The Life of A Neighborhood

By February 27, 2019 February 28th, 2019 Foundation Blog

Imagine leaving your home and walking down the street to the local barber shop, the one your father used to visit. As you make the ten-minute trek, you notice the tree stump where he would sometimes sit to rest in his older age on his way to get a fresh cut. You pause. Let that memory sweep over you before moving on.

A few blocks ahead, you peek into the window of the local bakery where your grandmother bought loaves of bread. When you accompanied her as a kid, you knew that stop meant a thirty-minute conversation, (which of course felt like an eternity to you, covering the headlines of neighborhood happenings). You waited, impatiently hanging off your grandma’s sleeve, occasionally tugging to signal you were ready to go.

Finally, you reach the barbershop, take a seat in your usual chair and are reassured by the familiar atmosphere and community that welcomes you.

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In some neighborhoods, this scenario could very well play out in reality. More often than not, the passage of time comes with gradual (or sometimes abrupt) change to the geography of our surrounding environment.  With that physical change, our memories are forced to live only in our hearts and minds, without those prompting visuals. Some would call this inevitable change, even progress– the bettering of a neighborhood… But, what if we looked more closely at how this process unfolds– who stands to gain and who stands to lose? Many of us may already know the answers to these questions— maybe we can break it down with data and fancy charts, while others of us know it intimately in our bones through stories of the displacement of our own families and neighbors.

What we’re talking about is gentrification.

Gentrification and the displacement that most often follows has become an issue of grave concern to folks across the Twin Cities region, North Minneapolis in particular. In a nutshell, gentrification is a process of renovating disinvested urban neighborhoods through new development, which often creates an influx of more affluent residents and pushes out longtime inhabitants who can no longer afford to live there. Many Northsiders point to areas along Glenwood Avenue as proof for this process, seeing breweries sprouting up and the downtown “feel” slowly creeping its way further north. Those who live and work in the area can effortlessly paint a picture of what might be coming next. It’s effortless because this has happened before—waves of investment and disinvestment…After all, it wasn’t that long ago when highway systems ripped through neighborhoods, most commonly populated by communities of color that  worked hard to build up local economies (for example the Rondo neighborhood in Saint Paul). Gentrification, to me, is really no different. At minimum, it operates on a similar value: profit over people. 

So how do we stop this from happening? Who is responsible? What policies facilitate this process? While there are many reports and studies on this topic, nearly all of them conclude that there is no single entity to blame—what we can do is track the chain of events that usher in development and subsequent displacement.

But here’s the thing—communities that are most vulnerable to gentrification and displacement don’t necessarily oppose investments that could bring fresh food options, new housing, more entertainment, or living wage jobs. Ask any Northsider and they would tell you that not only are these all changes they’d love to see, they’d also be able to point to local leaders within the community who already have ideas and committed networks to make them happen! What is troubling is that investment usually comes from outside a community and therefore is structured in a way that ignores existing cultural wealth and local solutions. Furthermore, this investment fails to anchor and sustain those who are already in the space.

What would it look like to center community in our development conversations and plans? How do we keep an eye fixed on anchoring ownership locally and for the long haul?

These are big questions that likely have a number of powerful and feasible answers. One idea that a group of local activists, business owners, government, nonprofit and philanthropic representatives have been exploring is a commercial land trust.

A commercial whaaaat? Before we go into the status of that project (and how to get involved) let me break down the model:

Housing Land trusts (typically referred to as Community Land Trusts) are most commonly seen around the country as a solution for increasing access to homeownership opportunities. How does it work?  Simply put, a community land trust (CLT) acquires land and removes it from the speculative, for-profit, real estate market. The land trust holds the land “in trust” forever for the benefit of the community by ensuring that it will always remain affordable for homebuyers. The affordability is made possible because land is often the most valuable part of a property and thus most responsible for fluctuation.

A common critique of the land trust model is that it does not allow the homeowner maximum return on investment upon sale of the house. This is because its affordability requires a certain formula that splits the equity. A foundational assumption of this critique is that the sale of a house will unequivocally result in a financial return for the seller. This is not always the case, as the 2007/2008 housing crisis would demonstrate. In fact, in some cases, the seller might even lose money—the land trust in this case would absorb a majority, if not all, of that loss. This critique also largely ignores a very important, potentially transformative, benefit of the land trust model. An individual or family buying a home through the land trust will likely be able to cut down on costs that might have been involved in a rental situation—not to mention gain the priceless peace of mind of knowing that rent won’t suddenly go up and leave the family looking for shelter. While the land trust has no control, nor should they, over how individuals use their monthly savings, there is evidence that these savings have enabled people to go back to school, buy a more reliable vehicle, or start a business. I am not a math genius, but when you add up, say, $400 of monthly savings over 10 years (the average amount of time folks choose to stay in a CLT home) we’re suddenly talking $48,000. So, while it is undeniably true that at point of sale a CLT homeowner may not walk away with the potential amount they might have received via a traditional sale, those long-term savings can propel families forward in a different way. The model also provides stability for a family and can increase overall social connectedness to the neighborhood.

Locally, the City of Lakes Community Land Trust (CLCLT) in North Minneapolis has secured 121 homes over the past 13 years, supporting 148 families in homeownership. Now, after fifteen years of residential work, and after being asked by residents, government, and the business community
they are poised to launch a commercial land trust. We know that businesses play an important role in the life of a neighborhood. The lack of affordable commercial space is a considerable barrier to retention and expansion of locally owned businesses. Therefore, growing concerns that businesses are vulnerable to displacement due to rent increases, among other factors, makes this new venture a no brainer.

A Commercial CLT is a community-based initiative that works to provide perpetually affordable commercial ownership opportunities. A Commercial CLT acquires land and removes it from the speculative, for-profit, real estate market. Commercial CLTs hold the land it owns “in trust” indefinitely for the benefit of the community, ensuring that the land will always remain affordable for business owners. The Commercial CLT provides a 99-year renewable ground lease to the business; the ground lease includes a resale formula that determines the building’s sale price and the business owner’s share of the building’s increased value at the time of sale. This allows the initial investment made by public and private subsidy sources to remain with the property, making it affordable to subsequent, qualified buyers.

In 2017, with funding from The Jay and Rose Phillips Foundation of Minnesota, CLCLT began to explore the feasibility and potential operations of a Commercial CLT model.

CLCLT worked with national consultant Michael Brown of Burlington and Associates to assess the feasibility of a Commercial CLT and make a recommendation on the role CLCLT should play in its development and implementation. Brown’s preliminary recommendation was for CLCLT to initiate a Commercial CLT pilot program to validate the need for and viability of a Commercial CLT.  In the fall of 2018, the CLCLT convened an advisory committee to advise and create specific recommendations around the mechanics of a Commercial CLT. The advisory committee included local businesses, community development corporations, funders, and government representatives.

Now, the CLCLT is seeking to appoint a founding advisory board that will shepherd this pilot into existence. As a program of the CLCLT, this advisory board will report to the organization’s board for approval of major decisions, but otherwise will have autonomy and responsibility to move the vision for the Commercial CLT into reality. The initial advisory committee (now dissolved) named community engagement, racial equity, and community-led decision making as core operating values. As such, the goal is for this advisory board to be representative of the Northside community, to include the voices of business owners and residents of color who can center the concerns of the neighborhood in a constructive way.

Applications are due on March 20th. If you are a Minneapolis resident interested in making a difference in your community through community-driven ownership of land this might be a perfect way to get involved. Technical expertise in commercial real estate development and/or the willingness to learn about commercial real estate are a plus. Will you apply? Click here for the application form and some additional background on the project.

If you want more information about the project and/or the application process you can call Jeff Washburne at 612-594-7147 or email to jeff@clclt.org. Erin Jerabek Heelan and Coco will be hanging out at Breaking Bread Café from 11-1pm on March 12th to answer questions as well.  Come visit with us! 

If successful, the Commercial CLT has the potential to provide a platform for local Black Indigenous People of Color (BIPOC) businesses to grow and thrive, for residents to claim space through collective decision-making power and ownership of land, and together can work towards building a vibrant human-centered economy. 

E. Coco

Author E. Coco

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