Episode 52: Community Land Trusts with Annette Kim

Shane Phillips 0:04
Hello, this is the UCLA Housing Voice podcast and I'm your host, Shane Phillips. This week we're joined by Annette Kim to talk about community land trusts as a strategy for maintaining long-term affordability. Unlike the types of subsidized housing we mostly see in the US, homes in CLTs don't revert back to market rate, at least ideally, we discussed why in more detail in the interview, but it really comes down to who owns the land. Community land Trust's don't solve every challenge associated with building affordable housing. But preventing public investments from expiring and having to be purchased all over again, is a really big benefit in and of itself. And there are others to discuss as well. Annette's case study is on a specific CLT built in Los Angeles. And one of her main Insights is the importance of deep and ongoing community engagement. It's something that makes particular sense when you're not just planning for the next 30 or 50 years, but the next 100 or more. By the way, if you happen to notice my voice is a bit off in the interview, and actually maybe a little bit right now. I had a cold at the time, but I'm pretty much better now. So thanks for your concern. The Housing Voice Podcast is a production of the UCLA Lewis Center for Regional Policy Studies with production support from Claudia Bustamante, Jason Sutedja, Divine Mutoni and Phoebe Bruce. Just a reminder, if you're an APA member with AICP certification, you can get credits just for listening to the show - pretty sweet deal. Now let's get to our conversation with Annette Kim

Annette Kim is Associate Professor at USC Sol Price School of Public Policy and director of the spatial analysis laboratory there. And she's joining us today to talk about community land trusts or CLTs with a specific project here in Los Angeles, serving as a case study. Annette, thanks for joining us, and welcome to the housing boys podcast.

Annette Kim 1:59
Oh, thanks for inviting me. Glad to be here.

Shane Phillips 2:02
And I got Mike Lens here today as a co-host. Hey, Mike.

Michael Lens 2:05
Hello, Shane. Hello, Annette. Great to be here. I'm super excited to talk more about this very important paper and housing intervention that I think a lot of people have a lot of interest in. So this would be cool.

Shane Phillips 2:17
Yeah, I definitely get a lot of questions about Community land trusts. So we'll start as we always do with a tour, Annette you said you wanted to talk about Ho Chi Minh City? Where would you like to take us, what are you going to show folks when they're visiting?

Annette Kim 2:30
It's more about how to be in the city, wherever you are. So a lot of tourists will be in kind of the French colonial heritage area, which is, you know, like they have the upper and the post office and boulevards and tree lined streets, but it's Vietnamese. So I really encourage people to be slow, and to go squat on a plastic stool on the sidewalk. There's tons of sidewalk cafes, and people are so open, and chatty. It just pulls me over every time even though I've been there going there for 25 years. So that's the way to do the city, and then also to go on the back of a moped. And now they're so good at marketing, they have tours where they'll have people take a group of you each person on the back of another moped, and you cruise the streets of Ho Chi Minh City, and you'll stop here for one kind of snack and then stop over there for another kind of snack. And it's about a way of being in the city, it's a different kind of public space life, and that's why I wrote a whole book about sidewalk life there. And now it's, you know, really caught on. It's on so many Netflix foodie shows and stuff but it's really...

Shane Phillips 3:45
Obama went there with Anthony Bourdain did, although that was Hanoi.

Annette Kim 3:49
Yeah, that was Hanoi, it was indoors but yeah, that was pretty great. Because people were in tears when they saw the President of the United States, you know, using chopsticks and eating with the people. Yeah, that was really cool.

Shane Phillips 4:03
What was the name of your book?

Annette Kim 4:05
It's called Sidewalk City: Remapping Public Space.

Shane Phillips 4:08
Great.

Annette Kim 4:08
It's a lot about street vendors and, and almost all my work has been International. I just being schooled on the US for the last like eight years, learning from people like Mike, so much going on, but there's a lot of crossover. You know, my first thing I did was actually UCLA graduates asking me to testify LA City Hall about legalizing street vending. So a lot of the same kinds of issues on global cities.

Shane Phillips 4:33
So the article that we are discussing today was published last year in CityScape with your co author Andrew Eisen Lor and it's titled 'Community land Trusts for Sustainably Affordable Rental Housing Redevelopment'. It centers on the lessons learned from the redevelopment of a 48-unit section eight funded affordable housing project, originally built in 1981, and with affordability requirements expiring in 2011 redeveloped into a community land trust project with 140 units that would remain affordable in perpetuity. We'll define what community land trusts are in just a bit. But for now, I'll just say that CLTs are being looked to as a way to preserve housing affordability for longer than most other affordability strategies, largely because of their focus on the land. They represent only a sliver of housing in expensive markets like Los Angeles, though, I would say maybe much fewer than 1000 units in our county of over 3 million homes. So there's still a lot to learn and do, but a lot to learn about how to build and manage them effectively and about their benefits and drawbacks compared to other affordable housing types. CLTs fall under the category of shared Equity affordable housing so we would also point listeners to our conversation on shared equity home ownership with William Chung and Kelvin Wong in Episode 41. I think the context of this case study redevelopment is really important and helps explain why many people are excited about community land trusts. As I mentioned, this project known as Roland Curtis Gardens was built in 1981, and its affordability covenant expired 30 years later. While these covenants or deed restrictions are active, units must be rented to households below a certain income threshold at below-market prices. Once the restrictions expire, the owners can increase rents to market rates, which might be double or triple the subsidized rate in a place like Los Angeles, because the market price of housing is so high relative to income. And in most places, this is really just an eviction by another name. Public agencies or nonprofits will often try to purchase these buildings or pay the owners to extend the affordability terms. And of course, sometimes nonprofits or public agencies own these units themselves, usually nonprofits. But that's of course, very costly and draws resources away from other projects that could be adding to your affordable housing stock. Annette, could you say more about the context around affordability, covenants or deed restrictions and their expiration? Why are they allowed to expire at all, and how does the community land trust model try to solve the problem of expiring affordability?

Annette Kim 7:16
Thanks, Shane. I think I was stunned to realize that there's so many affordable housing projects that had public subsidies that are just going to go market. To give the historical context in the 1980s, especially, you know, there's a big political movement to downsize default, the government, you know, stop building public housing, let's let the market do it. We just need to get the market going and will provide incentives for private housing developers to provide private affordable housing, and that's the policy we pursued. But we made them with expiration dates, we thought, "okay, we just subsidize them for this period, maybe 30 years, and then the market will take over, they'll see that it's viable". And that didn't happen. And so especially in places like LA where the market prices have risen so dramatically, we haven't been building enough housing so there's a shortage. But we've had a, you know, increasing populations, and there's not the commensurate income levels, there's a huge housing crisis - we all are aware of that. There's a huge incentive for these private developers to go market. It just makes a lot of sense. So to me, when I was looking into the case, I think the big takeaway is we've got to stop doing this, this isn't working, why are we throwing public money away; we will just have affordability for 30 years, and then all that investment is gone. So that's why something like CLT where the affordability is more sustainable in perpetuity, in theory, makes much more sense to me, if you're going to do all that investment, it's so hard to build affordable housing but if you're going to do it, you should keep it.

Shane Phillips 8:59
And I think some additional context here, the Low Income Housing Tax Credit, which is our main funding source for below market, affordable units in the country today, was created, I think, in 1986. And at that time, a lot of projects only had to be affordable for 15 years, it was a very short duration. And now the standard has kind of become 30. And some places like California are doing longer periods, it's 55 years here for pretty much everything. Some states have had or do have up to 99 year requirements so it varies a lot. But I think some places have caught on to this and local governments are also looking at extending these as well. Something I just thought of when you were talking though, was this idea that we need these expiring covenants to incentivize or bring the private market in. We're not really going to get into the details here on the site, I don't think, but it's almost the opposite, where we're finding that extend during the duration of these covenants, requiring units to be affordable for let's say 99 years, is in some ways more feasible for unsubsidized projects, mixed-income projects that are just having to provide a share of their units for low-income households but most of them are market rate and they're not receiving any subsidies. In some ways, they're better able to handle that, because they don't have to worry about how it fits with other public grant requirements, and all these other things that are associated with it. Los Angeles is dealing with this right now, where they're actually pushing toward mixed income projects having to be 99 year covenants, but kind of moving more slowly with the subsidized projects, the Low Income Housing Tax Credit developments. Anyway, just wanted to bring that up really quickly, and actually wrote a short policy brief about the argument for extending these covenant durations, generally here in Los Angeles and beyond.

Annette Kim 10:52
Well, definitely after, you know, we have these projects, we want them to last longer. So I think it's good to experiment with extending it. But I think going forward, what do we think's going to happen after 99 years? Well, there'll be more affordable housing, then I think it could get even worse, you know. So it's like, we might be having an even bigger problem, that's what's happened is the property appreciation has just been so huge. We're making an even bigger problem for later, right. And so you had asked, you know, what's the status these days, and LA City just updated their lists, they have an inventory of specific properties that are going to expire. There are four building covenants, and there's over 14,000 units that are going to expire, actually, some have already expired between 2021 and 2031. So that's 14,000 units that are at risk of just going market losing affordable units that have had all these subsidies. And meanwhile, our backlog, you know, they're estimating LA county needs over half a million more units. Right, so I think if we just keep delaying, when they come due, we want to keep them as long as possible, but going forward for new kinds of projects, I don't think we should have expirations.

Shane Phillips 12:07
Yeah, and I think the the role that Community Land Trusts play in that, and how they're kind of different from these other approaches, we will get to that because it's really important. Mike, we were talking offline or in our prep doc about the bigger picture here, because as a podcast, not just interested in Los Angeles, do you have some of the numbers on how many units are at risk of exploration nationally, over the next 10 years, 30 years, whatever amount of time?

Michael Lens 12:36
Yeah, I mean, if you look at the National Housing Preservation database, which is the best known source of data that I have, that I've seen, this is put out by a group called PARC and the National Low Income Housing Corporation. ParC stands for Public and Affordable housing Research Corporation, lots of acronyms and housing and housing data of course, looking at the next five years in the US, they estimate over 325,000 units that are publicly supported rental homes at risk of losing their subsidy. In the next 10 years. It's almost 785,000, next 15 years, almost 1.5 million. So these are big, big, big numbers, and it's not surprising that these numbers are so large when you factor in the kind of age of the Low Income Housing Tax Credit Program, which is what 35-37 years old right now, and as you noted at the outset, a lot of those units were initially 15-year covenants or 30-year covenants. So this is go time for a lot of efforts to really address this issue of expiring housing subsidies and preserving affordability for people who live in these units.

Shane Phillips 13:57
Yeah, and those numbers were also just so people kind of know, the denominator, that's out of about 5 million publicly supported housing units that exist in the country right now. So it's a very large share.

Michael Lens 14:07
Right, so we were talking, of course, about this issue of expiring affordability covenants. And one of the key things that CLTs solve is at least extending the duration of those affordability covenants. Maybe let's just start with what a community land trust is and does and then how does it do a better job than our existing housing subsidy programs at solving this exploration problem?

Annette Kim 14:37
Sure, yeah, so CLTs, there's a wide range, but the classic CLT is that there's sort of a community ownership of land, usually a trust will own the land. And originally these were used to preserve open space. You know, a committee might say we want to make sure this forest is here and so we're going to buy it and it's owned by the trust. What happened then was that people realized we could start using this for housing. So the community trust will own the land, but you can have individual ownership of housing units on the land. And so what that means is, is that you still privately owned the house, but there's a restriction on the deed. So it's written into the day that when you want to sell, there's some kind of often a formula in the lease about how much appreciation you could take out, when you sell. And, you know, maybe the trust wants the first option to repurchase, etc. So that's kind of the classic model started in Vermont and as it's grown, there's lots of variations. So going beyond ownership to rental properties, the trust can continue to kind of manage the housing units and rent out. But what's different is that there's this slowing down on the resale right, and that there is this mission-driven behind what that resale would entail. And so that you would limit just being like another market property by saying you want to, you can only take out so much appreciation, etc. And so for rental properties, it means it could be written in that we're gonna maintain renting to lower-income renters. So the other thing we know about CLTs is that it's also written into these leases that the trust can retain the right to cure defaults. So this helps forestall foreclosures. So that really bore true after the big crash in 2008. A lot of studies were done, and there is almost no foreclosures in CLT properties, because you have this other body stepping in to help the homeowners and to keep that property viable.

Shane Phillips 16:53
How does that work exactly? How are they allowed to put off foreclosure? It sounds like they have some extra kind of authority that the banks can't infringe upon, but like why would the bank loan to them under those circumstances,

Annette Kim 17:08
It's not so much authority, better relationships. So I could talk about the specific case of Dudley Street Neighborhood Initiative in Boston, which is really famous CLT case, they got a huge area by eminent domain. A lot of interesting story about that, but so they have a lot of CLT houses. The homeowners are private, and so they will have their own mortgages. But the trust gets noticed if they're starting to miss payments on their mortgage, and so then they will contact the homeowner see what's up, you know, if there's some, you know, someone's got an employer's or health issues, and they'll help work with that homeowner so that it doesn't go to default. And so those are their specific examples, it's just more notification and staying involved with the homeowner, you don't just sell and leave. They actually know all these people.

Shane Phillips 18:01
You're referring to the trust here as an entity, who is that trust? Who is a member of it, who manages it, like, what is the relationship between the residents and the trust itself, and whoever is running it?

Annette Kim 18:16
I'll talk about the Roland Kurtis Gardens example, which is Trust South LA. And they are a neighborhood organization and their board members, you know, I think what's really great about them is how intentionally they organize themselves really to have true participation and to work towards justice. And so they design things such as their board members are half residents, and the other half might be professionals who have knowledge that can be helpful, like finance people, or lawyers, etc. But that's kind of unusual to have so many residents be board members, and they actively recruit and, and train them to be there. They also have all meetings, bilingual for language justice, so they could really speak up. And then also there's a lot of learning together process. So like in this case, they went through a process of first asset mapping their neighborhood, understanding their position, who are their neighbors, who are other other parties who might be involved in what happens to their property, learning together so that they're equipped with later to campaign for approval for the project. And then another thing is the financing discussions and learning sessions for them to realize the trade-offs that they need to make in the design of their property that could facilitate true participation. And I think you're surprised that they were willing to have less parking and denser units and that was a result of that process for them really understanding what would be the implications if they didn't do that.

Shane Phillips 19:51
So community land trusts are actually much more common in affordable cities than expensive ones, in part because they are often used to address vacancies, and blight. And of course, the cost of acquiring land is much cheaper in places that have a lot of vacancy and blight. So of course, you can do more with how much money you have to spend. How do the goals and obstacles for CLTs differ for places with high prices and high demand compared to those where housing prices are much lower and much more affordable?

Annette Kim 20:22
Right, yeah, so you realize that CLT need a niche kind of situation where both they're needed, but they can be feasible. So what that means is, there has to be a need for either the open land or the affordable housing so there's not enough, you know, housing developers doing that, or there isn't that ecosystem? But they still need, you know, an ecosystem of potential funders, or can they get access to grants so that they could do their project. A big one is the price of land - are there available, developable sites that aren't too expensive, but they are expensive because that's why they're needed. So it's this kind of in-between situation where CLTs could really be the right tool. And so you'd be looking for, in this case, we're talking about urban situations, places where there might be increasing prices so there's a need for affordability, there has to be enough available land that they could buy. And that's really the key problem here in LA. Another one is the approval process. But I think the land price is a really huge one, and this project was extremely expensive because of that. And that's why people question the scalability but that's also why it's so needed in LA. So if you're in a place where there's a lot of other affordable housing projects going on, it might not be so needed, right? And there could be places where it's just way too expensive so you can't do CLT. And there's other places where it might be very cheap, but we don't really need it, you know? So it's finding that right situation.

Michael Lens 22:06
So that sounds like there's a there's a Goldilocks principle here, which maybe that's the next paper title for a CLT paper. But there's a gold Goldilocks principle at work here, and LA probably fails the Goldilocks test, because it's not just right, necessarily, on the land cost side, right? Where the likelihood that you're going to have enough money to buy land, at least where we're at with current land prices in Los Angeles is just really low. But maybe we just need really, really rich people to throw money in the CLT coffers, I'm not sure.

Annette Kim 22:49
Well, that's part of it. I mean, I think that's true for anything in LA, right? There's no affordable housing solution that's easy here. So I think CLTs are one of many ways we'll need but the core problem it can't solve is this land price problem, land that's well-sited so you can have access to jobs and things, it's already developed, it's already really expensive. And so yeah, I think either we need new sources for acquisition, would that be public money role or a private money role but I also think, you know, we have, for example, publicly owned properties that could be used. But in those cases, what I see is huge political obstacles of doing that, you know, partly nimbyism, we don't want public affordable housing, or just affordable housing in general near us. And so I think we need to override some of that opposition, because it's really at crisis levels now. So I mean, I think in places like LA, you really need to do infill and redevelopment. And so there are still sites that could be possible, but then the problem is getting it approved. So there also needs to be a commensurate kind of social reconstruction process of realizing the importance of having affordable housing as part of our landscape, and that it's not something you'd be fearful about that won't kill your neighboring property values, etc. And I think that's the part we haven't done yet. We've raised a lot of money through bond measures, but we don't want to put them anywhere - measure HHH right. So I think that's another backlog is not just the land itself, it's challenging, but it's also the process of getting it approved.

Shane Phillips 24:37
Yeah, and I do think it's, you know, I just want to clarify here that in places that have a lot of vacancy, maybe depopulating city, the goal of these community land trusts is not even necessarily to build affordable housing on these parcels. It's just to buy land and sometimes just to demolish what's there, to clean it up, to prevent squatting and people damaging the property, it's almost the opposite purpose where the goal in these places is to actually stabilize and increase land and property values whereas in places like Los Angeles, it's not to lower the values of nearby properties, but it is to at least keep the property that you've acquired from getting more and more out of reach.

Michael Lens 25:22
Right

Annette Kim 25:23
And the overcrowding that results from just using what stock we already have right, so that's the other kind of hidden housing problem here in LA, is the mass overcrowding within our low-density forums

Shane Phillips 25:38
Yeah, this is a old stat, maybe seven or eight or 10 years old. But I remember an LA Times article from that era where they found that something like 50% of the 100, most overcrowded census tracts in the country, were in LA and Orange Counties. It's just a huge problem here and not really appreciated when we talk about like, "oh, there's plenty of housing" when a lot of people are having to crowd into what we have. And if we had more, they would happily spread out a little bit and not you know, have four people living in a bedroom.

Annette Kim 26:11
I also wanted to clarify that for the CLT's in shrinking cities, I don't think their goal is to demolish stock, so there won't be squatting. I think they are usually trying to redevelop so that there will be more people moving in. I think those demolition ones are usually done whereby the city governments to prevent dilapidation, but I don't think the trusts are working on demolishing, okay,

Michael Lens 26:37
You're talking particularly in areas where there's high vacancy?

Annette Kim 26:40
Yeah, like Baltimore.

Michael Lens 26:41
Yeah, right.

Shane Phillips 26:43
So what else should we know about the Rolling Curtis Gardens project, the fact that it's a redevelopment rather than an acquisition or rehabilitation of an existing building sounds like it's a bit unusual, maybe for community land trusts. And it being a rental rather than ownership housing seems important too, how different is the community land trust model for rental versus owner-occupied housing?

Annette Kim 27:08
This being a rental property is significant too amongst CLTs, usually, they've been ownership. But it's really appropriate for LA where the majority of people are renters, we need more rental housing. And so this is where a board and trust are still involved in the project, it's not they develop and sell it. What's really remarkable about the community engagement process is also how involved the residents were with the design of the project. So part of that learning engagement and that financial trade off, they realized that they needed higher density and versus they, you know, like most people don't want high density, but then they came to really embrace, we can get more affordable housing units, and that will help our rent be lower right, so that made a lot of sense. They actually impacted the design, the developers didn't come in with a pre made design, but they really worked in a participatory design process, it's now become a model that could download their engagement process that residents change that, you know, right on the street facing part, they didn't want houses, they wanted to have some offset for noise, and I don't know busyness, because the Expo Line is right there. So they made the street facing on exposition be commercial. And it's now like a community clinic and a food source. And so they changed and put all the residents in the back, and then they created a big community space, and they were really creative in that commercial properties' parking space, could on the weekends be used for community space as well. And they have gardens and they have playgrounds. They have passive air cooling, it's designed so well that, you know, when we did the visit with the architects and trust, it was just really incredible what they had created. It's a really desirable place that people would want to live. And so that's why there's this huge line down the road to get in there.

Shane Phillips 29:08
Digging in on the rental housing structure here a little bit more. community land trusts, I think are often supported on the basis of being able to maintain affordability for sure, but also allow residents to build equity as homeowners. Did this project get any pushback as a rental building that wouldn't offer those same wealth building opportunities?

Annette Kim 29:30
In this case, I didn't hear of any such protests, because I think so many people in LA are renters. And this was a rental property so there was an expectation that they would be homeowners. But in most CLT cases, that has been a big issue that even though you've told the people who bought the CLT properties, and they signed contracts and they saw the deed, they didn't fully appreciate that they were not getting the capitalization. When they came to sound they felt they got a bad deal. They didn't realize they were not going to be Part of the American dream and, and start having wealth building and that CLTs are not really built for that.

Shane Phillips 30:08
Yeah, and of course, I think there's there is still the benefit of like, you're not spending 50% of your income or more on rent, like there's a lot that you can do because of that, that actually can contribute to wealth building through other channels too. But I do think you know, that that distinction is important. So an important part of this project was its rate of return provisions, which gave tenants of the old building preferential access to move into or priority to move into the new ones when they were completed. And at the same below market rents as other residents, 25 out of the original 48 households decided to move back, which, based on my limited knowledge is a phenomenally high takeup rate for this kind of program, just over 50%. Browsing through some earlier research, Comey had a 2007 study, which found an average return rate of 5% across four Hope Six public housing redevelopments, Brian and his co-authors observed a 14% return rate to Hope Six revitalization projects, and in a study of Chicago public housing residents, Joseph and Cheskin found a return rate of around 11%. What are some of the barriers to people actually taking advantage of right-of-return programs, and do you have any insights or intuitions about why they were so successful in this case?

Annette Kim 31:24
I think one of the takeaways from looking at this case was if you want to read development, and you're really doing it for housing justice, they really wanted the right-to-return policy. So when you're redeveloping everyone has to get off, but those people need housing. And that was a huge challenge for this project, right? Because, yes, they have section eight vouchers, but no one wants to rent to them, it's so hard to find the units. And so they had to be heavily, heavily involved, and it got really contentious. And some of the residents even started suing them. But they had to work through that process. And they're so actively engaged and going out with them in the mornings looking for hosuing, you know, it was at that level, and then using all their partner networks to find one unit here that match this person, one unit there, they really came down to the wire of when they needed to move out. But that's why this housing is so needed, it's not available in the private market; it's so difficult to find. And so I think really this partnership between Trust South LA, and then Abode communities, which is a professional, affordable housing developer that has developed like 50 properties around LA, it was bringing those two organizations with their different expertise together, is one of the takeaways is that it's not just about the development process, which is very challenging, and Abode had all the expertise and knowing how to do that. But then how to work with the residents is really more the domain of trust, and they're kind of like housing activist type, they're really in the neighborhood so they know all the people and to keep building the relationships. They're the ones who are recruiting for the board, for example. So when it came, the construction took a couple of years, and they stayed in touch with these people, even though they're in different parts of LA, and know what the situation's of the families were and knew how to contact them when it's ready. So they get you know, first right, there's a huge line to for the lottery for Roland Curtis Gardens when it opened, and so they get a first right, so they need to contact these people first. And I was just amazed and talking with some of the staff members, they will say by name, oh, this person this happened. So they rather stay where they are this family, they definitely want to come back. It was that level of engagement through the course of the years. And so I think if we want this to happen more, you really need that kind of stable Land Trust organization who's really committed to make it work, and to get through the hard times of trying to find temporary housing for each of the people and then to know how to contact them to come back.

Michael Lens 34:10
Yeah, and I want to really highlight that engagement process, right, because we've talked about the challenges of land acquisition, in terms of the feasibility, but, you know, also this case management process in where you're really trying to holistically address the housing needs and challenges of the target population. I mean, first identifying a target population, but then serving them in the best way possible, in this case, at least, seem to entail some pretty heroic labor and knowledge on the part of the trust South LA and Abode kind of duo of of organizations that did the work. On the one hand I'm like, "wow, it's amazing that we did this and I'm very thankful for their work". On the other hand, I'm like, Is this is this like a necessary step towards making the CLT model work, and like, how do we have these expectations, right? That, you know, to me like they're doing the work that a social service agency or you know, a public agency should be doing maybe is what I'm thinking but yeah, it just seems great, but challenging,

Shane Phillips 35:33
Like if every project has to have this level of people's time and investment and personal connection to move forward, like, how can we scale it up or replicate it?

Annette Kim 35:45
Yeah, I think it's true. I've looked at CLTs around the world, and they all involve this kind of huge investment in relationship. And because, yeah, I was amazed when I was talking to the Trust staff, they're really trying to tailor each relocation, like this person has this kid in school so they need to be in this neighborhood, and this person is disabled, and so they need this kind of unit, really fitting it to make it work right? So yeah, it takes really detailed knowledge about the people. And it's, you know, Abode did their usual thing, which is to hire a relocation consultant, but they couldn't do that work to this kind of level right? So it's this commitment that this organization has been in the neighborhood, they've been working on different things together. And I can see, you know, is this too much to expect from every project going forward? But I think it's the only way to really do the relocation, right, and instead of just sending people off saying, "go look for housing, in the market, with your voucher", all their tales about what they had to go through the discrimination that they went through, you know, the different reactions they got if they called versus went etcetera, and shows you the reality that people are facing, right, and that it takes a lot of work together to get through it. And I think when we keep talking about, you know, is this scalable, I think, because us coming from public policy, we want to find some solutions that we set into the system, and it comes out with a different result right? And some of these things, those are important, too but some of these cases, it really takes that relationship with a specific organization and the specific people to actually make it happen. I mean, there's the incredible case in Puerto Rico with after Hurricane Maria, very successful CLT but they did 700 community meetings right.

Michael Lens 37:49
Woooh

Annette Kim 37:50
I know. That's insane.

Shane Phillips 37:55
I don't know if I can endorse that, that seems... I don't want to go more, man.

Annette Kim 38:02
I know I don't either but this is really desperate people who've continually have gotten flooded, and you're talking about thousands of people so that's the reality. And for them to trust you to actually move, yeah, that's the extreme case. But I think what all these trust examples, you know, there's another one in Kenya, where it's solving the traditional land rights problem, collective action problem in the face of markets, is that they're doing this endeavor together. And so it takes this relationship investment, but that's what you get, you get something that lasts, that really works, that fits people right, and so that's what it's gonna take.

Michael Lens 38:46
Yeah, if you want a 99-year covenant, you might as well do it right on the front end.

Shane Phillips 38:52
Right. 99 year or permanent, yeah, no expiration at all.

Michael Lens 38:56
Yeah, yeah.

Shane Phillips 38:57
And maybe it is just worth saying quickly here, because I intended to make this point earlier, just that with a kind of traditional, let's say, Low Income Housing Tax Credit project. There are kind of contractual rules. In many states, maybe pretty much all states where you actually cannot have an affordability covenant, or really any contract that lasts more than 99 years. But if you own the land, it becomes irrelevant, because you can own land forever. And so there's just a qualitative difference there. So we've talked about scalability in different ways, and replicability. And we're gonna keep doing that here. I think, partly because, as you note CLTs are still very rare in the US. And what we haven't talked about really yet is just the cost. This is something that we observe across all kinds of subsidized development, which is high per unit costs and limited subsidies. Even just acquiring the Rolling Curtis property required assembling five different public and private funding sources, and funding for construction itself came from eight or more different sources across technically three legally separate projects, I think, at cost of over $500,000 per unit today, every billion dollars we're spending on homes like this only gets us around 2000 units, which in LA County is about 0.06% of the housing stock. I mean, even getting to 10% would cost upwards of $170 billion. As much as I want to see more funding for affordable housing development, it does seem clear that public subsidies can only get us some of the way toward meeting the kind of scale of need in LA and elsewhere. Again, this is not a problem that's at all unique to community land trusts, and a huge benefit of them is you don't have to keep reinvesting in the land every 30 or 55 years or whatever, to keep the units affordable. But how do you think about CLTs in this broader context, and how big role can or will they be able to play with the right institutional and maybe also kind of community and social supports in place?

Annette Kim 41:02
Yeah, after all this work and writing this case, you know, just talking with the Executive Director of Trust at the time, Sanam Emil, and we just remarking "It's crazy, this is what it takes to build affordable housing in LA." I mean, that $500,000 per unit cost is just the average for LA, you know, it's just expensive to build here. So I think, after writing this case carefully, and thinking about " I was just like, shoot, we're screwed - the whole system", you know, I do think CLTs are promising important because of that sustainability, like, if we're gonna do something, at least, let's keep it. But what you're dealing with is a huge whole structural issue, right, and I think, in the case of LA especially, it's how do we get access to land to do these things - that's the biggest part of the project costs, trying to take it off the private market. I mean, that's the system we've set up, we're saying, we're going to do it all through the market. Well, the market is very expensive now, and there are people who can't buy from the market. And if we're going to take properties, by buying it, it's going to be hugely expensive, and that's the system. So we have to think of new ways of getting sites. That's why I'm saying I think we should think more creatively about what we do with publicly owned land, where we don't have to buy it, and really create the social movement around supporting those actually becoming projects instead of stopping them, then that that's a beautiful thing. It's a good thing that we want, because it's so much better than homelessness. And we seeing the urban environment, like what is the ideal? So it's a huge system change that we need, and yes, so CLT is this is took so much just to do this one project, you know, and it just shows this is what our system is like - what you have to do. And so going forward, it's this is not the only solution, and it's just one of the ways and I think the most valuable insight is we've got to stop putting money in projects that are going to expire, you know, why are we doing that? We thought that the market would take over, but it doesn't, it's actually gets harder and harder. So I think we need to think about the sustainability from the offset, and stop doing the way we're doing things. We we have some already invested. So we want to keep those and renew those as much as we can. But going forward, that doesn't see a smart way to invest our public monies.

Shane Phillips 43:35
Yeah, and I think, to push on this a little bit, I do think that and you can agree or disagree that we often talk about these things as though, "wow, it's so hard to build affordable housing", and that's it. But in fact, it's hard to build anything, any kind of housing, and I think we do ourselves a disservice by not recognizing the relationship between how difficult it is to build housing of any kind, market rate or subsidized, and subsidized housing, affordable housing in particular. I think just as a general rule, there's going to be a very strong correlation between how easy it is to build market housing, let's just call it versus non-market or subsidized housing, and, again, I think we when we focus solely on like, how can we make it easier to build affordable housing in particular, sometimes that is the appropriate thing to do. And they have special barriers that we need to address. But also, I just think there's a need to do something a lot, a lot more broad and just make it easier to build housing of all kinds. But I do also want to underscore what you said about CLT, and kind of the sustainability. And, you know, I think if we look 10 years down the road, we're not necessarily going to see a huge difference in our market - maybe we'll have 1000s more CLT units, but again, LA County has 3.3 million homes and it's not going to be a huge share of housing stock. But because the ownership is permanent, looking 50 years, 100 years down the road, 200 years down the road, you know, cities are supposed to last pretty much forever, we really do need to be thinking about that scale, even as we do take more immediate actions to try to address people's needs now. I think CLTs are a great way to kind of plan for the future in a better way.

Annette Kim 45:24
Yeah, and I agree with you, and your first point, I am one of those people who do you think we need to increase supply across the board, that's why we got into this crisis. But I'm also attune to those that worry that all the new construction will just go to the high end. So it's hard to build, yes, period, all levels but I'm more interested also in how are we going to make affordable units, and I think what this case shows is, it's such a small drop, yes, in a big ocean. But let's also expand the timeframe, like you say, you know, what's going to last 100 years from now 200 years from now.

Michael Lens 46:03
So following up on some of this, given the promise of CLTs in the need for affordable housing well outweighs its current role in producing housing. You know, we clearly need to change policy to expand the reach of land trusts and make them more feasible. In the paper, you mentioned legislation here in California, which I think was Senate Bill 1056 that exempted CLTs, from property taxes, and just now you were talking a little bit about public land, and I know, there's something called the California Surplus Land Act that can possibly make it easier for Land Trusts and other affordable housing developers to get to the front of the line in acquiring this land. Do you know of any recent legislative efforts that have been successful and at least providing more of a framework of possibility for CLTs, or do you have some ideas on other policy interventions that could make this production more possible?

Annette Kim 47:07
I don't know, the latest Senate bills going on right now. But yeah, I think that there are a lot of little lessons learned, policies change that happened because of this project, like they got the parking exemption now it's standar, property valuation to get lending, you know, the new Expo Line was going to start, but it hadn't, so that they could only get a property, you know, financing for a smaller amount than they knew what it was going to be those kinds of things. But when you still add it all up, those are little parts of the whole project; the big one is really the land. And so I think that's what it's come down to, for me is the property rights of land in cities is the key backlog issue and for us to reconstruct that. So, you know, I've been seeing little examples; where I'm in Santa Monica, they're knocking down parking garages and making affordable housing out of them right?

That's the dream.

Especially for UCLA!

Michael Lens 48:08
Yeah, shout out Donald Shoup

Annette Kim 48:14
Exactly, so we need to rethink because it seems like here in LA parking trumps everything. We can't do that, because there'll be traffic and parking issues so we need to rethink that. But meanwhile, we had the Bergamo expo line here, and they stopped any housing from being built right - it's sort of crazy, it's all parking lots. We need to rethink. I think infill spaces, especially public owned, that kind of like, you know, how the state overred cities about at ADUs, I think we need something like that, where like you have we have the right to build public housing, we're in a crisis. And we have this is our land for the public, right?

Michael Lens 48:55
Yeah, state preemption. I'm all for it.

Shane Phillips 48:57
Yes, we are. We are pro state preemption on this podcast. So for our last question, have you had a chance to follow up with any of the Roland Curtis Gardens residents or the folks involved in the project since writing this article? How are things going in the community?

Annette Kim 49:15
Oh, I think it's going great. I mean, it's full occupancy. It's a beautiful space, it's actively use. They have a lot of diverse residents there, and they're right there at the Expo Line station, all that many so I think they've created something really wonderful. And I should have told you, you know, I took my class there to visit and then we walked around the neighborhood. And you see their houses around there, huge code violations, like landings that are going to fall off and they've created this oasis there and that it's affordable, you know, is really wonderful. They're still in touch with the residents but going forward, you know, is such a huge amount of energy. And so now they have another project they're considering getting involved with, it's Lawson and Welm, I'm not sure what the status of that is. And then another approach is to do what they're calling mosaic; instead of trying to do these big, you know, multifamily projects, they have neighborhood residents who are contacting them saying I want to sell my property to you, because I want to keep it in through the neighborhood. And so doing rehab of a big house, that might be two or three units for that, there'll be a lot of transaction costs for each project. So you know, I think they've also gone into so many directions, Sanam Emil is now no longer Executive Director. But she's been really heading up efforts to do transit-related justice, with housing and topia movements in the county, etc. So they're still very actively involved, and I think Abode is proud of this project as well, is unusual for them to collaborate like this. Another example of community engagement and what it took, and so important to the success of this project, is how the trust and the residents organized themselves to go in the neighborhood and explain the project. And they were really smart about the racial dynamics. You know, most of the residents of the original Roland Curtis gardens were African American or Afro-Caribbean, and a lot of the immediate neighborhoods, residents are LatinX, and then there's another private housing development of African Americans farther away. And some neighbors had already started stirring opposition against this redevelopment project. This is very common in LA and they actually got a UCLA expert to say that would be a bad idea to know affordable housing, because it be isolating them in poverty or something. And then they use USC professor to be pro. So this is a word to the wise of the role of academics have this process, right? But they preempted a lot of it, because they had pairs of Latinx, and African American going out door to door and personally explaining the situation and diffusing rumors, etc. And that by the time the public comment period happened, 200 people on their side showed up with matching T-shirts, that seems to be the thing to do, and so they were able to get the approval process in one year, which is pretty fast for LA, right? Usually, there's a lot of neighborhood backlash for an affordable housing project. So I think that was also key in making this project feasible. Something like a Trust can do more than a private housing developer.

Shane Phillips 52:34
Annette Kim, thank you so much for coming on the Housing Voice podcast.

Annette Kim 52:37
Thank you so much for having me. It's great to share about this case and so good to talk with you, Mike. Thank you.

Shane Phillips 52:47
You can read more about Annette's Work on our website lewis.ucla.edu. Show Notes and a transcript of the interview are there too. The UCLA Lewis Center is on Facebook and Twitter. I'm on Twitter at Shane D. Phillips and Mike is at MC_lens. Thanks for listening. We'll see you next time.