A desire to create permanently affordable homes has motivated volunteers to form a new community land trust (CLT) in the Tri-Cities.

The 501(c)(3) nonprofit, Tres Rios, is looking for grants, board members, viable homes, donations and, eventually, potential homebuyers.

While Tres Rios is a relatively new organization, forming in 2021, the CLT concept is far from novel, having gotten its roots in the Civil Rights movement before expanding into urban areas.

To keep housing affordable, a CLT buys the land a house is on, granting a 99-year lease to homeowners, which guarantees a lower cost since buyers aren’t buying the whole package – just the house.

“It’s the only way to make sure housing stays affordable, really,” said Ginger Wireman, Tres Rios board chair. “There just doesn’t seem to be any other method, and this is proven and has been around for a while in Washington state.”

When a CLT homebuyer wants to relocate, and many eventually do, the house doesn’t go back onto the free market. Instead, it is sold to the trust using a restricted price. Individual CLTs set up formulas on how the buyer earns equity for their purchase that can be retained after releasing a home to the trust, though the equity doesn’t grow at the same rate as market forces.

Nationwide growth

Grounded Solutions Network, another 501(c)(3), completed a recent census on CLTs and shared equity entities across the U.S., noting 314 of these organizations exist in 46 states, Washington, D.C., and Puerto Rico, marking a 30% increase since 2011. The inventory includes more than 15,500 homes and nearly 20,000 rental units.

“There are more than 2,200 units in Washington now. Lopez Island has had a CLT since the early ’80s. They were the first in Washington because even back then they were already dealing with housing affordability because it’s a resort area.” Wireman said.

The Center for Community Land Trust Innovation, which tracks CLTs, lists more than 20 of these organizations in Washington state, including a half dozen east of the Cascades, but doesn’t yet include Tres Rios on its searchable map.

The Tri-Cities CLT has a board of about a dozen members and is actively looking for more, including those who can assist with grant writing and fundraising.

“I think there’s a fair amount of money out there,” Wireman said. “It’s a question of figuring out the grant cycles. Community Development Block Grant money can be spent on this and other state and federal funds. The state is investing a lot to support more affordable housing, we just need people with the time and the expertise to help fill out grant proposals.”

CLTs can receive private investments and donations, like Seattle’s CLT, Homestead, which recently announced a $10 million bequest from billionaire MacKenzie Scott, who was once married to Amazon founder Jeff Bezos. She also donated $12 million to Grounded Solutions Network to ensure lasting affordability of homes. Homestead plans to test out inclusionary housing using a multi-residence building, like condos or townhomes, selling some at market rate and keeping others permanently affordable.

Wireman noted how these one-time investments can create self-sustaining attainable homes, typically offered to those who make 60% to 80% of the average median income in the area.

Potential applicants likely make too much to qualify for assistance, but too little to realistically consider home ownership, especially after the surge in home prices over the last three years.

“We only want properties within a reasonable walk of a bus line because cars keep people in poverty. We want people who, in this ridiculous housing market, have no hope of getting a house. Your entry-level bank managers, dental hygienists, nursing assistants and people who have good jobs and would qualify for a mortgage, but there’s absolutely nothing in our market in good condition and meets their needs,” Wireman said.

Pool of potential buyers

Right now, Tres Rios doesn’t have an application system set up to start creating its pool of potential homebuyers and doesn’t have the funding to buy or build its first home, but it hopes to by the end of 2024.

“We would keep a pool, not a list, because a list implies next in line. But the first person on the list when a home becomes available may not qualify, or it might not be the right fit. We’re not going to put a three-person household into a one-bedroom house,” Wireman said.

Those who qualify would typically make about $74,000 for a household of four and could afford a monthly payment of about $1,500, equating to a home costing about $300,000. The Tri-Cities Association of Realtors lists the median and average sold prices for homes in the region as between $430,000 and $458,500 for August 2023, the most recent statistics available.

Tres Rios leaders hope to use the owner-initiative model and think $500,000 would get the nonprofit off the ground with a few properties.

“We buy a house on the regular market and put it in the trust at closing, which is what they’re doing in Houston and Portland. If people qualify for $244,000 but it’s a $350,000 house, we present the rest of the money. They’ll have to put a little bit toward closing because you want to show they’re able to do this, but you can find loans to help them at closing. Then at closing, you put it into the trust. So, it’s not like we would buy the house free and clear and then turn around and sell it again. I think for our first several properties, it’s likely we might do that model,” Wireman said.

An added benefit to the significant investment by the trust is aimed at eliminating the need for private mortgage insurance (PMI), which is often required to protect the lender if the buyer puts down less than 20% of the purchase price. By avoiding PMI, it helps ensure a reasonable monthly payment.

Older homes that come into the trust would be updated for energy efficiency to save money over the life of the home. Wireman said the nonprofit would also work with the assessor to create a fixed resale rate with taxes on the resale value, not the market value, for when a house comes back into the trust and is made available to a new applicant.

“When a home becomes available, that means you’d need to get your FICO score up, improve your credit-to-debt ratio and be able to qualify for a mortgage,” said Wireman, adding that fewer than 1% of CLT homes were foreclosed on during the mortgage crisis.

Tres Rios would expect to build new or buy established homes, hoping that, to start, some might consider willing their home to the trust at a discounted price or outright donation, even allowing them to live out their natural life in the home.

“When I think of all those government houses (in Richland), people bought them for a song,” Wireman said. “They had great jobs with no trouble paying the mortgage with just one person working. Wouldn’t you love to have a mechanism to ensure another family gets to raise their children and have good schools and the river nearby and a safe place to live, grow up and make memories like your family did? I think if we market it correctly, maybe with the help of a state attorney on our board, we might find people do give us houses.”

Volunteers needed

Besides an attorney, Tres Rios leaders are looking to grow and diversify the talents of the board to be most successful in acquiring properties.

Wireman said they’re looking for someone with financial acumen or an experienced fundraiser, and she welcomes retirees.

“We have a couple, and more retirees would be great. We don’t have a paid executive director, so you need board members ready to roll up their sleeves and learn this stuff. It’s such a brilliant model, and you hear the stories and see the projects going on in other cities and know that could happen here,” she said.

Go to: tresriosclt.org.