Can Land Trust Fix Housing?

While Ventura County has seen zero economic growth or substantial housing development in the last four years, two locals have formed a land trust that aims to remedy the stagnancy. Both have spent many years observing the region’s flatlining. Now Matthew Fienup, director of the Center for Economic Research and Forecasting at California Lutheran University, and Tim Gallagher, co-owner of the 20/20 Network, a public affairs and public relations firm, have joined forces to create the nonprofit Homes for Generations of Ventura County, a private organization that they claim signifies the first community land trust in Ventura County. Since 2008, Gallagher has been on the board of the Ventura County Community Foundation. Just prior, Gallagher served as editor and publisher of the daily Ventura County Star newspaper. Fienup, meanwhile, is no stranger to Ventura County and San Fernando Valley business circles — the economist is a popular speaker at business and economic forecast forums. However, Fienup and Gallagher reached a crossroads when they decided it was time to not just report about the affordable housing shortage but do something about it. “The response that we’ve gotten from the community has been wonderful,” Fienup said. Both Fienup and Gallagher have no qualms about crossing the line from observers to activists. “I was a journalist for 30 years,” Gallagher said. “It’s so nice to create a solution rather than editorialize.” “It’s the biggest single issue in the county,” Gallagher continued. “There are a lot of donor dollars available to solve the housing crisis.” Employers want homes Community land trusts are nonprofit organizations that aim to provide affordable housing in perpetuity by owning land and either leasing homes or renting affordable housing units on that land. The land stays with the trust while developers build housing on a 99-year lease. The goal is to reduce the cost of housing by removing the land cost from the deal. “So in effect, our model is affordable forever,” Fienup said. On the Homes for Generations board, Gallagher serves as president while Fienup is treasurer. Initial board members include David Edsall, an estate planning attorney in Camarillo; Penelope de Leon, superintendent of the Oxnard Union High School District; and Paul Shrater, owner of Newbury Park fulfillment business Minimus. From a retail real estate perspective, a buyer purchases the home building from the developer and pays the trust a small amount, typically around $10 to $100 per month, to lease the land. This effectively cuts the cost of the purchase in half, because the land is generally about 50 percent of the purchase price. Fienup said the key to solving Ventura County’s economic strife is to secure the housing that would attract a workforce to the area. “Housing is one of the biggest drivers in the economy,” he said. A big epiphany for the economist came when he participated in the 2018 VCEDA Business Outlook Conference on Oct. 5. Peter Zierhut of Haas Automation in Oxnard; Chris Meissner, of Meissner Filtration in Camarillo; and Amgen Inc. Executive Director of Business Development Jeremy Grunstein took part in a panel. “Those three all agreed that housing was the biggest challenge,” Fienup said. “They couldn’t attract and retain the talent they need.” Becoming involved in such a project feels like a logical next step for Fienup, who has taken part in addressing local challenges before. Five years ago, with groundwater issues looming, he chaired a stakeholder group called the Water Market Group, which included farmers, environmental advocates and residents. Despite some “very painful” conversations among them, they were able to reach a consensus, he said. “It emboldened us to try to do a similar process (with affordable housing),” said Fienup, who, with Gallagher, intends to first demonstrate success on a small scale and then grow the model, hopefully replicating the maneuver many times over. He added that rental housing could also become part of the nonprofit’s mission. Houses for Generations’ first board meeting unfolded Oct. 28, but in truth, Fienup and Gallagher’s partnership began with their formation of the Housing Solutions Working Group, a coalition of diverse stakeholders, in July 2017. “I do a lot of work with developers when they try to get their entitlements and the NIMBYs always win,” Gallagher said. “Why don’t we get stakeholders in the room – different sides – farm workers and farm owners, environmental and the developers? In every case housing has been the common denominator,” Gallagher said. Fienup and Gallagher are not the only locals making moves to address the lack of housing in the county in this fashion. Linda Braunschweiger, chief executive of Camarillo-based Ventura County Housing Trust Fund, is also looking into a land trust venture which will focus on developing multifamily and single-family homes aimed at extremely low- to moderate-income tenants. Braunschweiger said her organization’s community land trust expects to be operating as a separate nonprofit by the end of the year. The community land trust is already accepting land donations through her nonprofit. “In the long run, we have limited land for the development of affordable housing,” she said. “We see land cost rent going up … It’s an opportunity to impact those rental fees.” Not financially self-sustaining Created in the 1970s, community land trusts began proliferating in cities during the 1980s and 1990s, bent on reducing blight and providing stability in disinvested neighborhoods. Today, there are more than 200 nationwide. The largest is Burlington Community Land Trust in Vermont, with more than 500 homes and 2,000 rental units, which launched in the 1980s under then-Mayor and current presidential candidate Sen. Bernie Sanders.  However, not everyone finds the community land trust model ideal. Olivia Williams, an independent scholar who lives in a cooperative house in Madison, Wisconsin, and sits on the board of Madison Area Community Land Trust, wrote in an article for Jacobin earlier this year that the model has suffered the familiar woes of entities dominated by government bureaucracy and funding. Specifically, Williams said that the typical community land trust is not financially self-sustaining. Community land trusts “tend to be dependent on external funding, because ground lease fees alone are not enough to pay someone to complete the set of tasks administering a CLT necessitates,” the article states. “Funding a CLT’s operations then becomes one of the primary motivators of the organization. And as HUD funding dwindles, securing coveted HOME or Community Development Block Grant awards has become a highly competitive process requiring formulaic objectives, exact budgets and absurdly regimented financial record-keeping.” Williams’ prescription for CLTs is to “find more community-based sources of funding.” Working around SOAR In Ventura County, the government red tape around housing includes SOAR (Save Open Space and Agricultural Resources), a voter-approved initiative that has curtailed building by necessitating a community vote to approve developments. “The problem with SOAR is it’s the most stringent repressor of urban growth in a county in the country,” Fienup said. However, he stressed that Homes for Generations is not an attempt to undermine SOAR. “SOAR goes a long way to explain the lack of housing but if you got rid of SOAR tomorrow, you still need to develop,” Fienup said. Currently, Homes for Generations has two properties that Fienup and Gallagher believe will serve as pilot projects, one in Port Hueneme and another in Thousand Oaks. Gallagher explained that the acre parcel in Port Hueneme had been zoned for commercial. With Habitat of Humanity as a partner , they have convinced the city to sell them the land for $250,000. In Thousand Oaks, there are approximately 3 acres of land in a residential zone. “The challenge is the money until people see this – we’re up against a pretty steep curve, but once we get this off the ground, (results will flourish),” Gallagher said.