The Virginia Capitol at sunrise. (Ned Oliver/ Virginia Mercury)

By Lucas Kenley and Morgan Smith

The concept of the “American Dream” is that hard work will translate into financial success and a better life.

But for many Americans, especially those from long-marginalized communities, barriers to reaching financial stability and securing housing they can afford are still all too common. In response, local officials and housing advocates in Virginia and across the U.S. are experimenting with new forms of home ownership and finding one of the easiest paths to affordability may be to sell people homes but not the land underneath them.

From immigrant to home owner

As a kid, Jeisson Apolo immigrated with his family to the United States from Ecuador. With no savings or family wealth to fall back on, his mother worked three jobs to support her children and keep a roof over their heads. Despite these challenges, Apolo graduated from Cornell with degrees in architecture and urban planning and moved from New York to Richmond in search of a more affordable life. Even in Virginia’s lower cost capital, however, Apolo quickly realized the financial barriers to secure housing he faced in New York still existed in Richmond.

“As I started looking for homes, I realized that even in a medium-sized city like Richmond, it’s still so out of reach for me to afford one,” said Apolo. “A lot of the homes I went to look at either were beyond my ability to pay or they were within my budget but they were extreme fixer-uppers, so I would have to spend loads of money that I don’t have to make them actually liveable.” 

Through his housing search, however, he stumbled upon a home listed by the Maggie Walker Community Land Trust which allowed him to finally begin accumulating wealth as a homeowner. Because the land trust owns the land beneath the house, this allows a prospective buyer like Jeisson to purchase the home below market value. 

As policymakers and community advocates across the commonwealth work towards increasing access to affordable housing while keeping income and racial equity concerns at the forefront, community land trusts may very well be a viable solution to the housing sector’s most pressing problems. 

Mind the (wealth) gap 

Equity gaps between minorities and Whites are apparent by a number of measures. Currently, the median family income for both Hispanic and Black Virginians is about 30 percent lower than Virginia’s total median family income. This gap has remained fairly constant over the past 50 years despite periods of recessions and expansive economic growth.

The stagnation of this income gap has significant consequences for Hispanic and Black Virginians’ ability to afford housing. Nearly 29 percent of Hispanic renters and 28 percent of Black renters in the vommonwealth are severely cost burdened — meaning these individuals pay more than 50 percent of their income on housing — compared to less than 21 percent of Whites. An additional 29 percent of Hispanics and 26 percent of Black people are moderately cost burdened — meaning they pay 30 to 50 percent of their income on housing —  versus just 20 percent of White people. 

In a similar manner, income gaps contribute to growing differences in homeownership rates, particularly for Black Virginians. According to the Weldon Cooper Center for Public Service, “The homeownership rate was lower for Black Virginians in 2018 than in 2000 and lower in 2000 than in 1980. Since 1940, the homeownership rate for Black Virginians has risen by only 5 percent, compared to 20 percent for all other Virginians.” 

By this measure, equity gaps in the housing market are widening rather than closing or remaining constant, suggesting further interventions by the General Assembly and localities may be necessary to address the problem.  

The legislature’s role

In the General Assembly’s 2020 session, legislators began to address equity concerns in housing policy, albeit through significant changes to the Virginia Fair Housing Law. Roughly a dozen bills were presented this session with the goal of curbing discriminatory practices across the commonwealth. For example HB 3 added “discrimination on the basis of an individual’s sexual orientation or gender identity as an unlawful housing practice.” HB 6 added “discrimination on the basis of a person’s source of funds to the list of unlawful discriminatory housing practices.” 

“I think what you saw a lot of in the last session was Virginia clearing a backlog of bad laws and catching up to the rest of the country on a number of equity issues,” said Del. Sally Hudson, D-Charlottesville. “That was true in health care, in labor rights, and the discrimination work on housing was similar.” 

Additional 2020 legislation was introduced to address the affordable housing crisis, but failed to make it out of committee. This included inclusionary zoning which incentivizes or requires developers to set aside a percentage of housing units to be sold or rented at below-market prices and further development of accessory dwelling units which are independent living spaces on single-family zoned lots such as attics, flats and guest houses and must include standard living accommodations. 

Yet now that nondiscrimination laws have been codified, it is integral that further substantive changes are made to the housing sector to address income and racial inequities.  

“There is no way to talk about housing policy without social engineering,” Hudson said. “There is no sense in which there’s a laissez-faire, free-market way to just let housing naturally unravel because everybody is building on the foundation of a wildly regulated and highly unjust history that created the structures and neighborhoods that we have today.” 

An alternative model to address equity and create permanent affordability 

While the General Assembly has focused much of its attention on nondiscriminatory housing practices, localities are increasingly stepping up to the plate to answer residents’ calls for a focus on affordability. One model that has created permanent affordable housing while also addressing inequities is a community land trust.

To create permanent affordability, a community land trust (CLT) purchases the land underneath a housing unit and maintains ownership of it in perpetuity. The cost of the unit is therefore reduced as potential buyers only purchase the home and do not incur the additional costs of the land. Once homeowners sell, they earn a portion of the increased property value while the remainder is kept by the trust, preserving the affordability for future low- to moderate-income families. Estimates indicate that there are currently between 10,000 and 15,000 homeownership units and close to 20,000 rental units located upon CLT-held land across the U.S. 

The Maggie Walker Community Land Trust, located in Richmond, is one of two land trusts currently operating in Virginia along with the Thomas Jefferson Community Land Trust in Charlottesville. To address income and racial inequities in the housing market, MWCLT is deliberate in their selection of homebuyers and the communities they target. In particular, the household income limits of those eligible for each of their programs is 80 and 115 percent of area median income, respectively. Additionally, the number one goal stated in their 2020-2022 strategic plan is to address racial inequities in homeownership. 

“Because metropolitan Richmond lives in the shadows of segregated housing policy and because there’s a profound wealth gap between people of color and Whites, we have been very intentional about how we find our potential buyers,” said Laura Lafayette, the chair of the MWCLT and the CEO of the Richmond Association of Realtors. “Not only do we want to help people build wealth through homeownership, we want to make sure that that’s inclusive. Our first hire was a community engagement person and they’re going into the community and finding folks who have not had an opportunity for homeownership.” 

In 2019, the MWCLT acquired 17 properties, sold 14, and rehabilitated or constructed eight. Of these homeowners, 30 percent were non-white and the median household income was $41,000, 50 percent of Richmond’s area median income. The average selling price for their homes was $155,000, 30 percent lower than Richmond’s median housing price. 

Despite intentional outreach to minority and low-income communities, Lafayette acknowledges that challenges still exist with their model. “In historically African-American communities, there is a level of instinctive mistrust in the concept of owning a house and not owning the dirt under your house. And so we’ve had to go into communities and say, ‘look, this isn’t predatory. This is a stepping stone for folks who would not otherwise be able to own a home and who wish to.’” 

Those who have benefited from MWCLT know this to be true. “It’s such a great starting point for me to build wealth and to escape poverty,” said Apolo. For him, the land trust has been that stepping stone.

Lucas Kenley and Morgan Smith are graduate students at the University of Virginia’s Frank Batten School of Leadership and Public Policy.