Building on what’s there: Creative paths to affordable homes

Oct 8, 2024
Houston Community Land Trust members at the second annual Membership Meeting
Houston Community Land Trust members at the second annual Membership Meeting

Ashley Allen, founding Executive Director of Houston Community Land Trust (HCLT) approaches homeownership not just as an effective way to build assets but also a means to foster family, stability, and security.

“For most people working hard every day and struggling to make ends meet, their priority isn’t flipping a house to make a profit in five years and upgrade to a bigger home,” she explains. “They’re thinking, ‘I need a safe, comfortable place for my family to come home to and rest their heads at night.’” This focus reflects the values held by many of the communities served by HCLT. 

Across the city of Houston, Black residents are increasingly being forced out of their communities, particularly in formerly affordable, historically Black neighborhoods such as the Third Ward, Fifth Ward, Sunnyside, and Independence Heights, all of which are experiencing gentrification. Once vibrant centers of Black-owned businesses and civic leadership in the early 20th century, these neighborhoods are now seeing long-time residents leave. Between 2000 and 2018, the Third and Fifth Wards, Sunnyside, and Independence Heights lost approximately 10,000 (20%) of their Black residents. Today, rental housing dominates, comprising 75% of the housing stock in the Third Ward alone. As rentals rise and homeownership declines, the result is high turnover and weakened community ties. 

In 2017, Hurricane Harvey hit, causing catastrophic flooding that destroyed thousands of homes and displaced many residents. The natural disaster opened the door for speculators and developers to buy land cheaply and to build expensive new developments, further pricing long-time residents out of their communities.  

Recognizing the urgent need for sustainable housing solutions, local activists fought for the creation of the HCLT, aiming to protect communities from the encroaching threat of gentrification and speculative development. At the heart of the Community Land Trust (CLT) model is the idea of community ownership of the land. “Communities are being targeted and gentrified,” says Ashley. “Community ownership is a tool that can be used to fight the displacement that results.”

Ashley Allen, founding Executive Director of Houston Community Land Trust
Ashley Allen, founding Executive Director of Houston Community Land Trust (HCLT) and Economic Architecture Spotlight Innovator

In the United States, most home purchases provide “fee simple” ownership to buyers, which includes ownership of both the house and land underneath. A home’s financial value under fee simple ownership appreciates over time, due to the increasing value of the land it sits on, as land tends to gain worth through scarcity, location desirability, and market demand. The rise in property taxes, due to the rapid appreciation, can then make a home unaffordable for long-term residents, forcing them to sell and buy far outside of their neighborhood or lose their home. 

CLTs are based on an alternative concept of property rights and homeownership. CLTs, like HCLT, separate ownership of the land from the house. The buyer receives a subsidy to purchase a home at a price they can afford and puts the land “in trust” to keep it permanently affordable. The land remains a community asset, removed from the speculative market. The homeowner owns improvements to the home and has exclusive rights to the land underneath their home through a 99-year renewable ground lease. Since the property value is assessed at the affordable, subsidized CLT price rather than the market value, it permanently lowers the price of the home and prevents speculative development that contributes to gentrification and displacement. The CLT model holds space for affordability in a community, even amidst market rate development occurring in the neighborhood.

HCLT limits home appreciation by capping it at 1.25% per year, calculated based on the original purchase price, not the current or future market price. This approach ensures permanent affordability for the current homeowner and future buyers without the need of additional subsidy to keep the home affordable, while allowing homeowners to build wealth through modest equity growth. Homeowners benefit from lower mortgages averaging about $107,000 and significantly lower property taxes, making the overall approach both financially sustainable and accessible. HCLT also offers post-purchase stewardship, which includes foreclosure prevention, homeowner workshops, home maintenance support, disaster recovery assistance, and leadership opportunities within the CLT. 

A group of HCLT members in blue shirts outdoors
HCLT members celebrated the global community land trust movement on World CLT Day in 2021.

When HCLT first started in 2018, it partnered with the City of Houston and the Houston Land Bank to create affordable housing by constructing new homes. This partnership allowed HCLT to deliver new affordable housing units in key neighborhoods with homes built by the City on Land Bank lots, but demand quickly exceeded the City’s ability to build new homes. 

Recognizing an opportunity to serve more people across Houston, Ashley and her team launched a bold new initiative in 2020: the Homebuyer Choice Program (HCP). “Instead of trying to build our way out of the affordability crisis,” Ashley explains. “We thought, let’s make the existing housing stock across Houston more affordable. This way, homebuyers can choose where they want their affordable home to be.” 

Through its HCP, HCLT enables homebuyers ranging from 40-80% of the Area Median Income to comfortably purchase a home and, in many cases, at a cost lower than renting (considering the average HCLT mortgage payment is less than $1,100 per month). The goal is to not only help buyers purchase a home but also ensure they can afford to remain in it. Buyers in the program can choose a home anywhere in the Houston metro that is already on the market and meets certain criteria. HCLT will subsidize the purchase with up to $150,000. Once the new owner buys it, the home becomes a permanent part of the CLT, whose mission is to keep it secure and affordable. Through the HCP, HCLT’s holdings are not limited to land in certain neighborhoods, like so many CLTs across the United States, and can expand throughout the Houston metro area. 

HCLT has rapidly expanded, doubling the number of homes in its Trust from 100 in 2021 to 200 today. Ashley attributes this growth largely to the early implementation of the HCP’s buyer-initiated model. Unlike many CLTs that focus on new builds, HCLT made an early shift to prioritize incorporating existing housing stock from across the city into the Trust, which accelerated its impact and expanded homeownership. 

The team at HCLT has plans in 2025 to expand housing options through the CLT model, including acquiring multi-family properties to provide low-cost rentals and help even more low- and middle-income families secure housing. They are also collaborating with the architecture schools of Prairie View A&M and Rice Universities to design smaller-footprint homes, such as tiny houses, to increase housing capacity in environmentally sustainable ways. Additionally, HCLT is exploring ways to assist existing homeowners in bringing their homes into the CLT, making it possible to renovate and rehabilitate properties without significantly increasing their values, which could consequently make the home unaffordable.

A group of students and staff at the Houston City Planning department
HCLT members, Prairie View A&M, and Rice University architecture students visit Houston’s City Planning department.

Recognizing the potential of CLTs to foster a more stable housing market, the Texas Legislature passed a bill in 2021 that expanded the types of organizations able to establish CLTs and adjusted the tax assessment rules statewide. These rules align with the methodology already used in Houston. As a result, CLT homes can now be assessed based on the subsidized purchase price and ground lease rather than the property’s market value. This change will lower taxes for CLT homeowners, making homeownership more affordable for more Texans in the long term. 

News of HCLT’s success in creating new avenues to homeownership has traveled to other cities across the US where communities face similar displacement challenges. Ashley has already collaborated with groups in Baltimore, Chicago, and New Orleans eager to learn how HCLT is innovating on the traditional CLT model. Even organizers in Rio de Janeiro, Brazil, have invited Ashley to explore how a CLT model could help combat displacement and protect residents in favelas. 

As Ashley shares HCLT’s insights with other communities, she remains deeply connected to her work with Houston residents, who have quickly become HCLT’s strongest advocates. “Several of our first homeowners have actively brought others into the program,” she says. “For example, one woman purchased a home through the program and then told her mother about it. Just two months later, her mother applied, and they now live just around the corner from each other, remaining among our best homeowners.” Many others have reached out with referrals, inquiring about when applications will reopen, eager to help others follow in their footsteps. 

HCLT offers compelling homeownership and housing options by not only expanding local perceptions of what is possible but also demonstrating that these possibilities can become reality in a meaningful and lasting way for limited-income households throughout Houston and beyond.


Valuing Homes in Black Communities

Homes in Black majority neighborhoods are undervalued by 23% on average compared to similar homes in other neighborhoods. Structural innovations that redesign our markets could create a more equitable housing market. To support new ideas, Economic Architecture and Brookings are mapping innovations across the US and will soon invite innovators to step forward and apply to the Valuing Homes in Black Communities Challenge.

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