The Russell Community Land Trust is designed to provide people in the Russell neighborhood with an affordable path to homeownership.
Cassandra Webb is the interim co-executive director of Russell: A Place of Promise. She talked with me about how the organization is helping more members of the Russell community achieve homeownership, and why it’s important.
This conversation has been edited for length and clarity.
Cassandra Webb: Community Land Trusts, also known as a CLT, is a way to preserve affordable housing in communities. They have been around for many years, and we are bringing one to the Russell community as a way to make sure that future homeowners have an opportunity to stay in the neighborhood. How they operate is that they are set up as 501(c)(3) organizations. Their boards are typically comprised of a tripart board, where a third of the residents who live in community land trust homes are on the board. The other third are residents of that community or that neighborhood that the CLT is located in, and then another third of the board operates as community members that have some technical expertise or some type of other connection to the community that really is value-aligned with the community land trust.
So the CLT is a steward of the land and owns the land in the community land trust. The homeowners own the homes that the land sits on, and the homeowner is going to purchase the home at an affordable rate based on a formula that the community land trust sets up. For instance, with the community land trust that Russell: Place of Promise is operating in the Russell neighborhood, we are setting our first homes on Elliot Avenue for homeowners between 50 to 120% AMI, so those homes will be valued at a price that is affordable to them and the community land trust. Russell: Place of Promise will put in a subsidy to allow that house to be affordable for that family.
So, for instance, say, constructing a new home. It's $200,000 to build it, to put it on the market for folks that are at 50% to 120% AMI, that may not be affordable for them. And so we then put equity into the home to bring that price down for them, to purchase the home at a price that is affordable to them. And then as they purchase that home, they are owners of that home. They can do remodeling, if they want to. They could do the upgrades that they would want. And at the time that they're ready to sell that home, there is an equity cap. So say, for instance, that $200,000 home, over five years, the home is now valued at $250,000 at the time of them selling it. There's an equity cap, and for us, that is going to be either 1% to 2% equity cap for them to walk away with, because we want to make sure that that home is affordable for future home owners that want to live in a Russell neighborhood CLT property. So that homeowner who's ready to sell will get 2% of that equity and then the price.
Michelle Tyrene Johnson: So there's a lot to unpack there for folks, either who know about home ownership or who don't. So what is the AMI in terms of the amount? How's that calculated?
CW: There's different ways that AMI can be calculated. It can be calculated based on Louisville, Jefferson County. It can be based on a neighborhood. That neighborhood-level data, it can be really hard to find, especially since the census is done every 10 years, and the way that neighborhoods are comprised of multiple census tracks at times. But for us, how we are calculating is looking at Louisville's average median income. And right now, I believe for a family of three, it's sitting at about $95,000. So when we're talking about 50% AMI, we're talking about half of that.
MTJ: I hear $200,000 to $250,000 for a house, and that seems like that's a lot. Is it?
CW: The data in the Metropolitan Housing Coalition’s annual report shows that the average house in Louisville is about $300,000. Unfortunately, we are short on supply when it comes to affordable housing in Louisville; that is a trend across the country right now, and it's becoming more and more of a problem.
