MORE ABOUT THE STRATEGY USED IN THIS CASE STUDY Creating affordable housing
Results and accomplishments
Since June 2019, the Houston Community Land Trust (HCLT) has enabled over 60 families to purchase their own home
The HCLT maintains a median home purchase price nearly $150,000 lower than the citywide median purchase price ($330,000 as of November 2021)
The HCLT maintains a median monthly payment that is over $400 lower than the median rent in Houston. As of December 2021, the median monthly housing payment for HCLT families is $777, compared to a citywide median rent of $1,145.
- Largest municipal investment in a community land trust: The community land trust in Houston receives more city funding than any other community land trust in the nation. Given the scope of this funding, it is one of the most ambitiously funded community land trusts in the country. To date, the City of Houston has pledged over $60 million to the city’s community land trust.
- Provided stable, long-term housing to over 60 families so far: In its first year of operation, the HCLT supported 21 individuals and families, housing nearly 50 people total from June 2019 to June 2020. As of November 2021, the HCLT has enabled over 60 families to purchase their own home, with a goal of reaching 100 families by the Summer of 2022.
- Selected by national community land trust leader to join inaugural cohort: The HCLT was selected by Grounded Solutions Network, a nationally recognized leader in community land trusts, as a member of their inaugural Catalytic Land Cohort. As part of this cohort, the HCLT has received approximately $700,000 in technical capacity, strategic planning, and community engagement support.
- Between 2010 and 2020, Houston’s population increased by 9.8 percent, but growth in the housing stock did not keep pace. With increased competition for housing, rents and home values rose, and housing became increasingly unaffordable for residents. In neighborhoods close to downtown, like the historically Black Third Ward, higher costs led to the displacement of longtime residents.
In 2018, city and community leaders formed the Houston Community Land Trust (HCLT). The HCLT offers two pathways to affordable home ownership. The New Home Development Program (NHDP) assists residents in purchasing newly constructed homes, built largely on lots owned by the Houston Land Bank. Alternatively, the Homebuyers Choice Program (HCP) provides residents with subsidies of $100,000-150,000 to purchase a market-rate home. In both cases, the HCLT retains ownership of the land on which the home is built or purchased, ensuring the housing will remain affordable when it is re-sold.
Keys to the HCLT’s success include its focus on creating a user-friendly home buying experience, which has made it more attractive to eligible residents; leadership and funding from the City of Houston; and large-scale, well-timed land acquisitions by the Houston Land Bank, which provided HCLT with the resources to operate at scale.
Obstacles faced by HCLT include rising home values, which have made market-rate houses increasingly unaffordable even with the HCP subsidy; large land acquisitions by private developers, which have diminished the availability of affordable land for the land trust; and difficulty completing construction of NHDP homes on time and to sufficiently high standards.
What was the challenge?
- Rapid population growth brings rising home prices and rents: Between 2010 and 2020, Houston’s population grew by 9.8%. At over 2.3 million residents, this increase made Houston one of the fastest growing large cities in the United States. As the city grew, competition for existing housing increased, causing housing prices and rents to rise. By 2018, nearly 50 percent of Houston tenants were spending at least 30% of their income on rent.
- Increasing displacement of communities of color: During this period, housing prices grew particularly rapidly in Houston's Third Ward, a historically Black neighborhood adjacent to Houston's booming downtown, leading to gentrification and the displacement of many longtime Black residents.
- Increasing urgency for citywide housing affordability and stability strategy: As housing prices continued to rise and the pace of displacement accelerated, leaders in Houston were under increasing pressure to address housing affordability. While several community-based organizations and local non-profits were working to stem the tide of displacement, Houston lacked a coordinated, well-funded approach to increase housing stability for residents with low incomes.
What was the solution?
- A city-funded, independent community land trust: To ensure affordable, stable housing for Houston residents with low incomes, community and city leaders created the Houston Community Land Trust (HCLT).
- Two pathways to affordable home ownership: The HCLT helps Houston residents purchase affordable homes via one of two pathways. The New Home Development Program (NHDP), a collaboration between the HCLT, the City of Houston, and the Houston Land Bank, allows residents to purchase newly constructed homes. The City works with developers to build new homes on lots owned by the Land Bank, and the HCLT connects potential homebuyers to these homes and assists them through the home purchasing process. The second pathway, the Homebuyers Choice Program, grants eligible buyers a city-funded subsidy of $100,000-150,000 to go toward the purchase of a market rate home anywhere in the city.
- A proven approach to long-term housing affordability: In community land trusts across the country, ownership of the home is separated from ownership of the land the home stands upon. While buyers in community land trusts fully own their homes, the organization administering the trust (often a non-profit) retains ownership of the land, ensuring that when homes are re-sold, they will remain affordable. In Houston’s community land trust, the homes purchased via either the NHDP or the Homebuyer’s Choice Program are owned by their buyers, but the HCLT owns the land.
- Focus on neighborhoods and residents most vulnerable to gentrification: The HCLT serves residents with annual household incomes of less than 80% of Area Median Income (AMI). Many of the homes built for the NHDP are located in the predominantly Black Acres Homes neighborhood of Houston.
- Established and maintained primarily with city funding: The Houston HCDD is the primary funder of the HCLT, manages and subsidizes the construction of new homes in the NHDP, and provides the homebuyer subsidies that underlie the Homebuyer Choice Program.
What factors drove success?
- Creation of a user-friendly, streamlined homebuying process: The HCLT worked closely with city officials and community land trust experts to design a smooth and efficient home buying process. The experience for the homebuyer is simple, fast, and transparent, which helps build and maintain trust among residents.
- Prioritization, leadership, and funding from City Hall: Tom McCasland, then-Director of the Houston HCDD, was instrumental in advocating for and eventually bringing the community land trust model to Houston. The HCLT benefits from broad support across city leadership, including Mayor Sylvester Turner and Houston City Council, which has facilitated significant municipal funding. This has enabled the HCLT to focus exclusively on connecting residents with low incomes to affordable homes.
- Large-scale, well-timed land acquisition: The Houston Land Bank has been in operation since 1999, with targeted land acquisition in the Acres Homes neighborhood since 2005. By 2018, the Land Bank had over 549 properties in its inventory, 262 of which they pledged to the New Home Development Program. Though some NHDP homes are sold at market rate, access to so many potential properties has set the stage for the land trust to thrive at scale.
- Strong focus on community ownership and engagement: The HCLT prioritizes community ownership and deep engagement with residents, which helps build trust in the organization as a whole. The organization practices regular community outreach, and the Board of Directors is composed primarily of community leaders and members from the neighborhoods the HCLT aims to serve, including two HCLT homeowners.
- Flexibility for homebuyers: HCLT homebuyers have the option of either purchasing a newly-built, low-cost home from the New Home Development Program, or using a subsidy to purchase a market-rate home via the Homebuyer’s Choice Program. By offering multiple paths to homeownership, the HCLT makes the process more appealing to homebuyers, who can choose from a wider variety of homes than a standard community land trust would offer.
What were the major obstacles?
- Delayed development of new, high-quality, affordable homes: As part of the collaborative structure between the City of Houston, the Houston Land Bank, and the HCLT, Houston's Housing and Community Development Department is responsible for managing the development of affordable homes on Land Bank properties. The city and its development partners have struggled to ensure that new homes are built to sufficiently high standards, and that work by developers is completed on time.
- Rising home prices limit reach of Homebuyer Choice program: As home values have continued to rise throughout Houston, an increasing share of market-rate homes have become unaffordable to potential buyers, even with $100,000-150,000 off the market price via the city-funded subsidy.
- Diminishing citywide land availability: Throughout the COVID-19 pandemic, the Houston metro area has experienced a substantial increase in land acquisition as developers rush to purchase large swaths of land. As a result, land availability and affordability is decreasing throughout the city, making it more difficult for the community land trust to acquire land and develop new homes.
A report from the Shell Center for Sustainability at Rice University identifies Houston as a relatively unaffordable city, upending the popular narrative of Houston as a haven of affordability. When compared with large cities across the country, Houston ranks 26th in affordability, with 46% of median incomes going to housing combined with transportation costs. This ranking was lower than cities like Chicago, New York City, and Philadelphia.
After serving in the Texas House of Representatives for decades, Sylvester Turner narrowly wins the Houston mayoral election. Mayor Turner enters office placing a high priority on improving housing affordability. Soon after taking office, Mayor Turner selects Tom McCasland as Director of Houston’s Housing and Community Development Department (HCDD). Director McCasland comes to his role with experience at the Harris County Housing Authority and experience with the community land trust model.
Then-Director McCasland approaches Burlington Associates Consultant and community land trust expert Michael Brown at a conference to discuss developing a citywide land trust in Houston. In the following weeks, McCasland and Brown meet with Mayor Turner and key city officials about developing a city-sponsored land trust in Houston and begin developing a proposal.
In a presentation to the Houston City Council Housing Committee, then-Director McCasland presents a business plan developed in collaboration with Grounded Solutions Network and Burlington Associates. The plan outlines the structure of the proposed community land trust, including partnership with the Houston Land Bank (then LARA), a Mayor-appointed Board of Directors, eligibility criteria, and the HCLT’s role as steward of the properties rather than developer.
The City of Houston is hit by Harvey, a category 4 hurricane, causing extreme flooding across the city and $125 billion dollars worth of damage throughout the state. The following year, the City of Houston receives $1.2 billion in Community Development Block Grant (CDBG) Disaster Relief funding. Then-Director McCasland aims to use a portion of the CDBG funds to establish a citywide land trust.
The HCDD creates the new HCLT as an independent non-profit organization that is separate from the City of Houston. A planning committee, including representatives from HCDD, the Land Bank, the City of Houston, and community organizations, is formed to guide organizational development.
At the request of HCDD, the Houston City Council approves ordinances allocating $1 million in Tax Increment Reinvestment Zones (TIRZ) funding for the city to support HCLT administrative startup costs, in addition to $6 million CDBG funding and an additional $19 million TIRZ funding for the New Home Development Program.
The planning committee begins forming the HCLT’s Board of Directors, composed of local housing and community leaders including Board President and noted community activist Dr. Assata Richards. The Board hires Ashley Allen and Nina Culotta as the Executive Director and Director of Programs of the newly established HCLT, who begin work to develop a streamlined homebuying process.
With a consistent homebuying process established, the HCLT begins accepting applications from prospective homebuyers and starts holding monthly community outreach sessions at community centers, churches, and libraries for community members, including residents, realtors, and pastors. These meetings continue monthly until the COVID-19 pandemic began.
Months after launching their application, the HCLT closes on their first home with an approved buyer. A local elementary school teacher and mother of three is able to purchase her first home through the New Home Development program, and moves her family into their new Acres Homes house.
In recognition of their quick growth and success, the HCLT is selected as an inaugural member of Grounded Solutions Network’s Catalytic Land Cohort and begins to receive financial, technical, and strategic support to build their capacity and impact.
The HCLT dedicates $3 million to expand their offerings to include a Homebuyer Choice Program, which allows eligible buyers to select a market price home that they purchase with financial support from the HCLT in the form of a $100,000-$150,000 subsidy.
The HCLT determines that the homes being developed for the New Home Development Program (NHDP) do not meet quality standards, and suspends participating in the NHDP. The HCLT pivots to focus exclusively on the Homebuyer Choice Program while working with city partners to identify strategies to improve NHDP home quality.
How did leaders confront the problem?
- Housing affordability and displacement become increasingly urgent: Between 2000 and 2015, housing prices in Houston increased significantly, fueling gentrification and displacement. As displacement worsened, a number of local non-profits and community leaders became increasingly vocal about the need for bolder affordable housing strategies.
- New leadership arrives with focus on housing: Mayor Sylvester Turner, elected in 2015, began his term with a focus on housing affordability and neighborhood stability. Soon after taking office, he appointed Tom McCasland, former head of the Harris County Housing Authority, as the Director of the Houston Department of Housing and Development.
- Community engagement creates momentum around community land trust model: After extensive conversations with community leaders and non-profits, then-Director McCasland began advocating for the creation of a citywide community land trust. The Housing and Community Development Department (HCDD), working with Burlington Associates and Grounded Solutions Network, modeled the potential benefit of a large-scale community land trust and created a draft business plan, ultimately winning the support of Mayor Turner.
- City Council approves significant funding for community land trust: With support from Mayor Turner and a strong business plan, the Houston City Council voted in favor of the proposed HCLT, allocating $1 million in city funds to cover start-up costs for the organization.
How was the strategy designed?
- Creating an independent non-profit with city funding: To ensure the HCLT would not be affiliated with one particular administration (and thus be vulnerable to political dynamics and/or changes in leadership), the organization administering the land trust was created as a non-profit. The City would provide nearly all of the organization's funding but have little say in the HCLT's day-to-day operations and decision making.
- Land acquisition enabled by Houston Land Bank: To ensure ample land upon which to build affordable housing, HCDD partnered with the Houston Land Bank, which maintained a portfolio of over 500 properties, largely in the Acres Homes, Settegast, Trinity Gardens and Sunnyside neighborhoods of Houston.
- HCDD manages development process: To allow the HCLT to focus on generating demand and working with potential homebuyers, Houston leaders decided that HCDD would lead the contracting process with housing developers to build new, affordable homes. This also addressed concerns that the HCLT would siphon funding away from local non-profit developers, as these groups would be able to respond to RFPs for developing properties for the land trust.
- Eligibility and pricing guidelines set to maintain long-term affordability: Informed by conversations with community leaders and community land trust experts, the HCLT set eligibility to include households making 80 percent of the Area Median Income (AMI) or less. Newly-developed homes (built as part of the NHDP) are priced as low as possible so that they will remain affordable at resale rather than pricing out of affordability as housing prices rise.
How was the approach funded?
- City Council approves $1 million to start HCLT: With a clear business plan from HCDD (and their partners Burlington Associates and Grounded Solutions) and support from Mayor Turner, Houston City Council approved $1 million in start-up funds for the HCLT. This funding was used to cover initial staff hires and program outreach activities, among other capacity-building efforts.
- TIRZ revenues provide bulk of ongoing funds: To pay for the construction of affordable housing and to provide subsidies to individual homebuyers, Houston relies on revenues from their Tax Increment Reinvestment Zones (TIRZ), known as TIFs elsewhere in the country. As property values have increased substantially in many TIRZ-designated areas, this mechanism has provided significant, sustainable funding for the HCLT, with $19 million approved by City Council to date.
- Monthly fees help maintain HCLT operations: To ensure a consistent revenue stream to aid operations, the HCLT charges homeowners a monthly fee of $113, $50 of which goes toward the organization’s operating costs, with the remainder being used to cover property maintenance fees and taxes. To ensure affordability, this fee is factored into calculations of applicants’ debt-to-income ratio and included in all documentation outlining monthly payments.
- $6 million allocated to Homebuyer Choice Program: In addition to TIRZ funding, the city has invested $6 million from federal Community Development Block Grant Disaster Relief funding to finance subsidies for eligible families purchasing a home through the new Homebuyer Choice Program.
- Overall, City of Houston commits over $60 million to the HCLT: Between funding the New Home Development Program, providing subsidies for the Homebuyer Choice Program, and covering the operating costs of the HCLT, Houston leadership has committed a total of over $60 million to helping residents purchase homes as part of the land trust.
How was the plan implemented?
- Planning committee begins designing homeownership program: Once Houston City Council approved initial funding for the HCLT and the Land Bank had committed land for the Trust, a planning committee was formed composed of community leaders, representatives from HCDD, and the Houston Land Bank. The planning committee established organizational by-laws, developed a staffing plan and budget, and set the terms and conditions of the ground lease.
- Executive Director and Director of Programs hired: The planning committee, which eventually became the Board of Directors, hired Ashley Allen as Executive Director and Nina Culotta as Director of Programs. Once on board, Allen and Culotta began building relationships with community members and creating a streamlined home buying process for residents.
- City identifies and contracts with initial developers: The Housing and Community Development Department issues a Request for Proposals to identify housing developers for the New Home Development Program, eventually contracting with 12 developers across the city.
- Early community engagement: In Spring 2019, the HCLT team begins hosting community outreach events at local community centers, libraries, and churches. The team hosts separate events for prospective applicants, realtors, and other community leaders, like pastors. This multifaceted approach to outreach helps build an understanding of the community land trust model and creates trust between community members and the HCLT team.
- First home buyer moves into a home: In June 2019, the first HCLT home buyer, a local elementary school teacher and mother of three, closed on a home in the Acres Homes neighborhood. By the following June, the HCLT had supported 21 families through the closing process and into their new home.
How was the approach measured and refined?
- Introduction of Homebuyer Choice Program: As demand for HCLT homes gained momentum, it soon became apparent that HCDD and its development partners would not be able to build homes quickly enough to meet demand. To ensure that residents could be housed quickly, and to enable the HCLT to grow beyond already acquired land, the HCLT developed the Homebuyer Choice Program. The Homebuyer Choice Program enables eligible homebuyers to purchase a home available on the market and receive a $100-150,000 subsidy to go towards the purchase price. Like the NHDP model, the land under the purchased home is then owned by the HCLT, ensuring long-term affordability.
- Pivot to primarily focus on Homebuyer Choice Program: In Fall 2021, the HCLT determined that the quality of homes being developed through the New Home Development Program (NHDP) were not up to the HCLT’s standards, and exercised its independence from the city by pausing participation in the NHDP. The HCLT is currently helping potential homebuyers utilize the Homebuyer’s Choice Program subsidy to purchase homes available on the market as it coordinates with the City of Houston and the Houston Land Bank to identify new, high quality developers to contract with for the construction of new, affordable homes.
- Increasing staffing capacity as demand grows: As awareness around the HCLT has grown, the organization has received a large influx of applications. To maintain reasonable processing times, the HCLT has hired two additional intake coordinators, for a total of three coordinators, to manage the added demand.
- Measuring applicant information and participant outcomes: The HCLT uses the Homekeeper system to track information about applicants and outcomes, including prior zip codes of applicants, average monthly mortgage payments, and market rate home prices in addition to basic demographic information. This information helps the HCLT measure impact and strategically advocate to City Councilmembers in highly impacted districts for continued city funding.
Results for America would like to thank the following individuals for their help in completing this case study: Ashley Allen and Nina Culotta of the Houston Community Land Trust; Michael Brown of Burlington Associates; and Tom McCasland, formerly of the Houston Housing and Community Development Department.
This case study was written by Vicki Kidd and Ross Tilchin.