burchell and Galley, 2000). Smith (2002) found that [i]nc luding market-rate units might potentially reduce the subsidies needed for affordable units while overcoming protests against low-income housing in many communities (p. 1). Also, local governments tend to be more open to mixedincome developments rather than exclusivel y low-income developments (Myerson, 2005). In a study commissioned by the Neighborhood Re investment Corporation, Alastair Smith (2002) identified five general t ypes of mixed-income developmen t that range along a scale with one extreme being virtually market-rate housi ng with some moderate-income housing to the other being a mix of moderate, low and extr emely low income households. Mixed-income communities are generally created to deconcentrat e poverty, construct higher quality housing for populations usually forced into undesirable living conditions, or increase the affordable housing stock. While all three of the goals typically define mixed-income development, their effectiveness is limited based on the community in which they are located (Smith, 2002). Thus Smith (2002) does not recommend mixed-income as the silver bullet to address affordable housing needs, especially considering the risks associated with such forms of development. These risks include difficulties in financing and potential community opposition. Schubert and Thresher (1996) review three di verse communities that serve as examples of the effectiveness of mixed-income developmen t. Specifically, they examine whether an ideal mix of incomes exists, how to finance such developments, why market rate residents are necessary, and how to involve re sidents in the planning process. The three communities vary 27
greatly in providing answers to each question, whic h in turn demonstrates the variability in the research on mixed-income communities in general. Some of Schubert and Threshers (1996) results are consistent with Smiths (2002) findings. The significant complexity involved in creating mixed-income communities is one common finding. The public and private fina ncing required to create a mixed-income development usually involves the coordination of se veral sources to ensure the projects success. Securing and managing the financing options all a dd risk to the development, making it more challenging to fund. Schubert and Thresher (1996) and Smith (2002) also agree that simply mixing residents with different incomes does not result automatic ally in a healthy and vibrant community. Lowerincome residents need financial, educational, and social resources and assistance directly available to them to break the cycle of poverty. Mixed-income development intends, in part, to break the poverty cycle. Yet, Sc hubert and Thresher (1996) assert getting the necessary resources to the lower-income populations requires a di rected effort beyond sole ly placing lower-income residents near higher-income ones. Smith (2002) argue s that mixed-income developments so rarely benefit the extremely low income populati ons and that no inherent mechanism exists to connect the residents in need of se rvices to the actual services. In sum, mixed-income development has gain ed some support but with several conditions. Ideally the community must provide financial a nd legislative support to enable the development process to occur. Lower-income residents w ithin the mixed-income communities may need additional assistance to optimally benefit from liv ing in a diverse community. In some cases, the question remains: is it the best allocation of resources for low-income residents? 28
The Capacity of the Community Land Trust Model to Create Smart, Sustainable Affordable Housing As the need for affordable housing intensif ies in the U.S. and devolution of federal housing programs continues, local and state gov ernments as well as non-profit providers are offering a growing number of diverse and crea tive solutions. Merging the concepts of Smart Growth and sustainability and applying them to affordable housing development is a relatively new idea. Community Land Trusts (CLTs) have been touted as a solution for some neighborhoods. The CLT model creates perman ently affordable homeownership, thereby meeting the Smart Growth and sustainability aspi rations of preserving an equitable way of life (National Housing Conference, 2005 ). The degree to which the principles of Smart Growth and sustainability are achieved by the CLT model can be judged through a review of the CLT mechanism itself. Introduction and Brief History of Community Land Trusts The Community Land Trust model was first formally developed in the United States in the 1960s (Institute for Community Economics, n.d.). It is considered an alternative form of creating permanent affordable housing compar ed to public housing and other traditional government subsidized programs (Harmon, 2004). While each CLT is unique in its exact function and execution, several common components of a CLT exist. CLTs provide affordable housing opportunities by leasing housing to inco me restricted households and owning the land underneath with the intention of increasing the perpetually affo rdable housing stock. Usually a CLT is a non-profit organization started by a group of community ac tivists or affordable housing advocates. In 1968, Robert Swann and other civil rights activists first proposed a CLT development in the United States in Alba ny, Georgia. Called New Communities Inco rporated, this CLT 29
comprised over 5,000 acres of rural land with the intention to develop affordable housing for African-American farmers. Though ultimately ne ver developed, it did serve as a practical backdrop for a book by Swann and his colleagues. The lessons learned from the first proposed CLT and from fellow CLT practioner Ralph Bo rsodi were outlined in the 1972 book called The Community Land Trust: A Guide to a New Mode l for Land Tenure in America (Davis, 2006). Though initially slow to catch on in the United States, urban planners have since embraced the CLT model (see Figure 2-2 ). In the first 15 years following the founding of New Communities Incorporated, only a handful of CL Ts existed. The following 15 years, however, resulted in an addition of over 100 CLTs in a majority of the states. In 2006, the National Housing Institute counted 162 CLT organizations (Davis, 2006). The growth in popularity can be partly expl ained by the increase in support for the CLT model at the national level (Davis, 2006). In 1992, an amendment to the Cranston-Gonzales National Affordable Housing Act officially de fined a Community Land Trust as a community housing development organization, thereby en abling a CLT to qualify for HOME funding (Burlington Associates, 2005). In 2003, Fannie Mae released a memorandum describing new options for financing homes in CLTs using Fann ie Mae services (Fanni e Mae, 2003). The agency did this to enable lenders to use Fannie Mae pr oducts through a streamlin ed approval process and create greater flexibility in financing (Fannie Mae, 2003). In addition to legislative and regulatory advances enabling the creation of CLTs, an organizational effort has been underway to estab lish a national standard and gathering place for CLT institutions. Several groups now provide resources and technical assistance for CLT members and those interested in the CLT model. The Institute for Community Economics (ICE) was the successor organization of Swanns Intern ational Independence Institute in the 1960s. In 30
addition to financing and techni cal assistance, this organizati on helped establish the National Community Land Trust Network in 2000, which became an independent organization in 2005 (Institute for Community Economics, n.d.). The Nati onal CLT Network strive s to create national standards for the formation and institution of C LTs while elevating the level of awareness and acceptance of the CLT framework in affordable housing development (National CLT Network, 2006). A third group that supports CLTs is the Lincoln Institute of Land Policys Community Lots organization, which provide s research and education rega rding the CLT model (Lincoln Institute of Land Policy, 2004). The Characteristics of the CLT Model The Community Land Trust model can be explained by describing the general components that characterize each CLT organiza tion. The structure that each specific CLT organization may employ can also be genera lized to demonstrate the adaptability and applicability of the CLT model. There currently are no laws that state the specific requirements of what constitutes a CLT, with the exception of the brief definition created by the 1992 amendments to the National Affordable Housing Act, which will be discussed later. Regardless, in recent years the model has been discussed in greater detail and frequency by academics, practioners, and research institutes. The resulti ng publications will be the basis for explaining the CLT model. The Cranston-Gonzales National Affordable Housing Act was amended in 1992 in part to add the CLT as a type of organization qualifie d to receive HOME fundi ng ([t42 U.S.C. 12773]). It defined a CLT as a community housing develo pment organization and specifically excluded for-profit organizations from its definition.1 The activities that define a CLT, as stipulated in s 1 In the discussion following the definition provided by the Cranston-Gonzales National Affordable Housing Act, the CLT is required to declare itself a type of non-profit or ganization in order to join the national CLT associations. 31
233(f) of Cranston-Gonzales National Affordab le Housing Act 1992 [t42 U.S.C. 12773], include that it: Acquires parcels of land, held in perpetui ty, primarily for conveyance under long term ground leases; Transfers ownership of any structural improve ments located on such leased parcels to the lessees; and Retains a preemptive option to purchase any such structural improvement at a price determined by formula that is designed to en sure that the improvement remains affordable to low-and moderate-income families in perpetuity (s 233(f)(3A-C) of Cranston-Gonzales National Affordable Housing Act 1992 [t42 U.S.C. 12773], formatting added ). Further, it is an organization Whose corporate membership that is open to an y adult resident of a particular geographic area specified in the bylaws of the organization; and Whose board of directors--(A) includes a majority of member s who are elected by the corporate membership; and (B) is composed of equal numbers of (i) lessees pursuant to paragraph (3 )(B), (ii) corporate members who are not lessees, and (iii) any other category of persons described in the bylaws of the organization (s 233(f)(4-5 ) of Cranston-Gonzales National Affordable Housing Act 1992 [t42 U.S.C. 12773], formatting added). Typically, CLTs use a ground lease similar to a commercial development lease, wherein the land and the improvements are owned by separate entities (Abromowitz, 1991). Although the legislation states that a CLT cannot be a for-pro fit organization, the national associations are more specific, stating that a CLT must be a non-profit organization (Greenstein and SunguEryilmaz, 2005). Having a 501(c)(3) or (4) non-pr ofit organization status enables the CLT to operate tax-free. As a non-profit organization, a CLT does not to make a profit from the land lease. Rather, by minimizing the cost of the la nd, a home becomes affordable to lower income 32
households. A minimal lease fee may be require d by the CLT to cover operational costs and ensure a level of c ontrol over the land. The National Housing Institute (Institute) published a manual describing models of resale-restricted, owner-occupied housing. CLTs are a form of such housing, along with limited equity cooperatives and deed-res tricted housing. The Institute presen ts a list of twelve elements that must be considered for creat ion of shared equity homeownersh ip. The list represents in brief the elements of importance to a CLT, includi ng duration, decontrol, e ligibility, disclosure, occupancy, legacy, maintenance, improvements, financing, the resale formula, the resale process, and enforcement (Davis, 2006). The National CLT Ne twork (Network) created a set of standards for all CLTs interested in obtaining membership in the organization. The list of standards contains nine characteristics th at all CLTs should incorporate into their operations, including purpose, corporate status, land ow nership, homeownership, permanen t affordability, service area, corporate membership, board composition and boa rd selection (Davis, 2006). This list also allows for alternative measures and categorizes a CLT as either classic or variation within each element. Chapter Three of this study pres ents a review of the Networks list of characteristics as a part of the methodology. What differentiates CLTs from other afford able housing programs is the express goal of creating long-term affordability. The CranstonGonzales Act defined a CLT as working for advocating affordability in perpetuity, but the specific circumstances of each CLT may require different lengths of time. A standard ground leas e between a CLT and a homeowner is 99-years, effectively creating a permanent affordable housing unit (Davis, 2006). Homeowners have the ability to bequeath their homes to their heirs or to a person of their choosing, but the recipient must be qualified to meet the ground lease and in come requirements of the CLT. There are three 33
common methods for inheritance: the CLT ma y establish no limitations, allow only family members to retain the residence regardless of inco me level, or allow only heirs that meet strict eligibility requirements to inhe rit the CLT home (Davis, 2006). If a homeowner chooses to sell the home, pe rmanent affordability must be secured and is most commonly accomplished through the requir ements of the ground lease (Abromowitz, 1991). The most common method is for a CLT to have the first right of re fusal, giving the CLT the option to buy the improvements on the land it ow ns from the homeowner before the private market has access to buy it (Pastel, 1991). Even if the CLT declines to purchase the home or does not have the right of first refusal, a price fo rmula likely exists to en sure that the home will continue to be affordable to th e next resident. Usually, the price for the home is calculated based on a formula contained in the ground lease. This formula effectively limits the amount of equity the homeowner gains from selling the home. The formula may be based on several considerations, but most commonly the price is related to the change in the Consumer Price Index, is adjusted for inflation, is a percen tage of the market price for the home and improvements, or is linked to the homeowners mortgage (Davis, 2006). Initial and subsequent buyers must meet th e eligibility criteria established by the CLT. Often the buyer must meet income restriction requirements (Dav is, 2006). These restrictions may be a percentage of Area Median Income (AMI), usually in th e range of 60% to 150%. CLTs require the applicant alre ady be a member of the community in which the CLT is located. This latter qualification is often rela xed if no eligible buyers can be found. In the case of a homeowner becoming ineligible after obtaining the CLT home CLTs rarely force a homeowner to sell the home or raise the fee of the ground lease (Davis, 2006). 34
Potential CLT homeowners may experience unique challenges in financing the purchase of the home due to the separate ownership of the house and the land. Low-income buyers already face difficulties due to the requirement of saving for a down payment or meeting the minimum income requirements to prevent a cost burden. Lenders that do not fu lly understand the CLT model often assume a higher risk and may reject or deter a CLT buyer. However, the CLTs themselves have learned to work with and negotia te between lenders and buye rs so as to enable CLT home sales and ensure that the financi ng structure will safeguard the CLT home from losing its affordability if a homeowner defaults (Bergeron, 2006). As a testament to the growing popularity of CLTs and demands for financ ing, Fannie Mae created finance packages specifically for funding future CLT residents. Fannie Mae has enabled le nders to finance CLT home purchases using a wider va riety of options for mortgages, refinancing, and qualification requirements (Fannie Mae, 2003). Also, Fannie M ae created a streamlined process for approval and new appraisal guidelines specific to C LT homes, which eases the relationship between lender and CLT and speeds the lending process (Fannie Mae, 2003). As of 2005, there were four major programs well-suited for CLT homebuyers in need of financial assistance. Funding fr om the HOME program can be designated to CLTs for assisting buyers at 80% AMI or below (Greger, n.d.). However, the maximum loan to a buyer can only equal up to 25% of the purchase price. Flor idas Homeownership Assistance Program (HAP) provides two options for CLT home buyers, buying down the cost of a loan or helping with a down payment. Finally, Floridas Single-Family Mortgage Revenue Bond (SFMRB) program is available if the CLT buyer is a first time homebuyer. The SFMRB loans usually have belowmarket interest rates and provide clos ing costs and down payment assistance. 35
Once a homeowner is approved and purchases a CLT home, he or she may join the CLT board (National CLT Network, 2007). In some cas es all homeowners are members of the board, but in larger CLTs only a representative group se rves. The board also consists of interested members of the greater community as defined in the CLTs by-laws and includes government officials and corporate members of the CLT (Greenstein and Sungu-Eryilmaz, 2005). The board is commonly divided equally among the three groups According to Abromowitz (1991), [s]uch multiple interest on the board are intended to keep the CLT from moving too far in the direction of either community or indivi dual interests (p. 675). In this way, the CLT can remain accountable to the residents that it serves and the broader co mmunity (National CLT Network, 2007). The CLT monitors and adjust s the use of the land that it owns through the ground lease it creates with the homeowner (Abr omowitz, 1991). Aside from establis hing a relationship with the homeowner and the improvements on the land (suc h as a home), the ground lease may contain several elements regarding occ upation and maintenance of the land. The CLT can limit who may occupy the home. By controlling occupancy, the CLT can prevent the homeowner from subletting or acting as an abse ntee landlord (Davis, 2006). Preven ting subletting is especially important in markets of high real estate appreciation where financ ial benefits of renting the home could entice the owner to do so (Abromowitz, 1991). Requiring a certain level of maintenance can also be controlled by the ground lease. The le vel of maintenance is us ually linked to the local governments codes and zoning requirements. Alternatively, maintenance may be based on the homeowners insurance plan, on the premise of prevention of significa nt repair costs, or to meet the neighborhood quality st andard (Davis, 2006). 36
Enforcement of the ground lease is essent ial for the CLT to retain control over its affordable housing community. A homeowner that does not comply with the ground lease may have his or her rights of possession terminated at the discretion of the CLT (Abromowitz, 1991). However, the CLT does not have to directly monitor the activities of the homeowner. An external company may be employed, or the CLT ma y wait to review the pr operty at the time of sale and impose any necessary penalties then (Davis, 2006). By using an outside company or waiting until after the period of ownership ends the CLT can minimize its role in property management. An alternative form of controlling the re sale activities of the homeowner is by attaching a lien on the homeowners mortgage or creating a deed restriction (Abromowitz, 1991). The CLT Model in Practice The CLT model has received broad support fo r its effectiveness in creating permanent affordable housing (Harmon, 2003). Most agree that the mechanism can be very successful when applied in the right community conditions and when all elements of the CLT model are comprehensively developed (Bergeron, 2006). Ha iled as a flexible option for affordable homeownership, CLTs can vary greatly in size of the geographic area covered, number of homes and in its financial and social impact on the community (Davis, 2006). CLTs have also been credited with combating a broad range of social problems associated with community development and change; they support comm unity revitalization, deconcentrate poverty by accommodating mixed-income development, and prevent gentrification. The Burlington Community Land Trust is a national model. As one of the most innovative and thoroughly develo ped CLTs, its history and the practical experience of its organizers are frequently referenced and anal yzed by practioners and academics. Created in 1984, BCLT was formed to increase homeownership opportunities for low and moderate income households while responsibly preserving the ne ighborhoods of Burlington, Vermont (Davis and 37
Demetrowitz, 2003). Its composition closely resemb les the classic characte ristics of a CLT as defined by ICE, due greatly to the fact that it was developed with a ssistance from ICE itself (Davis and Demetrowitz, 2003). The BCLT drafted a five-year strategic plan in 2004 to clarify and solidify its purposes and goals. The BCLT contributes to home ownership, single family housing, and community development and meets other locally defined goals that support these primary initiatives (Harold, 2004). Recognizing its role as a national model, BCLT states in its five-year strategic plan that its objective is to serve as a leader for advocacy, mentorship, product development and further innovation (Harold, 2004). The BCLT has earned its reputation of leadership in several forms. At the local level, the BCLT has proven itself as a significant and lasting institution within the community. It has a substantial property ownership port folio as one of the largest re sidential property owners in the city (PolicyLink, 2007). It has been in existe nce long enough for many of its properties to be resold. Those resold homes have sustained lo w-income homeownership, thereby allowing the BCLT to realize its mission. At the state level, the BCLT has influen ced the designation of funding to benefit CLTs. In Vermont it has beco me standard for HOME and CDBG funds to be designated for CLTs (PolicyLink, 2007). Also, a financing program fo r resale-restricted, perpetually affordable homes was created by the Vermont Housing Finance Agency (PolicyLink, 2007). Two nationally recognized leaders in CLT an alysis and research conducted an evaluation of the BCLT in 2003 to determine the effectivenes s of the CLT model in realizing its goals. Davis and Demetrowitz (2003) used BCLT as the fo cus of their case study. They found that the BCLT met and exceeded expectations. Afford ability was created and maintained, the 38
neighborhoods containing CLT homes sustained st ability, low income persons were effectively served, modest equity was created for homeowner s, the homes increased in overall value, and housing activity resembled an open market in terms of residential mobility. The only qualification given by the authors re garding the applicability of th e results to CLTs in general addressed the small sample size used for the an alysis, noting that the particular market and locational characteristics may ma ke it difficult to generalize the findings. Yet, because BCLT represents the classic CLT model, it is plausi ble that other CLTs woul d experience similarly positive effects. BCLT exemplifies successful comm unity revitalization and therefore, will be used as a component of the methodology to analyze HSCLT later in this study. NIMBYism is one of the most common forces that prevents the creation of affordable housing in affluent communities. Another problem in areas of concentrated high-income is finding builders and financial institutions willing to create and support affordable housing developments. The idea of integrating lower inco me residents into affluent neighborhoods has gained momentum and mixed-income developmen t has become a prevailing objective in urban planning practices (Schwartz and Tajbakhsh, 1997). Realizing this mixed-income goal by crea ting affordable housing opportunities is demonstrated in an Albuquerque, New Mexico C LT. Begun in 1996 in the traditionally Hispanic neighborhood of Sawmill, the Sawmill Community Land Trust (SCLT) is located in Albuquerque, New Mexico (PolicyLink, 2007). Be tween 1981 and 2000, home prices in Sawmill quadrupled, effectively pricing out the low-income residents that historically resided in the area (PolicyLink, 2007). The sizeable increase in income and population growth in the area during the late 1990s motivated residents to organize toge ther to preserve their community. The SCLT includes the former grassroots organizations of the Sawmill Advisory Council and the Sawmill 39
Community Development Corporatio n that were formed to protect the environment (PolicyLink, 2007). The SCLT incorporated the goals of the environmental groups by buying environmentally sensitive land as conservation or residential si tes. Still, the primary purpose of the SCLT from the beginning has been to create lasting affordable housing for the area residents while involving them in the redevelopment of the Sawmill co mmunity (Sawmill Community Land Trust, n.d.). The SCLT has been successful in accomplis hing its goals due to its well organized structure that meets the needs of its residents. From the outset, SCLT created and upheld a set of objectives based on its mission. The goals decide d upon at the beginning included specifically helping households earning 80% of AMI or less, constructing context sensitive buildings, involving residents in the development proces s, and developing the economic community in addition to the residential options (Sawmill Co mmunity Land Trust, n.d.). One of the first developments of the SCLT served as an example of the organizations potential and as a promise to the community of its intent to preserve the character of the communit y. This project entailed building seven housing units below market rate in infill areas within Sawmill (PolicyLink, 2007). After completion of the firs t project, the SCLT adopted a five-year plan in 2003 to continue its efforts as a collabora tive organization representing all interested parties. The next set of initiatives includes completing the Arbolera de Vida neighborhood residential development and planning for the neighborhoods economic development, expanding into other neighborhoods and increasing its membership ba se, and acting as an organization that is financially self-sufficient and nationally i nnovative (Sawmill Community Land Trust, n.d.). The SCLT works in accordance with the Sawmill Me tropolitan Redevelopment Area Plan as it partners with the local government and community members to ensure the success of its efforts. 40
The methods employed by the SCLT have pr oven effective as the organization has achieved internal and external success. The pl ans for the Arbolera de Vida neighborhood alone call for 100 affordable units to be constructe d. This ambitious development objective of the SCLTs five-year plan shows the substantial prog ress the organization has made from its initial seven housing units. The SCLT further helps residents by acquiring tax exempt status for the CLT land and passing the savings onto the residents (PolicyLink, 2007). In an area of high and rising land prices, the tax exemption is an increas ingly important asset for low-income families. Additionally, [t]he Sierra Club recently cited SC LT as a Smart Growth Success Story in a 50state survey of innovative in itiatives that stem suburba n sprawl (PolicyLink, 2007). For many communities experiencing rapid change gentrification is a challenge that can be countered with the creation a CLT. Gentri fication is defined as a change process in historically low wealth communities that results in rising real estate values coupled with shifts in the economic, social and cultural demographics and feel of the communities (NeighborWorks America, 2005). Gentrification o ccurs often after a substantial reinvestment in the community begins. Many times, this conversion results in the removal or dispersion of the dominant racial or ethnic population(s) that originally occupied the neighborhood. In fact, the SCLT specifically aspires in its mission statement to prevent the exclusion of its Hi spanic residents as the area revitalizes (Sawmill Community Land Trust, n.d.). The CLT model addresses gentrification in a number of ways. First, a CLT incorporates all the stakeholders of the community in th e planning and managing of the entrusted land (Jacobus and Brown, 2007). Since the CLT homes are designed for the low-income population, those residents being pushed out by higher-income immigrants to the area can find refuge in the affordable housing created by the CLT. They can also serve on the CLT board to represent the 41
population undergoing gentrification. While Sawm ill is predominantly a Hispanic community, other minorities living there such as African-Ame ricans and Native Americans are part of the SCLT membership. Thus, the SCLT provides on outlet for influence over the revitalization of the Sawmill community to all affected groups of pe ople. Second, since a CLT often produces new housing restricted to households at given income levels, residents wanting to move into the community who would cause gentrification are not qualified to purchase a CLT home. Finally, a CLT is a grassroots organization usually created by concerned citizens and advocates already in the community. Therefore, resi dents perceiving the occurrence of gentrification can legally organize to prevent an influx of new residents capable of financially forcing out traditional residents. In the SCLT case, the Hispanic reside nts showed great support for the CLT form of ownership because it coincides with their trad itional way of life under Spanish Land Grants while restricting higher income households from purchasing CLT homes (Sawmill Community Land Trust, n.d.). The reasons residents choose to reside in a CLT home vary. While the majority of CLT residents have lower income levels, the dem ographic characteristics of each household vary (Davis and Demetrowitz, 2003). Younger households in CLT homes may choose the affordable unit as a stepping stone while developing careers, potentially living in the home for a limited amount of time. Families in CLT homes may live th ere to stabilize their finances while raising children, thereby staying in the CLT home fo r a longer time period. Elderly households may choose CLT homes as a place to retire, especial ly if they are long-term residents of the neighborhood who are in danger of being displaced and/or relyi ng on a restricted income. The differing lengths of time each household stays in the CLT home has various implications. Shortterm residents and mid-term residents benefit fr om the affordable home because they may not be 42
capable of paying for housing without outside assi stance. Providing housing to these populations through the CLT prevents total loss of the public subsidy used to house them by way of the limited-equity resale formula. Long-term resident s benefit from an established social network and predictable, affordable housing expenses whil e perpetuating the investme nt of subsidies used to make the home affordable by preventing an in crease in housing price that would result without the limited equity resale restrictions. The CLT model is vulnerable to certain pitf alls if not created with acute attention to detail. The greatest issue concerns the legality of the split of control between landowner and lessee. Although the dual owners hip concept commonly occurs in commercial development, the residential use of the land changes the inherent legality of the contract between the two parties (Pastel, 1991). Legal analysts warn that the CLT model may face challe nges on the basis of violating the Rule Against Perpetuities or the restraints on aliena tion (Abromowitz, 1991 and Pastel, 1991). Currently a CLT has not been specifically prosecuted for either violation (Abromowitz, 1991). There is some context, in particular for the st ate of Florida that demonstrates the need for the CLT to protec t itself from such prosecution. Condominium associations have been brought to court in Florid a questioning the legality of their restraints on residents. While the rulings f ound that legality depends on each cases specific situation, these cases set a precedent for interpretation of a CLTs modis operandi (Pastel, 1991, p. 307). The concern over the Rule Against Perpetuities stems from the CLTs right for first refusal to purchase the property should the hom eowner decide to sell (Abromowitz, 1991). Also, the fact that the repurchase price for the home is less than the fair market value of the property and any improvements made by the homeowner is usually considered unlawful when the homeowner is not given a choice (P astel, 1991). Yet, the price pa id by the CLT or a third party 43
buyer is the same as the price predetermined by th e resale formula in the ground lease. Thus, the CLT is not guilty of violating the law (Paste l, 1991 and Davis, 2006). As long as the CLT executes or declines its option to buy within a reas onable time frame, the legality of the restrictions is supported by the courts (Pastel, 1991). By limiting the homeowners resale price, requiring CLT approval for conveyance of the property, or applying use restrictions on the homeowner of the property, the CLT preserves the quality and affordability of the property (Paste l, 1991). Simultaneously, it potentially breaches the law of restraints on aliena tion (Abromowitz, 1991). This question of property rights concerns whether a CLT restricts the homeowners freedom in using and conveying his or her property in whatever way desired. To answer the question, the legal system uses a test of reasonableness with regard to the purpose and breadth of th e restraint (Pastel, 1991, p. 307). Courts have supported other forms of communal housing that can be related to CLTs. The Florida case of Seagate Condominium Association v. Duffy resulted in the courts approval of subleasing restrictions in the inte rest of the residential community (Pastel, 1991). Ultimately the social benefits associated w ith a CLT should be more important than the possible restraints on alienabi lity. The CLT should expressly inform the homeowner of the constraints. This may be done through an orie ntation session for interested homebuyers, clear and explicit descriptions of the restrictions in the ground lease and other legal documents, and by requiring future homeowners to work with indepe ndent legal advisors prior to purchase (Davis, 2006). Thus, the CLT model is an innovative strate gy that creates and ma intains affordability and has the potential for great success when implemented correctly. Certain community conditions are better suited for optimally instituting a CLT. Communities can effectively 44
incorporate local characteristic s into their CLT and can create permanently affordable housing options for their residents. Smart Growth, sustai nability and mixed-income development serve as complementary urban planning strategies for CLTs. Understanding thes e characteristics and connections assists in analyzing the HSCLT as described in the methodology. 45
Housing Opportunity Streamlined Development Decisions Mixed-use Development Walkability Community Involvement Smart Growth: Controls sprawl, creates efficient communities, offers Multimodal Transportation Development of Community Identity Investment into Established Communities Compact Building Design Preservation of Natural Areas Figure 2-1 Demonstration of Interrelationship among the Smart Growth Networks Smart Growth Principles 46
Number of CLTs created by decade 4 24 39 52 0 10 20 30 40 50 60 1970s 1980s 1990s 2000s Decade Figure 2-2 The Number of CLTs Created in the United States by Decade Source: Based on Sungu-Ermilmaz and Greenstein, 2007. 47
CHAPTER 3 METHODOLOGY To understand the CLT model and assess its capability in effec tively instituting the principles of Smart Growth, the descriptive case study approach will be used. The descriptive case study informs the reader of a th eory, place or event. The streng th of the descriptive form is the flexibility of its design and its ability to in corporate several types of information into an investigation. Descriptive case studies accommod ate qualitative examina tion of a subject(s). Weaknesses in the descriptive form include potential difficulties in gene ralizing the findings of the diverse range of CLTs. Still, generalization is possible accordi ng to several researchers in the field of qualitative analysis (Yi n, Levy, and Stake, as cited in Tellis, 1997). Generalization is accomplished through a case study when a test of a th eory or event is conducted using practical examples. Discovery of meaning can be accomplished when multiple viewpoints of the subject are explored. Using multiple triangulation of information confirmed across several sources achieves validity. For this analysis, triangul ation will be employed, as several forms of examination will be conducted. Reliability is attained when the research follows a repeatable methodology. The examination of HSCLT is base d on a methodology used in other published research studies, which will be further explained in the following subsections of the methodology. The analysis used in this study can also be applied to other CLTs, thereby supporting its reliability. Data Sources The evaluation of the HSCLT will include qua ntitative data from multiple sources and qualitative material from documents, interviews and site visits. Documents related to the HSCLT including the by-laws and ground lease w ill offer information on the operation of the 48
49 organization. The organizational documents ar e required by law for the creation of a CLT, therefore they should be considered an objective source of information. Interviews were conducted with officials wo rking in relation to the operation of the HSCLT (see Appendix A for the IRB approved consent form). The interviews are semistructured in format, allowing the investigator to gather essential information as well as insight derived from additional discussions with the interviewees. Questions relate to the three key parts of analysis described in this methodology. Discussion will continue for clarification until the underlying principle is revealed and will stop when the underlying question is answered, and this information will later be validated by alternative sources if possible. Extra information provided by interviewees may be used to enhance the analysis, to serve as examples, or to enlighten the investigator. To combat the potenti al of investigator bias in in corporating the re sponses of the interviewees, information included in the analysis will be limited to the facts presented by each interviewee. Information given by the interviewees that may be perceived as biased will be checked for validation to the grea test extent possible. The Univer sity of Floridas Institutional Review Board approved the questions prior to them being asked in the interviews by the investigator. The investigator followed the standa rd procedure of acquiring informed consent of the interviewees, audio taping the interviews for transcription at a later time, and destroying the transcriptions after completion of the analysis. Three formal interviews will be conducted to capture the necessary information for the evaluation. The director of the HS CLT, Bedilia Campbell, will provide insight into the functions of HSCLT, its future goals and plans, and the history of the organi zation. The Winter Park Planning and Community Development Director, Je ff Briggs, will also be interviewed for his perspective on the role of the HSCLT in the Community Redevelopment Agency (CRA) and the
greater community of Winter Park, Florida. Sher ry Gutch, the manager of the Winter Park CRA, will be asked her assessment of the impact of the HSCLT on the community and details about the activities of the organization. All three official s will be asked to assess the impact of creating the HSCLT consistent with Smart Growth prin ciples for the Hannibal Square neighborhood and greater community. The additional forms of data used in the cas e study are a site-visit analysis, a review of the comprehensive plan of Winter Park, and collection of data regarding the cost of housing in Winter Park. A site-visit analys is will be conducted by the investigator. By visually evaluating the site of the HSCLT and the adjacent neighborhoods within the greater community of Winter Park, the investigator will gain context for the study and obtain visu al confirmation of the organizations activities and the physical environment. The comprehensive plan or growth management plan provides insigh t on the issues of importance to city officials and the broader community of Winter Park. The document guides development and activities relating to the physical and social composition of the city. The state of Florida requires each local gove rnment to draft a Growth Mana gement Plan, which is subject to detailed review by Floridas Department of Community Affairs. Thus, it serves as a reliable source of information on the local government s regulations and management. It also demonstrates how the local government institutes state-mandated planning requirements such as concurrency. Data on housing costs, income levels, and ot her demographics of th e citizens of Winter Park will come from both the Winter Park CRA Strategic Plan and the Florida Housing Data Clearinghouse (FHDC). The data will be analyzed in both static and time-series format to show changes over time in the city and the current state of the city. The Winter Park CRA Strategic 50
Plan includes data complied on characteristics of the residences exclus ively residing in the CRA.1 The Shimberg Center for Affordable Housing in the University of Floridas School of Building Construction established the FHDC to incorporate dem ographic and housing data from sources like the U.S. Census, and to make this data available to local governments for housing planning throughout the state. The case study of HSCLT is organized into two parts. The fi rst part compares the HSCLT to the classic CLT model. The function of HS CLT is then described based on a national study of CLTs to provide an unders tanding of this CLT within the broader context of these organizations. The second part of the analysis explores the extent of HSCLTs activities that align with Smart Growth principles. A synthesis of all the information is then compiled to assess the situation in the case study area. Part 1: Descriptive E valuation of the HSCLT The scope of evaluative research published on the formation, operation, and impacts of CLTs is extremely limited. Most information availa ble serves to explain th e structure of the CLT model, usually comparing the classic option to the variations used in different communities. However, practioners, policy makers, analysts, and community development institutions are increasingly demanding further rese arch to better understand the bread th and utility of the CLT. One significant evaluative study explores the CLT model as a means to produce perpetually affordable housing. Davis and Demetrowitz (2003) analyze resale data of homes in the Burlington Community Land Trust (BCLT). The authors first evaluate the structural components of the BCLT as a qualitative assessmen t. The authors selected BCLT because it best represents the classic CLT model based on its duration, size, and the fact that it was created with 1 The data come from analysis provided by the FHDC and ESRI. ESRI is a corporation that designs geographic information system software and data. 51
the aid of the ICE. To determine the BCLTs cap ability in meeting certain defining goals, the authors then test six elements.2 Three elements represent community benefits and three represent individual benefits. Ea ch element is analyzed individua lly using data on the resale of BCLT homes over a 14-year period. The six elements are then compared and weighted against one another to find if the supposed benefits of the CLT model achieve the balance between the community and the individual, and result in permanently affordable housing. The authors conclude that BCLT did achieve a ll the CLTs goals of permanent affordability and realized the purported benefits of the CLT model. The results also provide specific numerical data for the case study itself. The BCLT case study provides a foundation for evaluating the HSCLT because the methodology can be adapted to analyze the C LT models relation to achieving Smart Growth objectives. To the extent that the HSCLT meets th e classic CLT criteria, as in the case of BCLT, the findings of the case study re late to this CLT model overall. In 2005, the Lincoln Institute of Land Policy (L incoln Institute) a nnounced its intent to examine CLTs by posing six questio ns of them. Twenty-five professionals from a broad range of analytical and practical backgr ounds created the research questi ons during a roundtable meeting brought together by the Lincoln Institute and the ICE (Greenstein and Sungu-Eryilmaz, 2005). The purpose of creating the rese arch agenda was to establis h a knowledge base from which practioners, academics, lenders, and policy makers could make informed decisions about CLTs and their implementation. Responding to the initiatives set forth by the Lincoln Institute, Sungu-Eryilmaz and Greenstein (2007) drafted a working paper explor ing the characteristics of the organizational structure of the CLT model. This groundbreaki ng study (referred to as the Lincoln Institute 2 The elements tested by Davis and Demetrowitz (2003) were derived from the Institute for Community Economics The Community Land Trust Handbook Emmaus, PA; Rodale Press, 1982. 52
study) establishes a comprehensive knowledge ba se of the CLT model resulting from surveys conducted of all known CLTs in existence as of late 2006. The survey response rate was 64%, with 119 of 186 possible CLTs responding to the su rvey. The findings of the Lincoln Institute study present an overview of how and where the model is bei ng used across the nation. The survey included questions regarding the standa rd characteristics of CLTs and requested an explanation of any varian ces from that standard It also addressed the cu rrent project portfolio of each CLT. While Sungu-Ermilmaz and Greenstein s (2007) study does not directly answer the six questions posed by the Lincoln Institute as a result of the roundtable discussion, their study does serve as a source of comparison for assessing other CLTs. The HSCLT will be assessed by asking relevant questions, amended as necessary, based on those posed in the Lincoln Institute studys survey. The findings will be presented in a similar format as the Lincoln Institute study. The survey results of the Lincoln Institute study will be used to assess the implications this studys findings regarding the HSCLT. The first part of the case st udy presents a broad descripti on of the HSCLT, followed by a more detailed review based on th e Lincoln Institute survey of C LTs. The broad description of the HSCLT will be accomplished by comparing it to the classic CLT model, with any variances from that model being explained. The cla ssic CLT model was cr eated based on the 1992 amendments to the National Affordable Hous ing Act of 1990 by the National CLT Network. In 2006, the National CLT Network formally adopted th e definition of the classic CLT model at its first annual meeting, estab lishing nine characteristics (see Table 3-1 ) (National CLT Network, 2006a). HSCLTs by-laws and ground lease, and an interview with the organizations director will provide information to compare this organiza tions characteristics with the nine associated with the classic CLT model. 53
The HSCLT will be similarly evaluated based on the characteristics of the CLT as outlined in the Lincoln Institute study. Table 3-2 lists the specific questions associated with the characteristics used and the data source for this information relative to the HSCLT. The CLTs surveyed in the Lincoln Institute study re sponded to 75 questions on their organizations characteristics. The review and description in this study is limited to questions relevant to characteristics associated with the HSCLT. Fo r instance, the HSCLT does not provide rental housing, therefore the questions about rental housing characteristics will be omitted. Part 2: Theoretical Evaluation of HSCLTs Use of Smart Growth Principles The final component of the HSCLT case st udy involves relating th e activities of the organization to Smart Growth. Tasha Harmon (20 03) explores the opportun ities and challenges posed to advocates of CLTs and Smart Growth who work to integrate the concepts. She evaluates the necessity of the concepts to work together and describes the potential links between the two. She finds several common connections a nd discusses the implications of a combined effort on creating equitable development that incorporates affordable housing. When the HSCLT was established, Winter Pa rk was undergoing revitalization and facing the problems of gentrification. An integrated approach of creating a CLT while using Smart Growth principles has the potential to result in a revitalized community without displacement of residents, particularly lower income residents. Incorporating Smart Growth principles to guide and manage the organization can potentially result in several beneficial outcomes. Part 2 of the HSCLT analysis is an evaluati on of HSCLT regarding the extent to which its creation resulted in Smart Growth for the Hannibal Square neighborhood. The scope of the analysis is limited to the Sm art Growth principles determined by Harmon (2003) to have the strongest link to CLTs. The literature review in cluded a detailed description of the principles used in the analysis. The specific analysis of HSCLT is presented in Table 3-3 The information 54
used for the analysis includes responses from th e interviews for all principles listed in the evaluation criteria. Additional data sources are incorporated where appropriate and are also listed in Table 3-3 Synthesization Evaluating HSCLT from this dual perspective w ill serve several objectives, but with some caveats. The first part of the case study estab lishes a framework to describe the HSCLT model by relating it to the Lincoln Inst itute study. The second part of the case study presents a critical analysis of the HSCLT in achieving Smart Gr owth principles. Havi ng a single case study restricts the generalizability of the analysis results. Yet, by combining the descriptive and theoretical components of analysis, the result s of the single case study can have broader applicability. To the extent that HSCLT resemb les the classic CLT model, the findings on Smart Growth will apply to the general concept of the CLT. Lastly, the evaluation adds to the body of knowledge of CLTs, as solicited by the Li ncoln Institute. Notably, this is where a limitation of the research exists. The call for research was intended to be answered by professional analysts and academics, and the ICE. The resources, funding, and workforce available to these researchers are considerable. Gi ven that these resources were not available for this case study, its scope is much more modest. 55
Table 3-1 Classic CLT Model Charac teristics Used for HSCLT Analysis List of Characteristics of Classic CLT Model from the National CLT Network (1) Purpose A CLT has among its purposes th e provision of decent housing that is affordable to persons of low-income or moderate-income, with a primary purpose of meeting the needs of char itable populations, as defined by the IRS. (2) Corporate Status A CLT is a private, nonprofit corpora tion that: (i) has a 501(c)(3) or (4) tax exemption; (ii) is not sponsored by a for-profit organization; and (iii) reserves no more than a third of its board for appointees or employees of a local government. (3) Land Ownership A CLT acquires parcels of land that ar e then: (i) owned in perpetuity by the CLT; and (ii) conveyed under long-term ground leases. (4) Home Ownership For owner-occupied housing, a CLT tran sfers ownership of structural improvements that are located on le ased parcels of land to homeowner/lessees. (5) Permanent Affordability A CLT retains a preemptive opti on to purchase any structural improvements at a price deter-mined by a formula that is designed to ensure such improvements remain afford able in perpetuity for persons of low-income or moderate-income. (6) Service Area A CLT serves any particular geograph ic area specified in the bylaws of the organization. (7) Corporate Membership A CLT has a corporate membership that is open to any adult resident of its service area and to any other class of members defined in the organizations bylaws. (8) Board Composition A CLTs board of directors is compos ed of equal number s of: (i) lessees; (ii) corporate members who are not lessees; and (iii) any other category of persons described in the bylaws of the organization. (9) Board Selection A majority of the directors on a CLTs governing board are elected by the corporate membership. Source: National CLT Network, 2006a, n.p. 56
57 Table 3-2 Questions Asked about the Charact eristics of the HSCLT Based on the Lincoln Institute Study, Listing the Data Sour ces Used to Answer Each Question Characteristics of CLT from survey in Lincoln Institute study Data source Date of Incorporation By-laws Type of Organization By-laws Factors for formationA Interview Role of local government Interview Tax exempt status By-laws Legal form By-laws Number of seats on governing board By-laws Number of seats filled vs. open Interview Composition of governing board By-laws Does CLT have membership/number of members By-laws Composition of membership By-laws Number of voting members By-laws Issues that can be voted on Interview Number of full time and part time paid employees Interview Number of volunteers Interview Length of employment of CLT director Interview Length of employment at CLT pr ior to directorship Interview What are the CLTs residentialB activities? Interview When did work start on the resi dential activities? Interview Does the CLT plan to start work on residential activities this year? Interview What role does the CLT play in residential activities? Interview What non-residentialC activities does the CLT do? Interview Does the CLT plan to start work on non-residential activities this year? Interview Type of area served By-laws Type of community served by CLT Interview Does the CLT own land and when was it acquired? Interview Who pays property taxes on the land? By-laws Number of parcels owned by the CLT Interview Number of acres owned by the CLT Interview Number of residential buildi ngs on the land Interview Type of residential build ings on the land Interview Are there any mixed-us e buildings? Interview Number of dwelling units new and rehabilitation Interview Number of dwelling units were added last year Interview A Factors include donations and financial support from public and private sectors, actions by local officials, individuals, community groups, and businesses, actions by non-local organizations, grassroots efforts, rising real estate prices, or other miscellaneous people or events. B Residential activities include creation of affordable hou sing, residential property management, preventative or reparative home maintenance, or homeowner education. C Non-residential activities include commercial, industrial, office, agricultural, or green development.
Number of homeownership units Interview Characteristics of CLT from surv ey in Lincoln Institute study continued Data source continued Number of homeownership units that are occupied Interview Number of homeownership units that are vacant Interview Target service populations By-laws Any rental units on CLT land? Interview Number and duration of ground leases for each building occupier type Interview Is the ground lease based on the ICE model ground lease? Interview Does the CLT have a resale formula in place? Ground Lease Type of resale formula Ground Lease Does the resale formula permit capital improvement credit?DGround Lease Does the CLT retain option to buy? Ground Lease Has the CLT ever had any resales? Interview Does the CLT charge fees to sell home? Ground Lease Do resales ever occur directly from seller to buyer? Ground Lease Does the CLT administer the resales? By-laws Number of homes that are in foreclosure stage Interview Does the CLT have stewardship over any non-CLT owned land? Interview Type of non-residential activity th at is not on CLT owned land but administered by the CLT Interview Source: Sungu-Eryilmaz and Greenstein, 2007, pp. 39-59. D A capital improvement credit gives the homeowner financial credit for any significant improvements made to the home or property located on CLT land 58
Table 3-3 Evaluation Criteri a for HSCLTs Inclusion of Smart Growth Principles Evaluation Criteria of C LT Link to Smart Growth Principle as Defined by Smart Growth NetworkEData Source in Addition to Interviews Does the CLT create multi-unit developments? Housing opportunity, compact building design and multi-modal transportation options By-laws Does the CLT aid buyers in purchasing non-CLT created homes? Investment into established communities By-laws Are CLT homes perpetually affordable? Housing opportunity Housing Data Is CLT development spatially clustered? Development of community identity Site Analysis Does the CLT include provisions for preserving open space and parks? Preservation of natural areas By-laws, Site Analysis Does the CLT contribute to economic development through community revitalization and mixed-use development? Mixed-use development Comprehensive Plan Source: Harmon, 2003, pp. 43-45. E Three principles of Smart Growth are not explicitly inco rporated by the evaluation criteria designed in Harmons article. The three principles will be included in the discussion but not included in the defined evaluation criteria. 59
CHAPTER 4 CASE STUDY FINDINGS The city of Winter Park and its Hannib al Square neighborhood are evaluated on the suitability and effectiveness of the CLT model a nd application of Smart Growth principles to address the challenge of providing affordable housing. This chapter be gins with a brief historical account of the development of Wint er Park and a discussion of the decision to select the city and its CLT for the case study focus. 1 Next, the design of the HSCLT is analyzed by comparing it to the classic CLT model and relating it to the Lincoln Institute study of CLTs from across the nation. The second part of the analysis will show the extent of Smart Growth principles currently employed by the HSCLT and the capability of the organization to further incorporate said principl es. A discussion of the findings for each part of analysis is provided to explore the implications of the HSCLT results to the characteristics identified by studies presented in the methodology chapter. History of Winter Park and Hannibal Square Neighborhood Winter Park is located in central Florida, just north of the city of Orlando (see Figure 41). In 1858, one of the firs t white settlers, David Mi zell, arrived in the area (MacDowell, 1950). Prior to that time the re gion was occupied by Seminole Indians, who remained in the area until late r in the century but were even tually pushed out (Powers, n.d.). Winter Park organized as a town in 1881 wh en two businessmen purchased 600 acres of land with the intent of development (Winter Park Hist orical Association, n.d.). 1 Some sources of information for the history of Winter Park come from literature on oral histories and brochures. Therefore, the precise accuracy of the information is qualified as the sources were published for purposes other than analytic research. However, the inform ation presented represents findings across multiple sources from several time periods. 60
61 Winter Park flourished as a seasonal retr eat. Marketing the area to wealthy white Northeasterners, land speculators and hotel owne rs promoted the pleasant climate and estate style homes to increase population. Rollins Colle ge was founded in 1885 as a private school of higher education. Early developers paid $758 to the South Florida Railroad company to construct a station in the town in recognition of the need for transportation access for settlers and visitors (Campen, 1987). The town developed a reputation fo r impressive homes, hotels, and golf courses in a college town setting (P owers, n.d.). In 1888, Presiden t Grover Cleveland visited the Seminole Hotel to personally experience Winter Parks setting (Campen, 1987). One local land owner began selling his property of Virginia Manor Estates in response to market demand with 15-acre home sites (Powers, n.d.). The establishment and devel opment of Winter Park o ccurred during the era of segregation. In order to support the booming service i ndustry that enabled the growth of the town, Winter Park designated an area for th e African-American workers to live and worship (Ross, 2007). Hannibal Square became a sepa rate space for African-Americans, and by 1885, only African-Americans were permitted to live in the west side neighborhood. The neighborhood was named in honor of ancient Carthaginia n, Gen. Hannibal (Winter Park Historical Association, n.d.). Eight years late r, Winter Park expelled Hannibal Square from the town limits (Cooley, 1979). An act adopted by th e Florida Legislature officially recognized Winter Park as a city in 1925 (Florida Legislature, 1925). At that time, Hannibal Square was annexed back into city limits (Cooley, 1979). Main thoroughfares of the city were named after the prominent developers and businessmen who developed the city. Park Avenue became the central point for businesses and has evolved as the main street of downtown Winter Park. Commercial and
62 industrial development streng thened after the Great Depression, and population growth continued throughout the 1900s (Winter Pa rk Historical Association, n.d.). The west side of Winter Park encountere d increasingly pervasive challenges in the second half of the 20th century. Hannibal Square became an area of disinvestment, neglect and deteriorating social conditions (Ross, 2007). Safety became a concern as the pervasiveness of crack-cocaine increased.2 Homeownership rates decreased a nd renting became a common form of housing tenure (Ross, 2007). In spite of the negative socio-economic conditions, the city of Winter Park and the citizens of the west side wanted to preserve the rich cultural heritage of the area (Ross, 2007). A community revitalization effort started in the early 1990s in accordance with the creation of Winter Parks CRA.3 The vision of the CRA is To preserve, unify and enhance a growing community (City of Winter Park Community Redevelopment Agency, 2007). The CRA set forth on a collaborative effort to deve lop a True City, according to Winter Parks Community and Economic Development Director Jeff Briggs. The goal for Winter Parks redevelopment was to create a community in which the infrastructure, amenities, culture, economic opportunity, and socio-demographic mix of residents worked together to enhance the quality of life for all residents.4 The Hannibal Square neighbor hood is located within Winter Parks CRA (see Figure 4-2). Background on the HSCLT and Its Relevance to this Study The success of the Winter Park revitalization effort resulted in attr acting the interest of more affluent persons. New businesses opened in the Commercial Business District (CBD), 2 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 3 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 4 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007.
63 home and land prices appreciated to nearly double their orig inal value, and the average household income rose from $26,001 in 1990 to $50,957 in 2000 (City of Winter Park Community Redevelopment Agency, 2007). However, several changes negatively impacted the lower and moderate income populations. The appreciation of homes and land resulted in higher property taxes making it difficult for some homeowners to pay their monthly bills. Co mmercial development started to infiltrate into residential areas, eliminating some of the affo rdable housing stock as building owners cleared aesthetically unpleasan t lots to improve their marketability.5 Some homeowners were preyed on by unscrupulous developers who offered them below market prices knowing the homeowners were unaware of their properties value. Fr om 1990 to 2000, the population of Winter Parks CRA (where the bulk of affordable homes are located along the west side) decreased from 3,391residents to 2,881 (City of Winter Park Community Redevelopment Agency, 2007). Affordability of homes located within the Winter Park CRA decreased as well, especially for households earning the lowest annual income rates of less than $15,000 (see Figure 4-3). Projections indicate that the affordable housing stock will continue to decrease through 2010. The city of Winter Park reacted to the changing socio-economic conditions by instituting a variety of affordable housing development strategi es. A partnership was formed with Habitat for Humanity to build housing for the very lo w income population. The city itself produced affordable units by redeveloping a dilapidated apartment building. According to Jeff Briggs, director of the Winter Park Community and Economic Development Department, the major flaw revealed itself when the homeowner decided to sell their unit on the market. The significant appreciation levels made selling the affordable unit very profitable for the 5 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007.
64 homeowner, but the transaction resu lted in a market priced unit. The loss of the affordable unit was detrimental to the citizens in need of affo rdable housing and to the city which had used subsidies to make the unit affordable. The HSCL T offered a solution to market forces reducing the affordable housing stock. The City of Winter Park created the HSC LT intending the organization to become an autonomous partner with the City to create affordable housing.6 Currently the HSCLT receives significant support from the City in terms of funding, land dona tion, and programmatic guidance. In order for public support to continue, the HSCLT entered into an agreement with the City in late 2007 that stipulated the HS CLT would author and adopt a fi ve-year business plan by April of 2008.7 The purpose of the five-year plan includes establishing procedures for the HSCLT to market its products, manage its finances, and pr oject its future development (Hannibal Square Community Land Trust, 2007). Understanding the history of Winter Park, the story of its citizens in the west side neighborhood of Hannibal Square, and the motiva tion behind using the CLT model makes the HSCLT an ideal subject for the case study designed to describe the CLT model and explore the relationship of CLTs to Smart Growth. The rest of this chapter includes analysis of the HSCLT as described by the methodology. Pa rt 1 describes the characteristics of the HSCLT. Part 2 evaluates the incorporation of Smart Growth principles by the HSCLT. Part 1: Results of Descript ive Evaluation of the HSCLT The first part of the case study analysis begins with a comparison of the HSCLTs organizational structure with the classic C LT model as established by the National CLT 6 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 7 Winter Park Community Redevelopment Agency meeting, September 27, 2007.
65 Networks standards. The HSCLT met all nine ch aracteristics of the cl assic CLT model. The following review describes the specific manner in which the HSCLT met each characteristic. Table 4-1 at the conclusion of this chapter provides the definition of the classic CLT characteristics and the exact language used in the HSCLTs by-laws for purposes of reference and replicability. Most of the information was found in the by-laws of the organization. In some instances the language of the by-laws was not aptly wo rded for comparison to the classic CLT characteristics. Documents such as the Artic les of Incorporation and the ground lease were reviewed to supplement the findings as well as to confirm (or re fute) the information provided by the by-laws. The results are reported based on info rmation stated in the by-laws unless specified differently. The purpose of the classic CLT ensures th e housing created by the organization is decent and affordable to low and moderate income individuals. Additionally, those helped by the CLT must be deemed charitable populations according to the IRS. The HSCLT lists decent and affordable housing as a primary objective. One of the organizations goa ls is to serve very low income individuals in addition to those w ith low and moderate incomes. The HSCLT does not explicitly define their benefici aries as a charitable group, however. The corporate status of classic CLTs is a private, non-profit organization with three specific characteristics. First, it must receive tax exemption as a Section 501(c)(3) or (4) organization. HSCLT is incorporated as a 501(c)(3) organization. Second, the classic CLT cannot be sponsored by a for-profit entity. Th e by-laws of the HSCLT do not specify sponsorship. The Articles of Incorporation descri bes the HSCLT in Article IV as a publicly supported organization. Furthermore, the 2005 Income Tax records show HSCLT received no
66 private funding for FY2005. Third, a classic CLTs Board of Dire ctors cannot have more than one-third of their members be government employ ees or be appointed by local officials. The only possibility for a greater than one-third representation of government employees occurs if a government employee also leases property fr om the HSCLT and is elected by the lessee membership to fill a Board of Directors position as a lessee, rather than as a public member. The HSCLT requires an election by the voting memb ership for all board members and Board of Directors positions, thus it is not possible for offi cials to appoint members to more than one-third of the Board. Land ownership by classic CLTs must be held permanently by the organization and conveyed under long-term ground leases (N ational CLT Network, 2006b). The HSCLT ensures perpetual land owne rship by disallowing the sale of its land unless it is a last resort to maintain the organizations functionality. Th e language of the HSCLTs by-laws implies compliance with the requirement of conveying land rights using long-term ground leases. Land may be leased from the organization. Ground leas es are used by the orga nization to transfer ownership rights of the land improvements to less ees. Yet, the HSCLT does not provide further, detailed information on the transf er process within its by-laws. In terms of home ownership, a classic CLT provides a lessee ownership of the improvements on its land. The HSCLT allows for lessees to own land improvements. However, the HSCLT also specifies that selling the impr ovements to the lessee is not the only mechanism permissible for the organization to promote ow nership of improvements. The HSCLT by-laws leave an opening for the organization to develop different options to convey said ownership. Permanent affordability for low and moderate income individuals is maintained by the classic CLT through a repurchasin g option, using a predetermined price formula. The HSCLT
67 includes a provision for buying th e land improvements from a lesse e. The price the HSCLT pays for the land improvements is based on a resale formula designed to retain affordability for very low, low and moderate income individuals. The HSCLT ground lease details the resale formula used by the organization. The resale formula pe rmits the homeowner a maximum of 25% equity appreciation based on the increase in value determined by a property appraisal (Hannibal Square Community Land Trust, 2006b). Allowing for some equity return to the homeowner at the time of sale increases the cost of the home for the next buyer, but prevents the home from becoming market rate. The service area of a classi c CLT should be geographica lly defined. The HSCLT bylaws include a list of five objectives that ar e all specific to the Winter Park Community Redevelopment Area (CRA). The Articles of Incor poration describe the physical location of the Winter Park CRA in Article XIV and in clude a map and legal description (see Figure 4-2). Any resident, or otherwise de fined individual, may hold corporate membership in the classic CLT. The HSCLT uses the term voting membership and defines two types of individuals permitted to such membership: Les see Members or General Members. HSCLT residents are called Lessee Members. Other individuals are General Members, and must be legal adults who live or work within the boundari es of the Winter Park CRA. The HSCLT also permits two other forms of membership, suppor ting and youth, for individuals who do not meet the qualifications of the voting membership. The board composition of the classic CLT s hould consist of equal numbers of lessees, non-lessee corporate members, and any third category of individuals. For the HSCLT, the Board of Directors consists of nine members represen ting three categories. The three categories of Directors are lessees, general members, and members of the general public. The last category of
68 general public is not explicitly defined. The two additional forms of supporting and youth membership permitted by the HSCLT do not have direct representation on the Board of Directors. Board selection for the classic CLT should be predominantly elected by the corporate membership. The entire Board of Directors of the HSCLT is elected by the voting membership. The only exception to this requirement was the el ection of the Board of Directors at the first annual meeting, prior to the formation of the voting membership. The two additional forms of supporting and youth membership do not have vo ting rights to elect th e Board of Directors The Implications of Meeting the Classic CLT Definition Overall, the HSCLT meets the definition of the classic CLT. In some cases, the HSCLT could use more specific language in its by-laws to determine whether it meets these standards. A compelling reason for the HSCLT to amend its bylaws to more closely match the classic CLT definition exists. As the CLT model gains recognition among memb ers of the financial industry, government, and community groups, the HSCLT ma y benefit from an identity that more precisely matches the classic CLT. Fundi ng opportunities, acceptance under government regulations, and advocacy support may all result from an undis putable classic identity. The Specific Characteri stics of the HSCLT A review of the components of the HSCLT fo llowing the format of the Lincoln Institute study provides a more detailed descriptive examin ation of the HSCLT. Th e results are presented in four subsections; formation, st ructure, objective, and portfoli o. Each subsection is divided in terms of the type of information presented. The analysis shows that HSCLT has followed several trends at the national level as outlined in the Lincoln Institute study.
69 Formation: The When, Why, and How of the HSCLTs Creation The HSCLT was officially incorporated as a non-profit organizati on in November of 2004 (Hannibal Square Community La nd Trust, 2004). The City of Winter Parks and the Winter Park CRA played a significant ro le in the start-up of the orga nization, providing land donations and financial support in addition to or ganizational and programmatic guidance.8 There were also several champions of the HSCLT, without whose help the or ganization would have suffered.9 The most significant individuals in the foundi ng of the HSCLT include Ric Lopez, Alberto Vargas, Barbara DeVane, and Mary Daniels, a ll members or advocates of the Winter Park community. The private sector did not provide any major cont ributions in terms of funding, conveyance of land, or involvement in the form ation process. Other co mmunity organizations were not involved either. The HSCLT did receiv e assistance from a Rollins College intern who worked on the organizations in itial business plan. Beyond the local community resources, a consultant was hired from the Bahama Conch CLT in Key West, Fl orida to aid in the design of the ground lease and by-laws.10 Finally, there were two issues th at factored into the creation of the HSCLT. Escalating housing pric es in the area were a major impetus for its formation. Also, residents of the community voiced their concerns over the availability of affordable housing in the city, although this advocacy did no t represent an organized effort.11 Structure: How the HSCLT is Set Up to Function The HSCLT operates under the direction of an Executive Director, Board of Directors (the Board), voting membership, and non-voti ng membership (Hannibal Square Community 8 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 9 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 10 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 11 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007.
70 Land Trust, 2005). The Executive Director is the only paid, full-time employee of the organization, and manages the overall operati on of the HSCLT. Thus far, the HSCLT has employed a single Executive Director who has wo rked with the organization throughout its entire existence of nearly three years. The Board consists of nine volunteers who represent the three forms of the voting membership. The compositi on of the Board is evenly split, with three directors representing each the Lessee Members, General Members, and Public Interest (Hannibal Square Community Land Trust, 2005). Currently, the Board is filled and evenly divide d as stipulated in the by-laws. The lessee directors are low-income community repres entatives who were nominated by the lessee membership and are all HSCLT homeowners (H annibal Square Community Land Trust, n.d.). The general directors are similarly nominated by the general membership. The public directors are nominated by the Winter Park City Commission. All of the directors ar e elected by the voting membership. A minimum representa tion of one-third of the Board must include individuals who are residents of very low and low-income neighborhoods, other very low and low-income community residents, or elected representa tives of low-income neighborhood organizations (Hannibal Square Community Land Trust, 2005, Section 4.10). Members of the Board have a variety of experiences on technical and community-ori ented issues. The expertise of the Board includes practical knowledge of accounting business and law, as well as advocacy of citizens rights and interests (Hannibal S quare Community Land Trust, n.d.). The voting membership is empowered by the organizations by-laws to participate in several components of the HSCLTs operations. The general membership is defined as any adult that has applied for membership, participated in HSCLT events including meetings, and that [r]eside[s] or work[s] within the Winter Park Community Redevelopment Area (Hannibal
71 Square Community Land Trust, 2005, Section 3.1.b. iii). The public membersh ip is composed of individuals that represent the general interest of the public and may be employed by the local government, however they are not considered part of the voting membership. The two types of voting members each have equal representation on the Board and nominate and elect Directors to serve their interests on the Board. Additionally, they are entitled to a single vote to decide on a variety of issues including fees assessed for membership, approval of land sales, any action regarding the resale formula, any changes to the governing documents of the organization, and dissolution of the HSCLT, and are entitled to serve on the Board or subcommittees (Hannibal Square Community Land Trust, 2005, Section 3.3). Additional opportunities for individuals to become i nvolved with the HSCLT include supporting and youth membership, and particip ation on the advisory board. Supporting and youth members include individuals who have donated funding to the organization but do not choose to join or qualify as voting member s (Hannibal Square Community Land Trust, 2005, Section 3.4 and 3.5). The advisory board for the HSCLT does not have specified duties in the organizations by-laws aside fr om fulfilling needs as deemed necessary by the Board of Directors. Currently, eight volunteers for the HS CLT sit on the organizations advisory board. Advisory board members come from a range of backgrounds, including employees of construction and real estate development compan ies and educators (Hanni bal Square Community Land Trust, n.d.). Objective: Description of Residential and Non-Residential Ac tivities and Goals The primary objective of the HSCLT conti nues to be affordable, residential unit development. Marketing of the HSCLTs affordable homes began in 2004, immediately after incorporation. The development process began in 2005. Thus far, the HSCLT has functioned as the co-developer of the residentia l units, working in partnership with the Winter Park CRA and
72 certain home builders. The HSCLT hopes to vary its role in development, depending on the situation. The organization wants to expand its influence by serving as a sole developer or reduce its involvement by only being in charge of land assembly.12 The HSCLT has also engaged in counseling of potential homeowners on the pur chasing process. The organization has not participated in property management or home modification. Through the conclusion of 2007, HSCLT anticipates continuing residential deve lopment but not expanding the scope of its activities.13 The HSCLT does not participate in non-reside ntial development. Future actions of the organization may extend to aiding small busin ess start-ups or the creation of community greenspaces.14 It is highly unlikely the HSCLT will suppor t agriculture uses at any time as there is insufficient space for such activity. Non-housing activities orchestrated by th e HSCLT include the organization of a neighborhood watch program and some educational activities. Resident education on financial management and home maintenance are popular programs administered by the HSCLT.15 Community education has proven to be a beneficial activity of the HSCLT.16 Portfolio: Current and Projected Real Estate Holdings Land ownership is an important component of the HSCLTs opera tions. Currently, the HSCLT owns ten parcels of land, upon which ten si ngle family, detached homes exist. The ten homes are all currently occupied by homeowners (Orange County Property Appraiser, 2006). By 12 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 13 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 14 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 15 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 16 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007.
73 the conclusion of 2007, an additiona l four single family, detached homes will be constructed on two parcels of land. The ten existing and four planned units are al l owned by residents. Historically, land has been conveyed to the HSCLT from the City of Winter Park for development.17 The HSCLT has not constructed any mixed-use or multi-unit developments. Also, the HSCLT does not manage any hous ing for which it does not own the land. As the HSCLT is a tax exempt organization, property taxes are not assessed. Taxes are assessed on the appraised valu e of the land improvements, and paid directly by the homeowners.18 Since all residents at this time ar e homeowners, the HSCLT residents are permitted to employ the Homestead Exemption to reduce the taxable value of their homes. HSCLT residences are restricted to buyers that qualify based on income. The populations served by the HSCLT include very low-income (50% AMI), low-income (50-80% AMI) and moderate-income (80-120% AMI). The HSCLT bases its calculation of AMI on the Orange County Housing and Community Development Division (Hannibal Square Community Land Trust, 2004). The first HSCLT development consists of ten single family detached homes located in a single neighborhood (see Figure 4-4). The homes range in size from 1,158 to 1,364 square feet (Orange County Property Appraiser, 2006). All residences were sold for $126,000 (Hannibal Square Community Land Trust, 2006a). The appraised building values ranged from $112,653 to $132,240, and each land parcel was valued at $60,000 (Orange County Property Appraiser, 2006). The combined cost of the land and each resi dence compared to the sales price shows each HSCLT buyer saved from $46,653 to $72,240. 17 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007. 18 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007.
74 Lessees of HSCLT residences are required to comply with a ground lease (Hannibal Square Community Land Trust, 2006b). The ground lease is based on the national model created by the ICE, but adapted to meet the specific needs of the HSCLT.19 Included in the ground lease is a resale formula that determines the calculati on of the price if a resident chooses to sell his or her unit. As mentioned early, the HSCLT uses an apprai sal-based formula that caps appreciation at 25% (Hanniba l Square Community Land Trust, 2006b). The HSCLT reserves the right of first refusal if a reside nt plans to terminate ownership. The resale formula price applies equally to the HSCLT if it were to repurchase the home or to a ny potential market buyers. As of September 2007, HSCLT has not had any resale s (Orange County Property Appraiser, 2006). Furthermore, no homeowner has undergone foreclosure.20 Relating the HSCLT to th e Lincoln Institute Study Table 4-2 presents an overview of the key findings of the HSCLT and the comparison of the organization to the findings of the Lincoln Institute study. As is the case for many CLTs across the nation, the HSCLT is a new organizati on. Forty-four percent of respondents to the Lincoln Institute study were formed since th e turn of the new millennia (Sungu-Eryilmaz and Greenstein, 2007). The HSCLT is a corporation rather than a pr ogram under a larger non-profit organization. The motivations behind the creatio n of the HSCLT reflect national trends. Over time, the explanation for employing the CLT model shifted from a reaction to community activism and support from the private sector to a reaction to housing affordability issues and support from the public sector (Sun gu-Eryilmaz and Greenstein, 2007). 19 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 20 Winter Park Community Redevelopment Agency meeting, September 27, 2007.
75 The leadership of the HSCLT is relatively sma ll, but similar in size to the majority of CLTs across the country. The median size of CLT pa id staff is one for corporations and three for programs.21 Approximately one-third of the Executive Directors have served in that position since the foundation of the CLT, with the average length of tim e of six years (Sungu-Eryilmaz and Greenstein, 2007). The HSCLT Board is slightly smaller than the median across the nation, with the median number of board member s at 15 (Sungu-Eryilmaz and Greenstein, 2007). Although the classic CLT model is based on a tripartite board, only 29% of the respondents to the Lincoln Institute study used that format. The low numbers of CLTs using the three-part board structure may be symptomatic of the fact th at they generally have only two forms of membership, lessees and all other members of the community (Sungu-Eryilmaz and Greenstein, 2007). The HSCLT has three membership groups, de lineating between the pub lic interest and the general members of the community. Most members of CLTs have voting rights. The matter most members are entitled to decide on is the election of the Board, while it is least common for members to vote an alteration to the resale formula (Sungu-Eryilmaz and Greenstein, 2007). The HSCLT is somewhat unique in that its voting members can decide on all six of the most common matters. Nearly every CLT responding to the survey in the Lincoln Institute study benefited from the help of one to 200 volunteers (SunguEryilmaz and Greenstein, 2007). The HSCLTs volunteer base consists of the Board of Director s (as none are paid employ ees of the organization aside from the Executive Director) and the ei ght advisory board members. As the HSCLT increases its number of pr ojects, it may need to r ecruit additiona l volunteers. 21 Sungu-Eryilmaz and Greenstein (2007) differentiate CLT corporations from CLT programs in some of their discussion on the survey findings. A CLT corporation is an independent community development organization while a CLT program is a programmat ic activity of a non-profit community development organization that typically has adopted selected elements of the CLT model into its operations (p. 10).
76 As a young organization, the HSCLT has followed the pattern of activity that most new CLTs do. The Lincoln Institute study shows th e top two objectives of CLTs are creating affordable housing (88% of CLTs) and providing counseling on homeowners hip (81% of CLTs). Development of affordable housing is the primar y activity of CLTs; it is accomplished in an increasingly shorter amount of time with land acquisition occu rring during the first year of existence for CLTs formed after 2000 (S ungu-Eryilmaz and Greenstein, 2007). Across the nation, the average amount of time for starting non-resi dential activities is also less than one year (Sungu-Eryilmaz and Greenstein, 2007). However, CLTs do not typically engage in nonresidential activities, with only 25% of respondents to the Lincoln Institute survey claiming that they did. If the HSCLT chooses to begin non-re sidential development, the organization may benefit from following the example of other new CLTs with non-residential development portfolios. The HSCLTs portfolio is similar to those across the nation in terms of size but not diversity. The Lincoln Institute study shows the median number of parcels owned by CLTs is 15, which the HSCLT will near by the end of 2007. Th e HSCLT does not have as many units on its land as the national median of 25 (Sungu-Eryilmaz and Greenstein, 2007). N early all CLTs have residential dwellings on their land, yet only 55% of those dwellings constructed by CLT corporations are single family detached un its (Sungu-Eryilmaz and Gr eentein, 2007). Also, a large proportion of CLTs do rehabilitation, which the HSCLT currently does not. The legal design of the HSCLTs lease is parallel to that fo und in the Lincoln Institute study. Roughly three out of every four CLTs use a ground lease to manage their lease arrangements (Sungu-Eryilmaz and Greenstein, 2007) Common provisions of CLTs are resale formulas and the right of first refusal to purchase a lessees home. Such legalities have been
77 necessary for many CLTs, as 60% have had resale s occur and 26% have had residents enter the foreclosure process (Sungu-Eryi lmaz and Greenstein, 2007). Finally, the HSCLT serves a wider income range of residents than most CLTs. Nationally, the largest income group served is low, followed by very low, then much less commonly moderate income populations (S ungu-Eryilmaz and Greenstein, 2007). Only a marginal number of CLTs serve above moderate income populations. Part 2: Results of Theoretical Evaluation of HSCLTs Use of Smart Growth Principles This second part of analysis evaluates th e HSCLT by examining the extent to which Smart Growth is currently used to guide HSCLT. The findings begin by discussing the results of the interviews with three key officials related to the HSCLT. The interview results provide a measure of the current use of Smar t Growth principles as well as the likelihood of or interest in further implementing the principles in future acti vities. The examination of the relevant elements of the Winter Park comprehensive plan indicate s the ability of the HSCLT to use Smart Growth principles given the local governments requirements. Current Incorporation of Smart Growth Principles by the HSCLT Interviews with three key officials include d discussion on the extent and potential for further incorporation of Smart Growth principles into the operations of the HSCLT. The responses of the interviewees revealed that each of the six questions developed from Harmons (2003) study as presented in the methodology had been factored into decisions made by the organization. Some of the Smart Growth principl es had been incorporated into HSCLT actions. The principles that were not ye t integrated are currently under consideration for implementation in the future. The interviewees brought to light several important factors that would influence the HSCLTs decision to proceed with Smart Growth principles in prospective developments.
78 Multi-unit developments, although currently not utilized by the HSCLT, are of interest to the organization. In the initial 5-year plan developed for the HS CLT, a duplex development was proposed.22 However, the project was not adopted by the CRA Board, and the HSCLT instead proceeded with single family homes for its fi rst development. More recently, the Comstock development to be completed by HSCLT had been proposed as a multi-unit complex. The HSCLT decided against the multi-unit idea due to the need for expediency and lack of construction and management experience. The approval process for obtaining code variances would have increased the project timeline. Th e HSCLT plans to continue to evaluate the potential for multi-unit development for future projects. When asked if the HSCLT assists indi viduals in purchasing non-CLT homes, the Executive Director responded that the organizati on currently does not, but it may in the future.23 Assisting with non-CLT home purchases supports one of the organizations goals to increase the number of residences under its control, as the HSCLT is in the market to purchase homes.24 Therefore, assisting individuals with the purchase of non-CLT creat ed homes is in line with the direction of the HSCLT. As th e knowledge base of the HSCLT ad ministration grows, so will the opportunity to expand into the real estate market. The HSCLT was created, in part, as a reacti on to a flaw in the operations of other affordable housing programs.25 The City of Winter Park rea lized that the subsidies applied toward the development of affordable residences were lost when owners were able to sell their homes at market rates. Thus, the HSCLT was creat ed with the explicit intention of perpetuating 22 Winter Park Community Redevelopment Agency meeting, September 27, 2007. 23 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 24 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007. 25 Personal Interview with Direct or Jeff Briggs and Director Sherry Gutch, September 25, 2007.
79 affordability. This goal is accomplished thr ough the ground lease by a formula that caps appreciation. The choice of development location of HSCLT homes has been dictated by available land up to this point in time. Due to its partnershi p with the city, the HSCLT is contained by the geographic limitations of the CRA and the land owne d by the city within that area. Therefore, the locations of development have been determined by availability of land and the projects scope. While the result has been clustered development, the HSCLT may choose to expand in the future into areas without several parcels of land obtaina ble for development. One goal of the HSCLT is inclusive housing, so the benefits of cluster development have the possibility of occurring regardless of the origination of the surrounding homes. Also, the HSCLT wants to prevent association of its structur es with affordable housing so that they may blend in with the existing community. Seamlessness may require a combination of clustered and individual-lot development. Preservation of open space and parks is not a high priority goal of the HSCLT, yet it is a result of its development practic es. Natural areas within Winter Park are prevalent, and the HSCLT follows the development patterns and restri ctions set forth by the city. Management of the HSCLT has yet to determine the future ro le open space and parks will play in the organizations activities. Economic development is achieved by th e HSCLT currently through community revitalization and mixed-income residentia l development resulting in stabilizing the community.26 As the HSCLT is a component of affordable housing development under the direction of the CRA plan, HSCLT contributes to the citys revita lization by providing affordable 26 Personal Interview with Executive Director Bedilia Campbell, October 2, 2007.
80 housing options to the citys residents. Future activities of the HSCLT may include mixed-use development and development of businesses as deemed viable by the organization. Assessment of the Potential for Integrating Sm art Growth into the HSCLT: Winter Parks Housing Element and Future Land Use Element The comprehensive or growth management plan includes multiple elements, but the two of direct influence on the HSCLT are the Futu re Land Use Element (FLUE) and the Housing Element (HE). A review of the goals, objectives, and policies (GOPs) within the elements shows that Winter Park has incorporated several, but no t all, of the Smart Growth principles listed in Table Since the land use activities of the HSCLT must comply with the requirements of the comprehensive plan, the organization has implemen ted Smart Growth principles to the extent enabled by the comprehensive plan. Furthermore, the comprehensive plan may be used as guidance by the HSCLT on how to incorporate Smar t Growth principles into potential future activities. Winter Parks uses a restricted approach to permitting multi-unit developments; the comprehensive plan discourages high density residential development but allows such development in some areas and includes provisi ons for changes to zoning. The comprehensive plan states repeatedly that low density residential development is necessary in order to maintain the existing village feel of the community. HE Policy 1-1.1.2 requires new development to conform to the design characteri stics of neighboring buildings, wh ich generally perpetuates lowdensity development since most existing structures are of small scale. GOPs mandate that new development matches present development, fu rther dissuading high density development (HE Policy 3-1.5.6. and FLUE Policy 1-3.6.4). Specific to the management of HSCLT, FLUE Policy 1-4.1.H.3 disallows increasing density if low-de nsity development is sufficient to provide affordable housing.
81 However, the comprehensive plan also cont ains provisions for ra ising density levels. FLUE Objective 1-3.6 supports multi-unit developm ent by preventing exclusion of high-density development. Policies 1-3.6.1 and 1-3.6.7 compel Winter Park to amend its density standards if necessary to meet the changing needs of th e community. Policies directed at HSCLT encourage multi-unit development for seniors, disabled persons, and affordable housing (FLUE Policy 1-4.1.H.4 and FLUE Policy 1-4.1.H.11) Finally, HE Objective 3-1.9 stipulates that high density residential development, which inherently includes multi-unit developments, is created in tandem with mass transit. The comprehensive plan contains provisions that could enable the HSCLT to support buyers in purchasing existing homes. Properties with tax delinquencies are m onitored so that the city may purchase homes in danger of foreclosur e that are located in neighborhoods with lowerpriced homes with the intention of preservi ng affordability (HE Policy 3-1.2.11 and HE Policy 31.5.1). For the HSCLT, the city is willing to consider the use of condemnation in order to achieve the goals of the orga nization (HE Objective 3-1.2.3). Affordable housing preservation is a stated objective within the comprehensive plan (HE Objective 3-1.2). Preservation incl udes preventing loss of the physical stock of affordable houses as well as keeping the units affordable for lowe r income populations. Organizations dedicated to affordable housing development are granted assist ance from the city for construction, financing, and programmatic support. The HSCLT is explici tly supported by the comprehensive plan in the organizations goal of providing long term multi -generational affordable housing in the City of Winter Park (H E Objective 3-1.2.1.). Is CLT development spatially clustered? The existing HSCLT development in Canton Park is a cluster of 10 homes and the proposed HSCLT development of Comstock will be a
82 clustered, four-home development (see Figure 4-5). The HSCLT developments are located within residential neighborhoods, although some adjacent parcels have other land use designations. The two developments are rela tively close to each other as well (see Figure 4-6). The comprehensive plan supports clustered land patterns if the development or redevelopment promotes low-density residential uses (FLUE Policy 1-3.6.6). Language on clustered development does not extend beyond the afor ementioned policy in the FLUE or HE. Preservation of the natural environment and ecologically friendly land use management is a priority for the City of Winter Park as dem onstrated by the numerous GOPs directed at such issues. The comprehensive plan contains language that recognizes the inhe rent need to protect the existing natural areas (FLUE Goal 1-1). Existing trees are e xpressly protected and cannot be cut down without signifi cant justification. Thus, the aesthetic and ecologi cal value of natural landscaping is important to the character of the city and must be incorporated into future land use decisions (FLUE Objective 1.3.11). By the conc lusion of 2008, the city will decide on the applicability of a Park Overlay Zone, an area designated with the inte nt of preserving open areas and parks from encroaching development that may negatively impact their appeal and overall existence (FLUE Policy 1-3.4.3). The city clearly encourages and supports economic development in the comprehensive plan (FLUE Goal 1-1). As community revitaliza tion is an overriding theme of the comprehensive plan, economic development is thereby a priority of the city (FLUE Objective 1-3.2). Yet, the type of economic development or redevelopment is generally limited to maintaining the status quo of land use designations and keeping residen tial areas separate from non-residential areas (FLUE Objective 1-3.5). GOPs include language on containing non-residential development to pre-existing areas of compatible land use, such as the Central Business Dist rict (CBD), with the
83 intent of strengthening economic health by ach ieving cluster developm ent (FLUE Objective 13.2). An option does exist for a change in land use designation when warranted by a lack of available space for such development (FLUE Policy 1-3.5.1). The HSCLT is restricted from mixed-use de velopment in certain geographic areas. With the justification of preserving re sidential areas, three policies in the FLUE state areas that are prohibited from any form of non-residential development (FLUE Policy 1-4.1.H.6, H.7, H.8). However, HSCLT is designated as an adjunct of the CBD, meaning that the organizations development decisions are to coincide w ith those of the CBD (Policy 1-3.2.3). Implications of Findings The HSCLT has the potential to use Smart Grow th principles to guide its decision making and overall mission based on the its current opera tions and comprehensive plan under which it functions. Some of the Smart Growth principl es are already instituted, such as clustered development and creating permanently afford able housing options. Other Smart Growth principles have been considered but not yet implemented, like multi-unit developments. All six Smart Growth principles are possible under the current parameters within which the HSCLT operates (see Table 4-3). The HSCLT is a young organization with great po tential to have a si gnificant impact on the Winter Park community. The financial and programmatic support curren tly given by the local government attests to the community s acceptance of the organization and its ability to thrive in the future. As it becomes an autonomous organiza tion from the city, the HSCLT should diversify its portfolio and membership base while learning from national examples of successful CLTs. Increasing the use of strategies such as Smart Growth could improve th e HSCLTs functionality, the organizations appeal to investors and co mmunity groups, and its role in planning on the regional scale.
84 Figure 4-1 Location of Winter Park, Florida
85 Figure 4-2 Location and Visual Images of th e HSCLT and its Neighbo rhoods within Winter Park
86 Figure 4-3 Surplus or Deficit of Affordable Housing Units Based on Household Income Levels in Winter Park, Floridas CRA Source: City of Winter Park Co mmunity Redevelopment Agency, 2007. Affordable Housing Stock0 500 1000 1998200020052010 YearUnit Surplus/D e (2000) (1500) (1000) (500) Total $40,000 and over $25,000 to $40,000 $15,000 to $25,000 Less than $15,000
87 Figure 4-4 Photographs of Existin g HSCLT Development Canton Park Source: Orange County Pr operty Appraiser, 2006
Figure 4-5 Land Use Designa tions of Parcels within the HSCLT Developments 88
89 Figure 4-6 Arial Photograph of Hannibal Square Neighborhood and the HSCLT Developments
Table 4-1 Comparison of the C lassic CLT Characteristics with Those in the HSCLTs ByLaws List of Characteristics of Classic CLT Model from the National CLT Network Exact Language in the HSCLTs By-laws Purpose: A CLT has among its purposes the provision of decent housing that is affordable to persons of low-income or moderate-income, with a primary purpose of meeting the needs of charitable populations, as defined by the IRS. Section 2.2: "The specific and primary purposes of the Corporation are: Section 2.2.a. "To provide opportunities for very low, low, and moderate income families to secure housing within the Winter Park Community Redevelopment Area that is decent and affordable and that is controlled by the residents on a long-term basis." Corporate Status: A CLT is a private, nonprofit corporation that: (i) has a 501( c)(3) or (4) tax exemption; (ii) is not sponsored by a for-profit organization; and (iii) reserves no more than a third of its board for appointees or employees of a local government. (i) Section 2.1. "The Corporation is organized and shall be operated exclusively for charit able and educational purposes directlythat qualify as exempt under Section 501(c)(3) of the Internal Revenue Code of 1986" (ii) no mention of sponsorship (iii) Section 4.2. Ther e shall be three categories of Directors, ... with each category composing one-third of the total board ... The three categories shal l be "Lessee Representatives" representing Lessee Members, "General Representatives" representing General Members, and "Public Representatives" representing the intere sts of the general public." No category is defined as appointees or empl oyees of a local government. Land Ownership: A CLT acquires parcels of land that are then: (i) owned in perpetuity by the CLT; and (ii) conveyed under long-term ground leases. (i) Section 7.3 "Sale of Land. Th e sale of land does not conform with the philosophy and purposes of the Corporation. Accordingly, land shall not be sold except in extraordinary circumstances when the sale is considered a necessary means of achieving the purposes of the Co rporation..." (ii) Section 7.1 "Principles of Land Use. The Bo ard of Directors shall oversee the use of land owned by the Cor poration and shall convey the right to use such land so as to facilitate access to land, affordable housing, and other improvements..." Home Ownership: For owneroccupied housing, a CLT transfers ownership of structural improvements that are located on leased parcels of land to homeowner/lessees. Section 8.8. "In accordance with the purposes of the Corporation, the Board of Dir ectors shall take appropriate measures to promote and facilita te the ownership of housing and other improvements on the Corporation's landThese measures may include, but are not limited t o, provisions for the sale of housing or other improvements..." 90
List of Characteristics of Classic CLT Model from the National CLT Network continued Exact Language in the HSCLTs By-laws continued Permanent Affordability: A CLT retains a preemptive option to purchase any structural improvements at a price determined by a formula that is designed to ensure such improvements remain affordable in perpetuity for persons of lowincome or moderate-income. Section 8.2. "It is the pu rpose of the Corporation to preserve the affordability of housing and other improvements for very low, low and moderate-income families in the future. Accordingly, when land is leased for such purpose, the Board of Directors shall assure that, as a condition of the lease, the Corporation is granted the right to purchase a ny lessee-owned housing or other improvements on the land, for a price determined by the "resale formula," at such time as the lessees wish to sell or the lease is terminated." Section 8.3 Resale Formula. For the purpose of preserving affordability, the Corporation shall restrict the price that ground lessees may receive when they sell housing and other improvements located on the land that is leased to them by the Corporation." Service Area: A CLT serves any particular geographic area specified in the bylaws of the organization. Section 2.2.a through e "within the Winter Park Community Redevelopment Area" Corporate Membership: A CLT has a corporate membership that is open to any adult resident of its service area and to any other class of members defined in the organizations bylaws. Section 3.1 "Voting Membership. S ubsequent to the first annual meeting, the Voting Members of the Corporation, with full voting rights, shall consist of and be: a. The Lessee Members, who shall be all persons who lease land or housing from the Corporation, or who lease or own housing located on land leased by another entity from the Corporation. b. The General Members, who shall be all othe r persons, eighteen years of age or older, who have complied with each of the following requirements: iii. [Members who] [r]eside or work within the Winter Park Community Redevelopment Area..." Board Composition: A CLTs board of directors is composed of equal numbers of: (i) lessees; (ii) corporate members who are not lessees; and (iii) any other category of persons described in the bylaws of the organization. Section 4.2. "There shall be three categories of Directors, each consisting of not less than three (3 ) Directors, with each category composing one-third of the tota l board ... The three categories shall be "Lessee Representatives" representing Lessee Members, "General Representatives" representing General Members, and "Public Representatives" representi ng the interests of the general public." Board Selection: A majority of the directors on a CLTs governing board are elected by the corporate membership. Section 4.1. "the Voting Member s shall elect a Board of Directors consisting of nine (9) persons. 91
92 Table 4-2 Findings from Co mparison of the HSCLT to th e Lincoln Institute Study Formation The when, why, and how of the CLT's creation HSCLT Lincoln Institute Study Incorporated in 2004 43% formed from 2000-2006 CRA most influential factor in creation Top 3 supporters: local individua l(s), local community groups, local government or public official Reaction to housing prices and some community concerns 79% reported increasing housing prices a major impetus Structure How the CLT is set up to function HSCLT Lincoln Institute Study Limited leadership personnel Full-time staff size: mean = 2, median = 1 Extensive membership influence 70% of CLTs have memberships Traditional Board composition Only 29% of CLTs use 3-part structure Portfolio Current and project ed real estate holdings HSCLT Lincoln Institute Study Current holdings: 10 developed parcels with single family, detached homes Number of parcels owned by CLTs: mean = 37.4, median = 13.4 Future holdings: 2 undeveloped parcels planned for 4 single family, detached homes Types of housing developed by C LTs: sf detached = 55%, sf attached = 14%, multi-unit = 16% Employs ground lease to convey ownership 77% of CLTs use ground leases Objectives Description of residential and non-residential activities and goals HSCLT Lincoln Institute Study Efforts directed toward affordable housing development Low-income population most commonly served, followed by very low-income, then moderate-income No experience in non-residential, non-single family development 25% of CLTs lease land for non-residential uses Relatively limited future plans 70% of CLTs do new construction, 55% acquire existing houses, 56% do new and rehab construction Source: Sungu-Ermilmaz and Greenstein, 2007.
Table 4-3 Assessment of the HSCLTs Current Incorporation of Smar t Growth Principles Evaluation Criteria of CLT from Harmon, 2004 Link to Smart Growth Principle as Defined by Smart Growth Network Data Source in Addition to Interviews HSCLT Findings Does the CLT create multiunit developments? Housing opportunity, compact building design and multi-modal transportation options By-laws No Does the CLT aid buyers in purchasing non-CLT created homes? Investment into established communities By-laws No Are CLT homes perpetually affordable? Housing opportunity Housing Data Yes Is CLT development spatially clustered? Development of community identity Site Analysis Yes Does the CLT include provisions for preserving open space and parks? Preservation of natural areas By-laws, Site Analysis, Future Land Use Map in Comprehensive Plan No, although occurs Does the CLT contribute to economic development through community revitalization and mixed-use development? Mixed-use development By-laws No, although occurs Source: Harmon, 2004. 93
CHAPTER 5 CONCLUSION The descriptive and theoretical assessment of the CLT model used by the City of Winter Park, Florida demonstrates how the model applies to a specific community and its potential to work consistently with comprehensive plan goa ls, objectives and policies. The HSCLT meets the classic CLT definition overall, although the au thor recommends in some instances more precise wording in the organizations by-laws to more clearly meet the c lassic characterization. Doing so benefits the HSCLT in terms of iden tifying with the national CLT organizations and the inherent advantages of the CLT model. Since the HSCLT met the classic definition overall, the findings of the case study are releva nt to the CLT model in general. The examination of the individual charac teristics of the HSCLT shows that the organization follows the trends found in the Li ncoln Institute study. Bei ng a relatively new CLT, the HSCLT has the opportunity to gain from past organizations experiences while still serving as a pioneer in creating ownership opportunities that maintain long-term affordability. Areas of potential improvement for the HSCLT include defi ning the roles of its ad visory board to better serve the organization, ascertaining the effects of the voting member ship on the efficiency of the organization, and expanding its portfolio holdings. Clearly establishing the role of the advisory board optimizes the organization s use of its resources. The advisory board can be used by the HSCLT in several ways, such as aiding in f undraising or educating the community and the HSCLT residents. However, a change in administ ration of the HSCLT could lead to a diminished capacity of the advisory board. Since the role of the advisory board is unclear in the HSCLTs organizational documents, no guidance exists to optimize its role in providing guidance to the HSCLT. 94
95 The Lincoln Institute study found that most CLTs did not permit their voting membership to decide on all the issues outlined in the Li ncoln Institute study. The HSCLT grants its voting membership substantial control of the organization by allowing them to vote on numerous issues that affect how the organization functions. While this enables the voting membership to have significant input in the organization, it may reduce th e efficiency of the organization if continual conflict arises or if the voting membership does not have sufficient knowledge to make the best decisions to lead the organization. The HSCLT ma y need to reevaluate the influence of the voting membership on the organi zation. A potential solu tion for reducing the responsibilities of the voting membership while still enabling member s to have a stake in the organization can be accomplished by requiring the Board of Directors to vote on these issues. This transfer also places authority in a group dedicated to represen ting the needs of the membership who may also have more experience and knowledge of the orga nization than the voting members. Additionally, increasing the role of the Boar d can stabilize the organization because the nine-member Board understands the mission of the organization. The HSCLT should use a greater variety of mechanisms to increase its portfolio. Additional planning tools are avai lable for affordable housing creation. Rehabilita tion of older structures may be less expensive, especially in a community with limited open space available for new construction. Development of rental unit s enables the HSCLT to create an alternative option for residents that coul d not afford to purchase a home. Mixing density of HSCLT developments gives the organization an opportu nity to offer a mixture of housing types introducing greater density developments, thereby potentially providing more units at a lower cost.
Currently, the HSCLT has a small portfolio of affordable homes. A small number of affordable opportunities limits the potential impact of the organi zation on the greater community. In a city with just over 2,800 residents, the HS CLT needs to increase its ability to provide affordable housing options to ju stify the expense of developm ent currently supported almost exclusively by the City. Since th e organization was established with the support of the public sector, the community clearly supports the HSC LTs goals. However, the HSCLT may encounter diminishing support if the public does not experi ence the full benefits of the CLT model. The extent of positive effects of employing the CLT m odel such as economic stability for residents is limited due to the small supply of units. The relatively recent establishment of the HSCLT explains in part the small portfolio but futu re plans of the organization should focus on significant expansion of development. Alternatively, the organization may justify its use of public funds by promoting other objectives aside from the creation of permanently affordable housing. While the HSCLT developments increase the mix of income with in existing neighborhoods of Winter Park, the affordable units have been limited to the Hannibal Square planning area. Expanding development into more affluent areas such as east Winter Park could better result in the benefits of mixed-income development. In addition, by constructing multi-uni t developments of affordable housing or combining residential units with commercial or office spaces, the HSCLT may lower its development cost per residential unit. If located in an area su ch as the edge of the Central Business District (CBD) and resident ial neighborhoods, the organization may avoid NIMBYism because the development will be located within a transition zone between neighborhoods and more intensive commercial activity associated with the CBD. Especially if the development includes a mixture of uses and/or incomes, it will also benefit a greater range of 96
community members and thus could be more a ppealing to a broader number of residents and stakeholders. The community of Winter Park is well situated to employ Smart Growth strategies in its development planning, and the HSCLT similarly has the capability of implementing Smart Growth principles in its operati ons. The Winter Park CRA consid ers all development within its boundaries as infill; therefore new development in this area has the capability of meeting Smart Growth goals. The HSCLT must follow the compre hensive planning initiatives dictated by the Winter Park CRA, thus some of its activities inherently follow Smart Growth principles. By furthering the incorporation of Smart Growth pr inciples into its operations, the HSCLT has the ability to provide a more positive impact on the community while increasing its role in urban planning at a larger scale. Fo r instance, creating a program to aid residents in buying non-CLT homes allows the HSCLT to quickly diversify its portfolio, gain experience in varying forms of development and management, and meet the Smart Growth principle of investing in established communities. Other principles of Smart Growth may prove more challenging for the HSCLT, such as clustered development. Further clustering HSCLT developments will become increasingly difficult due to la ck of physical space, and clus tered development may not meet some goals of the organization. However, by iden tifying future obstacles and adjusting planning efforts as necessary, the HSCLT can still incorporate Smart Growth principles while proactively managing the organization. The Sawmill CLT repr esents the successful institution of Smart Growth and could be used by HSCLT as an example to follow. Given that the HSCLT is currently developi ng a five-year business plan, the organization has an opportunity to further incorporate Smar t Growth principles, sustainable neighborhood design, and mixed-income development. Using Smar t Growth principles in its planning can be 97
an instrument for the HSCLT to promote res ponsible and holistic development while aligning itself with the City of Winter Park. Demonstratin g to the City that the HSCLT has a clear plan that supports the Citys planning objectives can result in a recipr ocally supported pa rtnership that will ensure funding for the HSCLT and permanently affordable housing development for the City. Integrating sustainable neighborhood desi gn and mixed-income development serve as additional options for the HSCLT to strengthen its partnership with the City while planning for its future. The HSCLT should remain conscientious of the drawbacks of the CLT model. The HSCLT may face challenges in financing the pu rchase of homes. Although the organization successfully sold the homes in the first developmen t, the financial market frequently changes due to mortgage interest rates and institutional policie s. Also, some interested buyers may find more difficulty than others due to lower income levels or higher housing prices. The HSCLT should remain proactive in maintaining relationships wi th lending institutions and continually research funding mechanisms developed across the nation. An additional concern is the legality of the CLT models design. Thus far the courts have supported the split ownership, restricted equity and restrictions on owners initial income and leasing issues such as subletting inherent to CLTs. Yet, preventing a future dispute requires the HSCLT to consistently and equitably enforce the resale formula, maintenance requirements, and property use restrictions Finally, keeping the organization financially solvent requires the HSCLT to remain vigilant of opportunities for funding and efficiently manage the organizations finances. Continually developing supportive partnerships with the City of Winter Park, financial institutio ns, and private donors perpetuates opportunities for fundraising. Also, the HSCLT can cr eate standards for financial management as part of their five-year business plan, which is currently under development. 98
The accomplishments of the HSCLT to date a nd the organizations cu rrent use of Smart Growth show the potential of the CLT model to work in tandem with other urban planning strategies. For instance, the Bahama Conch C LT, the organization th at advised the HSCLT during formation, uses historic preservation as part of the CLT development. A CLT that employs Smart Growth principl es can contribute to sustai nable neighborhood design through enhancing the equity component especially and can promote mixed-income development by way of planning on a larger scale. The case study of HSCLT warrants furthe r exploration of the relationships among CLTs, Smart Growth, and other urban planning strategies. The case study analysis of the HSCLT demonstr ates the importance of the CLT model in producing affordable housing. This study includes a di scussion of the afford able housing crisis in America and strategies used to address that crisis. An in-depth review of publications on Smart Growth and the CLT model showed the theo retical connection between the two planning strategies. The methodology based the analysis on three studies published on the CLT model. The results described in detail the purpose of the HSCLT and its impact on the Winter Park community. Furthermore, measurement of the ex tent to which the HSCLT implements Smart Growth principles shows initial results of said principles, and the potentia l of the organization to further incorporate them. Appendi x B depicts the relevance of findings of the case study. By linking the design of the case study, the purpos e of each component of the methodology, and recommendations for the HSCLT, the case study concludes that the CLT model can result in planning for affordable housing at the regional scale using a co mmunity based model, providing permanent affordability to a range of lower inco me populations, and being an integral part of land use decisions and an asset to the community. 99
The analysis of HSCLT serves as a foundation for greater ex ploration of the CLT models utility. Further research on the CLT model and it s relationship to Smart Growth could include a comparison of multiple case study subjects. Looki ng at a variety of CLTs in terms of size, duration, and location would expand the applicability of the fi ndings on the connection between the two topics. Several supplementary studies of the HSCLT would provide greater understanding of the CLT model in the context of gent rification, of the real estate market in the Southern United States, and of the importance of Board and Ex ecutive Director experience in determining the organizations effectiveness. Returning to the HS CLT after its initial five years of existence would show if and how the organization obtained self sufficiency. Also, a quantitative measure of success in creating permanently affordable residences would be possible after a reasonable number of resales occurred. Research on the C LT model, its relationship to Smart Growth, and the HSCLT in particular should continue in order to benchmark successes and areas for improvement of this important option to creating permanently affordable housing. 100
APPENDIX A UNIVERSITY OF FLORIDA INSTITUTI ONAL REVIEW BOARD APPROVAL OF INTERVIEWS Note: The title of this thesis was adjusted after the thesis defense which is not reflected in the informed consent letter as the letter was written prior to the thesis defense. 101
APPENDIX B FLOW CHART DEMONSTRATING THE R ELEVANCE OF FINDINGS THROUGH CASE STUDY DESIGN Descriptive Case Study Methodological Design Meeting Classic Criteria National Comparisons Smart Growth Capability Limited Incorporation of Smart Growth Principles Similar to Lincoln Institute Findings Sufficiently Meets Most Criteria Use National Example CLTs to Guide Future Decisions Include Smart Growth Principles in 5-year Plan and Implement in Future Adjust to Meet Precise Definition Planning for Affordable Housing at the Regional Scale Using a Community Based Model, Providing Permanent Affordability to a Range of Lower Income Populations, and Being an Integral Part of Land Use Decisions and an Asset to the Community Generalizes Findings to CLT Claims and Vice Versa Describes HSCLT; Relates to National Trends Application of Planning Theory; Guidance for HSCLTs Future Activities 103
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109 BIOGRAPHICAL SKETCH Teresa Russin was born in Gainesville, Fl orida on November 28, 1982. As an only child, she was raised in Gainesville by her parents, Ri chard and Mildred Russin. After graduating from Buchholz High School in 2001, she moved to Orla ndo to attend the University of Central Florida. She was heavily involve d in student activities and lead ership while at UCF, including participating in LEAD Scholars, working as a Reside nt Assistant, and servi ng as president of the Omicron Delta Epsilon Economics Honors Society. She earned her real estate license in 2003 and interned for Pulte Homes, Inc. in Merritt Is land, Florida, the summer prior to graduation. She graduated in 2004 summa cum laude with a Bachelor of Science in Business Administration degree, majoring in economics. Instead of pursui ng a career in real estate, she returned to Gainesville to prepare for graduate school, initially in the field of economics. A change of heart led Teresa to the Urba n and Regional Planning Department at the University of Floridas College of Design, C onstruction, and Planning. In 2005, she entered the urban planning field as a graduate student and a research assistant for Dr. Kristin Larsen and Dr. Ruth Steiner. She served as the Student Planni ng Associations president for an academic year. In 2007, she was hired by the Shimberg Center for Affordable Housing as a research assistant. She is currently following her interests of improvi ng the capability of urban planning to increase affordable housing opportunities and of using adva nced methods of analysis to improve the knowledge base and decision maki ng power of urban planners.