Lawmakers Are Pushing To Empower Community Land Trusts, But Harsh NYC Reality Stands In The Way

As New York City’s housing affordability crisis grows increasingly urgent, lawmakers are looking at alternative ways to halt displacement. One bill, currently making its way through the New York City Council, would give priority for purchasing city-owned land to Community Land Trusts.

But the legislation has received criticism and pushback, including from within City Hall, even as CLTs have proliferated in other major U.S. cities where low-income residents are facing displacement amid skyrocketing rents.

Experts say NYC’s prohibitive construction costs and byzantine development processes — plus the bill’s proposed process of handing over land controlled by the Department of Housing Preservation and Development — throw the model’s feasibility into doubt without a real funding commitment.

“There's a real gap where the city will half-dispose of some of their HPD-owned properties to a Community Land Trust, and put the burden on them to bring them up to code,” said Mychal Johnson, a founding member of nonprofit South Bronx Unite and a member of the group’s advisory board. “They're almost setting it up for a Community Land Trust to fail if they expect us to have to come up with the money to renovate property that they've let become dilapidated.”

NYC’s five boroughs count a total of 17 CLTs so far, many of which are still in the process of acquiring land. Made up from democratically elected boards, CLTs operate as long-term owners of the land and typically lease it on a 99-year basis to developers or other partners.

Unlike for-profit arrangements, CLTs structure leases in ways designed to preserve long-term affordability and prevent displacement.

Some, like Staten Island’s Northfield LDC, exist in order to facilitate acts like purchasing homes where owners are facing foreclosure to prevent evictions. Others, like the South Bronx Unite’s CLT and the East Harlem El Barrio CLT,  purchase land to develop permanently affordable housing and commercial space for local businesses. 

CLTs have existed for decades in NYC, starting with the Cooper Square Community Land Trust. When Robert Moses — the planner whose urban renewals famously replaced neighborhoods of color throughout the city with highways — proposed demolishing 11 blocks of low-income housing on the Lower East Side in 1959, local residents and workers fought back.

It took a decade of lobbying the city, but they eventually succeeded in getting the city to accept their plan to preserve the neighborhood’s low-income housing. Today, the Cooper Square CLT operates more than 360 apartment units in 23 buildings and it is looking to acquire more property for low-income housing development.

Momentum slowed for CLTs in the interim decades, however. Economic conditions in the 1970s and '80s crushed the amount of government funding available, meaning less access to capital for communities and less power to preserve their neighborhoods.

But with housing costs growing even before their pandemic-fueled growth spurt, an increasing number of cities are once again looking at the CLT model.

During the first year of the pandemic, CLTs sprang into action to prevent evictions in Oakland, with California’s state government setting aside $500M to fund purchases by similar initiatives. After pandemic-era speculation squeezed CLTs in Boston, Mayor Michelle Wu backed a model that allowed a trust to purchase a 114-unit building in East Boston.

Nationally, momentum has continued to build. A three-year-old CLT in Washington, D.C., leveraging the city's Tenant Opportunity to Purchase Act, has grown rapidly, taking over buildings where tenants banded together and selected it as their new owner. In February, Baltimore committed $2M to CLTs in an attempt to boost its own affordable housing stock.

New York City has also demonstrated support for CLTs in recent years under then-Mayor Bill de Blasio's affordability-focused administration.

In 2017, the city’s Housing and Preservation Department announced $1.65M in funding — obtained from New York state’s bank settlements — would be distributed to CLTs via grants. The funding allowed some CLTs to pursue opportunities to maintain affordable housing and built capacity for nine emerging CLTs.

Two years later, the New York City Council announced it was allocating an additional $870K in funding for CLTs. Last March, in de Blasio’s final months, the East Harlem El Barrio CLT got another boost: $13.2M in funding, including sums from HPD and the Community Preservation Corp., to renovate four city-owned buildings as affordable housing. 

Today, group of progressive lawmakers in the city council are throwing their weight behind CLTs. A bill introduced in August by Council member Lincoln Restler would give preference to CLTs and nonprofit developers when the city is disposing of land it owns. It has yet to advance out of the Committee on Housing and Buildings after a February hearing.

Restler told Bisnow in an emailed statement that nonprofits have a better track record of creating affordable housing.

“The data is clear: nonprofit developers are more likely than for-profits to build affordable housing and maintain real affordability long-term,” Restler said. “As rents continue to rise and more and more New Yorkers are struggling to get by, we need to act now to maximize truly affordable housing on every single publicly owned lot.”

Between 2015 and 2018, for-profit developers were awarded 78% of city-owned sites, but developed just 18% of new units for the lowest income levels, he said. By contrast, he added, nonprofits developed 35% of the units reserved for the lowest-income New Yorkers.

But Andrea Kretchmer, affordable developer Xenolith Partners’ founding principal, said at a Bisnow event March 21 that, after the expiration of the 421-a tax abatement last year, for-profit rental housing development has dried up, and nonprofit developers alone can't fill the gap.

“Nonprofits develop a very small fraction of the total count of affordable units in the city every year,” Kretchmer said. “The mayor couldn't possibly survive with 30% or 20% of the total number of units that he needs getting built.” 

Under Mayor Eric Adams, who has set a goal of building half a million new housing units over the next decade, the city has shown little support for CLTs. An HPD official testified against Restler’s bill, saying that it would restrict the city’s choices in selecting developers for city-owned sites.

“We are concerned that limiting our range of available tools, as this bill would, runs counter to other, critical and urgent policy goals — particularly our ability to build and preserve as much affordable housing as quickly as we can and our commitment to expanding opportunities for M/WBEs,” Deputy Commissioner for HPD’s Office of Development Kim Darga said at February’s hearing on the bill.

If the bill passes, housing experts and even some CLT leaders are concerned that it would be counterproductive without a commitment to funding. Paula Segal, a senior staff attorney for TakeRoot Justice’s Equitable Neighborhoods team, told Bisnow that the East Harlem properties are an example of how complex and costly it can be to bring city-owned properties up to standard.

“The buildings are so run down that to bring them back up to code, to bring them into a place where people will feel comfortable living there, that's going to cost a lot of money,” she said. “At the moment, the city isn't actually making those contributions, it's forcing the community land trusts and their partners to take out private loans. And that is a real barrier to long-term affordability.”

The cost of building and renovating is also a concern for Erica Buckley, the practice leader for co-ops and condos for law firm Nixon Peabody.

“One of the things that makes me a little nervous about all of these bills is first and foremost, a CLT is not a one-size-fits-all model,” she said. “It doesn't magically create subsidy. There isn't an as-of-right tax exemption that attaches to property going into a CLT.”

But even how CLTs are approaching funding is changing as their numbers proliferate nationally, Hunter College associate professor of urban planning Laura Wolf-Powers said, citing California and D.C. as examples.

“There's a growing conversation in the land trust world about how to access capital that is a nontraditional form of capital,” she said. “There's a political task of getting more public capital going toward the housing developed by or housing or anything developed by land trusts.”

While most of NYC’s CLTs are focused on housing, some CLT leaders are concerned that the single-minded focus on residential leaves communities lacking other types of space. South Bronx Unite’s Johnson points to the HEArts Center, a community facility focused on health, education and the arts, that the nonprofit wants to build at an abandoned drug rehabilitation facility.

Commercial spaces also hold potential for community members, Western Queens CLT co-Chair Memo Salazar told Bisnow.

“In Western Queens, there's not a lot of open community space,” he said. "Anyone who's lived here for a while knows that, whether you're trying to have a simple community meeting or a birthday party, you don't have a lot of options."

Western Queens CLT has already obtained grant funding and is eyeing the site targeted by Amazon for its second headquarters as a potential hub for local businesses, Salazar said. The CLT believes the property could serve manufacturing and commercial tenants in the local community. If, that is, the CLT is granted ownership of the site — something that would be facilitated by Restler’s bill. 

Nonresidential uses will also serve communities, allowing them to become well-rounded neighborhoods where renters can work and spend leisure time as well as live, Hunter College’s Wolf-Powers said.

“There's something that may be both symbolically and materially relevant to having that space not be dedicated to market development, but to activities that are valued by the people in the surrounding area — but are not necessarily rewarded in the white-hot real estate market that is New York City,” she said.

CLARIFICATION, APRIL 17, 2023, 12:50 P.M. ET: This story has been updated to include the context that Andrea Kretchmer's comments were made on stage at a Bisnow event.