NBCLT

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NORTH BROOKLYN !

COMMUNITY LAND TRUST: !

A LONG TERM ANTIDISPLACEMENT STRATEGY FOR BUSHWICK AND SURROUNDING DISTRICTS! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

Brooklyn, NY, January 2, 2014.!

Developed by Gabriela Rendon, Renée Peperone, Brigette Blood, Matt Mottel, Jessica Perez, and Lisa Bloodgood!

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NORTH BROOKLYN COMMUNITY LAND TRUST: !

A LONG TERM ANTI-DISPLACEMENT STRATEGY FOR !

BUSHWICK AND SURROUNDING DISTRICTS!

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Housing Trends in Bushwick! !

Illegal rent increases are ending with the affordability of the district. Research on illegal rent increases and the loss of affordable housing in the city was recently undertaken by Make the Road New York (2011). In 200 randomly selected apartments across NYC, including Bushwick, the researchers found excessive rent increases with no explanation; landlords failing to register rents of their stabilized apartments; and evidence of inflated rents when vacancies occur (over the 20%), upon renewal, or after major repair work in the buildings. Rent overcharges have put tenants in difficult situations. In the worst cases, they don’t have any option but to move. The research uncovered many of the tenants difficulties in preventing eviction, such as tenants lack of knowledge on their rights and rent-regulations; language barriers when they want to interact with the authorities; inadequacy in DHCR’s complaint-driven enforcement process; and a long backlog of rent overcharge complaints stretching in some cases to over two years. !

In Bushwick, rental housing comprises about 87.5% of its occupied housing units. Out of this number a significant portion comprises rent regulated and subsidized units, although the numbers are declining. The portion of rent regulated apartments decreased from 58.8% in 1999 to 32.1% in 2011. Likewise the percentage of subsidized units declined in the same period, from 17.3% in 1999 to 6.2% in 2011 (Furman Center, 2001; 2011). This means that market-rate rental housing with less legal protections (the right to a lease renewal and anti-eviction protection) is increasing in Bushwick. The district is loosing its affordability with high housing prices. The median monthly rent in Bushwick in 1999 was $500 (NYCHVS, 1999). It increased to $1,176 in 2011 and continued climbing (Furman Center, 2011). According to recent rental market report average rents in Bushwick increase 13.5% since November 2012 from $1,849 to $2,099 (Real Impact Real Estate 2013). On the other hand, the price of owner occupied housing has rocketed in the last decade. The median sales price per unit (2-4 family building) in year 2000 was $119, 720 climbing to $173,031 in 2010 (Furman Center, 2011).!

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Foreclosures have become an epidemic, families are loosing their homes. From the 59,000 foreclosure processes initiated since 2006-2010 in NYC, over 1,600 occurred in Bushwick (Sanchis, 2010). Pre-foreclosure notices continue climbing today (Furman Center 2011). The economic crisis and predatory lending have resulted in the loss of properties to many families leaving behind vacant two and three-family homes. This has been evident in the south of Bushwick affecting mainly Hispanic families. Foreclosed properties are often transferred from banks to private developers to be sold for higher prices, in other cases they keep vacant for long periods out of the use of community members. !

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Property speculation and profit-driven development have become common practices in the district. Gentrification has been desired and expected by real state investors and developers due to the increasing housing value in adjacent districts, especially Williamsburg. On one hand, affordable multifamily buildings have been bought, renovated and put into the market for twice the price, sometimes through rent overcharges and the removal of rent controls. Low-income tenants have been pushed out and replaced by moderate-income households. On the other hand, rezoning processes have promoted the development of market rate apartments and commercial spaces with prices out of the reach of the local community. Private investment,

development and financing targeting middle-income households are replacing former subsidized housing developments targeting low-income households. The new dwellers have opened new housing markets typified by rent and sale price increments, real state speculation and change in local economies. Public policy, rezoning processes and tax abatements have helped in the process benefiting the wealthy at the expense of those in critical need.!

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Local grassroots groups and non profits are working diligently to improve the housing conditions, maintain housing affordability and guarantee the well being of its residents. Their endeavors — which include affordable housing provision and management, dissemination of tenants and housing rights, legislation enforcement, and legal advise in court procedures related with evictions— have slow down and even ceased aggressive profit-driven practices despite lacking major private investment and having scattered funding. Community development and housing renewal has been achieved in these areas through the effort of a cohort of residents, local groups and community based organizations that are invested in their neighborhood and therefore deserve to enjoy its stabilization rather than suffer from the byproduct of gentrification and foreclosure. However, residents and local groups are facing new challenges. Land and housing negotiations are not always with the local government and nonprofit organizations but with real estate developers and banks. Thus, new strategies and alliances must be formulated by and coordinated between local resistance and advocacy groups with the following aims: preserving and expanding low-income rental housing; protecting undeveloped land and vacant properties from market development and speculation through the formulation of new models of housing accessibility and ownership for those who are truly in need; and protecting and enforcing tenant rights.!

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Community Land Trusts: An equitable and inclusive model to develop and steward affordable living, working and learning spaces on behalf of the community.!

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Community Land Trusts (CLTs) are one of the most powerful and efficient instruments currently available to provide and preserve low-income housing for today's and future generations. The CLT model serves preserving community’s existing housing stock and developing new construction units needed to house people with the lowest incomes. This model serves to protect the community from both land speculators and the dislocating effects of gentrification.

CLTs assist in the creation of community relationships among long-time residents, local non-forprofit organizations and other stakeholders enabling them to become active partners in the revitalization of districts experiencing displacement. CLTs aids developing sustainable neighborhoods through an innovative housing approach deserving an increase public awareness and financial support!

The CLT is a local non-profit organization created to acquire land on behalf of the community and hold it in trust. The CLT provides 99-year renewable leases for exclusive use in accordance with the terms of the trust. The lessee is typically a non-profit housing corporation, a non-profit mutual housing association, or a non-profit limited-equity cooperative, closely related to the CLT, that rents to qualified tenants, or an individual owner whose ability to profit from equity gains is severely limited. A key feature of a CLT, and an important distinction between CLTs and traditional Community Development Corporations is the composition of the Board of Directors.

The board is composed by three kinds of directors with equal representation to balance the interests of the community stakeholders— residents (tenants or homeowners), community leaders and housing advocates (residents of the surrounding community who are not CLT leaseholders), and public representatives (local government and other local non-for-profit organizations). !

There are alternative ways to the classic model to create a CLT; as a CLT program of existing organization, as a CLT corporation established by existing non profit, and as a CLT corporation established by government (for more information see APPENDIX). !

Some of the multiple benefits of CLTs are:!

Protecting affordability through the provision of a unique and innovative model that guarantees permanent affordability for low-income residents.!

Preserving and protecting public investment allowing one subsidy to keep operating for a century or longer rather than the average 20-year span of most public subsidies. !

Strengthening the local community through the interdependency of CLT partners. Sharing assets, resources and expertise, as well as active participation is key in building communities.!

Providing flexibility to respond to different housing needs. CLTs are capable to lease to different housing non-profits and to provide different housing models such as cooperative housing, rental housing, owner-occupied housing, senior housing, etc.!

Keeping assets in the community by facilitating the transfer of private and public ownership to community ownership, sometimes at below-market rate. CLT can receive and manage donations of land and capital to purchase and develop land.!

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North Brooklyn Community Land Trust as an Anti-Displacement Strategy for Bushwick! !

Bushwick has key assets to generate a sustainable and socially responsible development.

Residents, local grassroots groups, and non-for-profits community organizations have been active providing affordable housing, protecting the community’s housing stock and enforcing tenants rights for decades. However, new strategies and alliances must take place since profit driven development is gaining territory while inducing displacement of local businesses and tenants, long-term residents as well as newcomers. Everyone is at risk of being pushed out today.!

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There are different tactics that can be envisioned, however one of the most efficient ones is acquiring land and properties for the benefit of the community, just has the real estate industry does it for profit. The Community Land Trust model is one of the instruments we can use targeting vacant, foreclosed, and city owned properties, as well as land that could be acquired from negotiations with landowners (creating partnerships) or with developers during rezoning processes (through donations). !

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The land donated to a local non-for-profit organization out of the negotiations of the Rheingold rezoning could be the catalyzer of a long term anti-displacement strategy for Bushwick and other neighboring districts of North Brooklyn. How could this be achieved? By creating both a North Brooklyn Community Land Trust (NBCLT) and a local action plan to reproduce this model providing permanent affordable living, working and community spaces in the district and its surrounding areas. The NBCLT will hold the seven lots in behalf of the community and strengthen relationships among local stakeholders through the formation of its governance structure. The long term local action plan will carrying on the following activities: (1) the creation of initiatives/workshops/tools to involve diverse community stakeholders in building a coalition to collectively plan for the future of the district; (2) participatory action research and analysis of the urban and housing conditions to generate an understanding of the development trends and potential areas of intervention in the district (including vacancies and future rezoning processes); (3) dissemination of the research process and auto diagnosis; (4) development of actionable strategies for the acquisition of properties in future rezoning processes or by alternative means, for the acquisition of funding and resources through potential partners, and

for development of alternative living, working and learning spaces taking into account the local needs and priorities; (5) legal acquisition of properties through the NBCLT; (6) building and establishing relationships with local non-for-profit organizations with expertise in housing rehabilitation and development, as well as access to public and private funding to develop the land; and (7) development of properties.!

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What are the next steps? The establishment of the NBCLT and the development of the local action plan must be done simultaneously to be prepared for future rezoning processes and potential negotiations with developers, property owners and the city.!

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Short term: Formation of a temporary “CLT committee� which will be in charge of developing a long term strategic plan to promote development without displacement in the district through the creation of a CLT. This committee would be comprised by community members, leaders of local nonprofit organizations and experts in the field of housing development, planning, law and CLTs. The CLT committee will be in charge of reaching out to potential partners and collaborators.

These partners must include residents, local grassroots groups, local non-profit organizations and other community stakeholders willing to share assets, knowledge and expertise. In addition, the CLT committee will look for public and private funding to both develop the strategic plan and to establish the NBCLT. Support from local governance will be needed (Community Board 4 and Council Member).!

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Medium term: Development of the long term strategy through participatory action research and creation of the NBCLT. Comprehensive research will be conducted with the collaboration of local residents, grassroots groups, non profits, members of the community board and other stakeholders involved in the development of the district. A number of sub-committees will be formed to carry on the research and to work on specific task forces and/or specific projects (e.i.

Rheingold Senior Housing Program). Some of the aims of the research include the following analysis: housing trends (e.i. shifts in ownership, prices, condition, tenant composition, etc); impact of previous and future rezonings; vacancies and property owners; socio-economic composition of the district; alternative models of housing already taking place in the district (e.i. co-housing); local needs, demands and priorities; local assets and capacities; building relationships with local residents, grassroots groups, housing associations,community development corporations, nonprofit organizations, etc; potential members of the governance body of the CLT (ei. CUFFH, MTRNY, BHIP, BEAN, NWB,etc); and potential partners for the development of the land (e.i. Los Sures, etc). !

Once the research has been conducted a long term action plan for the district will be drafted considering the community land trust model and other instruments promoting inclusive and sustainable development.!

During this period, elections will be organized for the first official Board of Directors of the NBCLT to incorporate the the trust as a non profit organization. The NBCLT will hold and manage the donated lots, future acquisitions of land, and potential funding for the purchase of local property.!

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Long term: The strategic plan must be flexible and adaptable to new struggles and demands of the community. The research will be an ongoing process since potential land and properties to be transfer to the NBCLT must be constantly identified and acquired through different negotiations. In addition, new partnerships must be established for the rehabilitation and development of the CLT’s properties. Special attention must be given to future rezonings, although there are alternative ways to get hold of local properties.!

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Incorporation of a Community Land Trust! !

“Not-for-profit corporations are controlled ultimately not by stockholders but by members. The membership may be large and open to any who wish to join, or it may be limited in various ways. Sometimes it is limited to just the members of the board of directors. Those nonprofits whose membership is not limited to the board of directors are commonly called “membership organizations.” The classic CLT model calls for a not-for-profit corporation structured as a membership organization, with membership open both to those who lease land from the CLT and to other members of the community” (National Community Land Trust Network, 2011). In establishing a CLT as a not-for-profit corporation with appropriate tax-exempt status, there are three basic steps: (1) Draft and file articles of incorporation; (2) Draft and adopt bylaws; (3) Prepare and submit application for federal tax-exemption (for more information see National Community Land Trust Network, 2011).!

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Incorporating a CLT/not-profit costs around $3,500.00. The price can increase depending on the complexity of the entity, plus the necessary filing fees with governmental agencies. Additional legal advice will be needed, the cost could be hourly, or it is also possible to get a flat fee structure to get assistance with the next steps. !

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APPENDIX !

(From National Community Land Trust Network 2011, Community Land Trust Technical Manual, Chapter 2: Initial Choices)!

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Who Should Control the CLT – Through What Corporate Structure! !

If there is any generally applicable answer to this question it is that those who control the! organizations should include both people who have a first-hand knowledge of the community’s needs (and are recognized by the community as having this knowledge) and people who have the technical knowledge and skills required to address those needs effectively. For a CLT program focused on addressing the multiple needs of a particular low-income neighborhood, the involvement of people who live in that neighborhood is a necessary priority – and the more of them who are involved the better. The kind of democratic, membership-based governance structure characterized by the “classic” CLT structure, described below, is strongly recommended for this type of situation. However, for a CLT that serves a larger area, with a focus primarily, if not exclusively, on expanding the area’s long-term supply of homeownership opportunities for low and moderate income people, other types of governance structure may be considered.!

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Classic CLT structure. The “classic” CLT model is designed to balance the interests of individual CLT homeowners/tenants with the interests of the community as a whole. It entails an independent, community-based membership corporation in which there is specific provision for two equally empowered membership categories – one category including all people who live on CLT-owned land, the other category open to all other people in the community who have an interest in the CLT’s efforts and want to support them. Each of these categories elects one third of the board of directors. The final third, the “public representatives,” may be elected by the total membership or by the board itself to represent the “broader public interest.” The bylaws of some

but not all classic CLTs specify that the public representatives (or a certain number of them) are to be public officials.! !

The rationale for this structure is based on the recognition that all CLT residents have a common interest in the organization that owns the land they live on and should therefore have a degree of control over that organization, but that, unlike such common interest organizations as co-ops and condominiums, CLTs are not limited to single properties that exist as “islands” in the larger community. The CLT’s land holdings are normally intermingled with other properties in the community and the number of holdings typically continues to grow – so that other individual property owners, and the community as a whole, are affected by the CLT’s actions and should have a right to become members of the organization and have a role in electing its board.! !

Especially for CLTs that wish to address a range of concerns in a low-income neighborhood or other relatively concentrated geographical community, the classic model provides a governance structure in which that full range of concerns can be expressed. The classic CLT is also likely to be recognized as “belonging to the community” in a way that a regional housing organization, for instance, often is not. This sort of community recognition may not be important if an organization is simply going to come into the community, build or rehab some homes, sell them, and leave. But, if an organization is going to have the multiple functions and long-term presence in the community that a CLT has, the community’s recognition and loyalty become very important indeed.! !

It must be recognized, however, that successful implementation of the classic governance structure requires some extra effort. The structure is likely to be relatively meaningless without an active outreach and organizing effort. Nonresident members must be recruited and encouraged to participate. All members must be encouraged to attend membership meetings, and the meetings must offer something meaningful to the members who do attend. All of these activities will obviously make demands on CLT personnel, which will in turn make demands on CLT resources. If CLT planners are not prepared – or are not able – to commit the resources needed to make the classic structure achieve what it is intended to achieve, then they should perhaps consider modifying that structure or opting for a different! approach.!

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CLT as program of existing organization. If an existing housing organization is developing or wants to develop affordable homes for owner-occupants and wants a mechanism to preserve the affordability of those homes from one owner-occupant to the next, it may simply create its own “community land trust program.” Such an arrangement obviously has the advantage that it can be launched quickly and relatively inexpensively. There will be no need to create a new corporation, no need to submit a new application for tax-exemption, no need to do all the things that must be done in getting a separate not-for-profit entity up and running. It can also be! argued that such a program, housed and staffed within an existing not-for-profit organization and sharing its costs with the organization’s other programs, will be the most cost-effective means of preserving the affordability of owner-occupied homes.! !

Nonetheless, even if the program’s only goal is to preserve the affordability of those homes – for 99 years and beyond – there are ways in which this type of program may eventually falter. The parent organization may be strong now and its current personnel may be strongly committed to the CLT program, but such organizations typically are not membership organizations; they are typically created with bylaws that give the board of directors a relatively free rein to take advantage of whatever community development opportunities present themselves, and that typically do not spell out long-term stewardship responsibilities (as classic CLT bylaws do). Within such a structure there can be no real assurance that future boards!

of directors will see the CLT program as a high priority. They may not staff it adequately. They may choose to put the organization’s resources elsewhere.! !

The disadvantages of this structure grow stronger if the program’s mission is intended to go beyond seeing that homes are resold to eligible buyers for duly restricted prices. If the stewardship mission includes working with homeowners to preserve the physical quality, as well as the affordability, of the homes (as it should), and if it includes seeing that the homeowners are able to manage their finances, avoid predatory lenders and retain secure ownership of their homes (as it also should), then the CLT program must have the resources and the commitment to engage with its homeowners on an ongoing basis. If the resources are allocated elsewhere and the commitment is not there, the program will have limited success at best.!

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CLT corporation established by existing nonprofit. An existing housing organization that takes the lead in creating a CLT program may decide that the CLT should be separately incorporated but may still want to retain some degree of control over it. Like the organization that creates a CLT program within its own corporate structure, it may be interested in the CLT primarily as a means of preserving the affordability of owner-occupied homes developed through its own efforts, but, unlike that organization, it may not want the direct responsibility of owning the land beneath those homes. It may be prepared to house and staff the CLT’s operation, and may want enough control over that operation so that it can coordinate the work of the CLT with its own housing development work. Given this interest in controlling the program, it will probably not want to establish a classic CLT structure – and perhaps not any governance structure in which a board of directors is elected by a broader membership.!

In this case, the CLT corporation may be created with a board of directors that is wholly or partially appointed by the “parent” organization. There may or may not be provision for a certain number of “lessee representatives” on the board, and such representatives may or may not be appointed by the parent board, but if the parent wants to be sure of controlling the CLT it will create a structure in which it can appoint at least a majority of the CLT’s board members. This arrangement may be an efficient way of preserving the affordability of owner-occupied homes, but it may not provide the most dependable basis for long-term stewardship – particularly for those stewardship functions that call for greater engagement with those homeowners over! time and that will therefore require greater staff support. In some cases however, the parent organization may itself be a membership organization with a broad base of membership in the community and with a board of directors elected by those members. It can be argued that there is no need to create a separate membership structure for a CLT created by such a membershipbased parent, and that to overlay one membership structure upon another in such a situation would tend to result in confusion and inefficiency. Nonetheless, if the parent organization is! a mover and shaker in the community, organizing residents to support this development project and oppose that project, and thus focused on making things happen in the here and now, it may not be the best base for a patient, long-term stewardship program. In any case, the parent’s membership structure is not likely to give CLT lessee-homeowners the kind of representation that a classic CLT does.!

Finally, we should emphasize that there are many different degrees of control that a parent organization may exert over a subsidiary. It is not simply a question of controlling or not controlling the new organization. The parent may, for instance, support the creation of a classic CLT structure in which it controls one or a few board seats – perhaps as designated “public representative” seats – but in which it does not control a majority of the board seats. It is also possible to establish a new CLT corporation with bylaws that provide for diminishing control of the board by a parent organization over time. Several “parents of CLTs” have in fact done this – with the number of board seats controlled by the parent reduced from year to year.!

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CLT corporation established by government. It has become increasingly common for local governments to take the lead in establishing CLTs. As with CLTs established through the initiative of existing nonprofit housing organizations, the degree of control exerted by the government entity varies greatly. Some local governments, while creating a CLT as a separate corporation, have retained full control of the organization, appointing most or all of the board members, and staffing and housing the program within its own offices, so that it is a direct extension of the government’s own program. Some government officials believe that if government is going to put public resources into a CLT program it should control the program to ensure that the resources are used responsibly and effectively. And from the CLT’s point of view, this kind of seamless relationship with a primary source of funding – both to subsidize homeownership units and to support the CLT’s operations – means that the program will not have to struggle from year to year to acquire the resources necessary for its work (unless the government’s priorities change).!

In other cases, local governments that have used their resources and powers to encourage the development of a CLT have wanted the CLT to be a fully independent organization. In their view, an independent nonprofit organization – more or less insulated from political motivation and buffered against the potentially destabilizing effects of electoral politics – is better positioned to carry out a CLT program consistently over an extended period of time, at least if there is reason to think that it can maintain a strong working relationship with its local government. !

In any case, as with relationships between CLTs and established housing organizations, there are trade-offs to be considered between immediate access to financial and technical support on the one hand and the kind of independence that makes it possible to chart its own long-term course, play an activist role in the community, and back up its long-term promises to its constituents.!

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References! !

Angotti T. (2007) Community Land Trust and Low-Income Multifamily Rental Housing.: The Case of Cooper Square, New York City. Cambridge: The Lincoln Institute of Land and Policy.!

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Furman Center for Real Estate and Urban Policy (2011). State of New York City’s Housing and Neighborhoods. New York City: New York University. Access online: http://furmancenter.org/ files/sotc/SOC2012_BK04.pdf!

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National Community Land Trust Network (2011) The CLT Technical Manual. Ed. by Kirby White.

Access online: http://www.cltnetwork.org/index.php?fuseaction=Blog.dspBlogPost&postID=1614!

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New York City Housing and Vacancy Survey (1999). New York City Housing and Vacancy Survey.!

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MRNY (2011) Rent Fraud: Illegal Rent Increases and the Loss of Affordable Housing in New York City Access on line: http://www.maketheroad.org/report.php?ID=1939!

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Real Impact Real Estate (2013) Brooklyn Rental Market Report. New York: Real Impact Real Estate. Access online: http://www.mns.com/brooklyn_rental_market_report!

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Sanchis, E. (2010). Stimulus Funds are not Enough to Fight Foreclosures in New York. Access online: http://news.feetintwoworlds.org/2010/02/10/stimulus-funds-are-not-enough-to-fightforeclosures-in-new-york/!

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Resources! !

Roots of the CLT. Burlington Associates. Access online: http://www.burlingtonassociates.com/#!/ home!

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Starting a CLT: Organizational and Operational Choices. Burlington Associates. Ed. Davis J.E. Access online: http://www.burlingtonassociates.com/clt-resources/starting-a-clt-organizationaland-operational-choices/!

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National Community Land Trust Network. Access online: http://cltnetwork.org! !

The Community Land Trust Reader. Lincoln Institute of Land and Policy. Ed. Davis J.E. Access online: http://www.lincolninst.edu/pubs/1766_The-Community-Land-Trust-Reader!

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