In fact, in 2020 Kendall Whitier was one of three winners of the national Great American Main Street Award (GAMSA) for excellence in comprehensive preservation-based commercial district revitalization. “In just 10 years, Kendall Whittier Main Street has radically changed the perception of the neighborhood and become the center of community life for its residents,” said National Main Street Center President and CEO Patrice Frey.
So why can’t markets be designed in such a way that lower-income Black residents are able share in such success instead of being displaced by it? It’s a familiar dilemma for a disproportionate number of Black-majority neighborhoods. Many of them suffer from devaluation and protracted lack of investment and development, then when they finally do attract investment and development, it often ushers in gentrification which drives out Black residents. While this is true for renters and homeowners alike, renters are more vulnerable and usually more numerous in such neighborhoods, so they bear the brunt of gentrification’s impacts.
There ought to be a way renters can get a share of the benefit when their neighborhoods develop and property values rise, instead of getting displaced. The non-profit Trust Neighborhoods has designed one: the Mixed Income Neighborhood Trust (MINT).
Trust Neighborhoods helps local community groups in places like Tusla’s Kendall Whitier neighborhood set up MINTs to build high-quality affordable housing, not just in one project or one block, but scattered across the whole neighborhood. Using debt and equity financing, the local group builds new rental units on vacant lots, and buys and renovates vacant buildings and “naturally occurring affordable housing” (or NOAH — housing which happens to be low-cost, but which is not federally subsidized).
As the local MINT partner assembles its portfolio of rental units across the neighborhood, it does something counterintuitive with them: it rents them out at a mix of different rates. Most units are subsidized and required to stay permanently affordable, but a minority of them are allowed to have their rents rise at market rates, cross-subsidizing affordable units whose capped rents rise only at the rate of inflation.
As in the Frolic model, MINT renters are also co-owners, holding shares that give them an equity stake. But instead of holding shares in the particular project where they live, they hold shares in the entire portfolio of MINT housing across the entire neighborhood. That way, all the tenants who can afford to pay higher, market rents subsidize rents for all the tenants with lower incomes, preserving affordability.
As the MINT’s properties and the whole portfolio appreciate in value, the value of the shares goes up for everyone, subsidized and market-rate renters alike, enabling them to build wealth.
This makes renters of affordable housing economic stakeholders, creating a degree of alignment between them and homeowners. Normally, their interests diverge, since higher rents and property values benefit homeowners, but hurt renters and tend to displace them. But with MINTs, renters and homeowners alike benefit as neighborhood housing prices rice. In that sense, MINT renters are like owners.
It’s an innovative model that draws on some deep wells of experience. Trust Neighborhoods is a partner organization of the Brookings Institution. Before joining it, CEO David Kemper helped create New York City’s Division of Capital Planning, and managed affordable housing finance under the Bloomberg and de Blasio mayoral administrations. Prior to becoming Trust’s chief operating officer, Kavya Shankar worked at McKinsey and Company and the Obama White House, then helped start the Obama Foundation. They both applied the lessons of their experience to designing a system that gives renters a stake in neighborhood development, and lets them benefit from it similarly to homeowners. “Philosophically, we want residents who don’t have wealth today to invest to be able to participate in the benefits,” says Kemper.
MINTs are financed with a mix of philanthropic investments and so-called concessionary capital, which is willing to accept low returns. Equity returns are split between the funders and the neighborhood, building community wealth long-term.
“Instead of trying to raise capital from residents, the funding structure is based around harnessing the capital that wants to be in the neighborhood in a non-destructive way. We’ve actually structured the MINT so that money stays in the neighborhood,” says Kemper. “If a neighborhood appreciates dramatically in value, instead of an extractive proposition where outside investors are the ones that get all the benefit, there’s almost a soft cap on investor return. A larger and larger percentage of the returns stays in the trust as a fund for the community. There are some guardrails around how it can be spent. But the idea is, that money will become important five years out and beyond, so the fund is somewhat flexible, relying on the sense of the trustees of that future time of how it should be allocated. It could be anything from issuing a dividend for everyone in the neighborhood, to making capital improvements to community assets like lighting or sidewalks in a park.”
MINTs are structured to protect renters’ interests and give them a stake and a voice in how the neighborhood develops. Trust Neighborhoods conducts workshops to teach community members how the model works, elicit what they care about most and identify how MINTs can help them accomplish it. If renters are underrepresented in work of the local partner group, the workshops help increase their representation and sharpen the focus on the issues they want to address. With Trust Neighborhoods facilitating and providing legal expertise, community members actually write the legal agreement founding the trust.
“The resident workshops have been an incredible process,” says Kemper. “Residents really grab onto the model fast because we built the MINT model out of interviews with residents and neighborhood groups with similar experiences. They say, ‘how about this policy, we also want this policy, and this other policy.’ The residents themselves have some of the greatest expertise in these neighborhoods, and their ideas are really concrete and detailed. In an early workshop taking on some of the tensions to address in a Purpose agreement, a resident said , ‘oh, we’re going to be both the landlords and the tenants.’ Residents take up both sides and work through the tensions.”
MINTs are governed by a “perpetual purpose trust” which has a fiduciary responsibility to keep subsidized unit rents permanently affordable. The resident-owners steer the trust; they get a vote and representation in its governance, whereas outside investors don’t.
The MINT’s ability to engage residents early, tap their knowledge and leadership, and keep them engaged is one of the model’s particular strengths. “I worked in affordable housing in New York City,” says Kemper, “and the difference in the way MINTs engage a community is like night and day compared to the way it’s too often been done.”
But residents aren’t responsible for every single day-to-day decision, either. In coops and certain other models, residents make all the decisions themselves, which can sometimes engender conflict or disincentives that get in the way of an overarching, long-term mission. But the MINT’s governance combines community decision-making and guidance with professional expertise that helps it stay focused on permanent affordability and community benefits. The purpose trust has a stewardship committee composed of three community representatives together with legal, real estate, and property management professionals.
“These individuals are mission-oriented and incredibly aligned with the values of the MINT, but they run it as a real estate project, with the affordability mandate in mind,” says Kemper. “We hope that the trust stewardship committee in most cases is very bored, because the project is operating smoothly according to built-in guardrails, so it runs efficiently and also delivers real impact for the community.”
Two fully funded MINT pilots are underway: one is in the Lykins neighborhood of Kansas City; the other is in Kendall Whittier. The Kendall Whittier MINT was established by the Growing Together, a local partnership supported by the Community Action Project of Tulsa County. Growing Together realizes that downtown’s growth will stoke demand for affordable housing, and is working to stay ahead of it. Kendall Whittier has 230 empty lots, which the group can leverage as an affordable housing resource through the MINT. Its philosophy has been described as “gentrification with justice” for Kendall Whittier residents [iv].
“Gentrification is a very loaded word, but in a way, MINTs are hacking gentrification in service of current renters,” says Shankar. “We’re getting ahead of gentrification and actually using it for the benefit of renters, which is the population most vulnerable to displacement.”
– Kavya Shankar, COO, Trust Neighborhoods
The MINT model, though still being tested, is designed for scale. MINTs don’t just create one affordable housing project, or even a whole block at a time, but a whole portfolio of housing that can help steer the direction of the whole neighborhood. And they’re attracting interest from neighborhoods nationwide.
At present writing, Trust Neighborhoods has 126 local community development organizations in its pipeline eager to explore MINTs , including in Oakland, Cleveland, Memphis, and Atlanta. In the short term, Trust is fundraising to staff up and hopes to support five of these neighborhood organizations to start their own MINTs later this year.
Grounded Solutions, the organization that assists and networks hundreds of community land trusts nationwide, sees MINTs as complementary to CLTs, and has expressed interest in offering them to its members. Trust Neighborhoods anticipated growing demand and uptake as it set up the Kansas City and Tulsa pilots, deliberately developing legal documents and other features that can be used as templates to streamline the creation of new MINTs.
“The idea was every step of the way, build something that could be taken to another neighborhood and used in that context,” says Shankar. “So we spent a lot of time upfront on the process, but I think will pay off as we start to move into other neighborhoods. There are a lot of community development solutions that are really incredible, but their scope is very small. We want MINTs to be a standard affordable housing product that is recognizable, replicable in many neighborhoods, trustworthy for the community and investors, and able to put private capital to work in service of neighborhoods.”
Whereas community land trusts are attracting public investment and becoming widespread, for now, Trust Neighborhoods, Frolic, and Parity remain small-scale but powerful examples of innovations that have the potential to catch on and shift markets toward equity and community.
All four models each change basic parts of the traditional housing equation. CLTs replace fee-simple ownership with owning the home and leasing the land from a community-led trust, creating permanently affordable housing. Parity replaces atomized individual buyers with a group of buyers who are already socially connected and bring their own social capital with them, instantly creating connected neighborhoods a block at a time. Frolic replaces single-family properties in upzoned neighborhoods with multi-family coops which build community, fight displacement, and allow generational renters to enter into homeownership. Trust Neighborhoods replaces high market rents that force people of limited income out of gentrifying areas with a structure that makes renters co-owners, keeps their rents below market, and allows them to benefit from the neighborhood’s appreciation in value.
Each of these models are examples of how fundamental aspects of the housing market can be consciously redesigned for equity, inclusion, and community, and how market redesign has the potential to solve retrenched problems. They illustrate, each in their own way, how it’s possible to unwind devaluation of Black neighborhoods and its downstream consequences, and re-value Black communities, if the structural roots of these problems are addressed with structural solutions.