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Investors Raised Funds and Pitched Denver on a Land Trust. Now They May Go Elsewhere.
Creative Commons/Woodleywonderworks

Investors Raised Funds and Pitched Denver on a Land Trust. Now They May Go Elsewhere.

When a philanthropic group raised $24 million in private capital to create 700 affordable homes, referred to collectively as the Elevation Community Land Trust, and approached Denver about it in December, the investors thought the city would quickly buy into the idea and provide additional capital and, maybe, land. After all, the Hancock administration has acknowledged that Denver is facing a housing crisis, and the city has been preparing a $150 million five-year plan to help address affordability and a lack of housing for low-income earners.

More than four months after that presentation to the mayor's Housing Advisory Committee, however, discussions have lagged and the land trust's backers are not sure where they stand with the city. As a result of the lukewarm response from Denver, they have been discussing their land-trust proposal with other municipalities — including Westminster, Aurora and Adams County — that have been more receptive and potentially willing to provide land and the additional dollars needed for a sustainable land-trust program.

Land trusts involve investors — whether private or in government (or a partnership of both) — buying parcels of land and selling the deeds to houses on top of the land. By separating ownership of the home from the land underneath it (the latter of which is held by a trust in perpetuity), the land is effectively taken off the market, which greatly reduces appreciation. Homeowners can still sell their houses, but at more affordable rates because the land underneath them is owned by the trust.

Dave Younggren, CEO of Gary Community Investments — one of the main partners in the Elevation Community Land Trust alongside the Colorado Health Foundation, Bohemian Foundation, Gates Family Foundation, Denver Foundation, Mile High United Way and Northern Trust — says he and his partners first approached Denver because they recognized the need for affordable housing. They also saw a mayoral administration that was already setting aside lots of taxpayer money to invest in affordable housing.

"I'm disappointed that it's moving so slowly [with Denver],” Younggren says. "After we did the [December 7] presentation, we were anxious to move forward and thinking that it'd be a fairly accelerated process, but then the city had the realignment, with housing moved under the Office of Economic Development — that really slowed things down. Now we’re not quite sure where the process is.”

Derek Woodbury at the Office of Economic Development says that land trusts were brought up at the latest Housing Advisory Committee meeting but that OED wants more information before making any decisions. In an email, he wrote, “While there are a couple of land trust models that have been operating in Denver historically, there are multiple ideas regarding how to build upon historic models or expand the availability of land trusts in the city across a variety of partners. Given this landscape, OED is exploring a procurement process that brings those different ideas together through a Request for Information (RFI) that would help us organize, understand, and compare the different ideas about land trusts in Denver now. We would have the opportunity to decide through an RFI process whether to award funding to a specific entity or entities, which could involve a more specific Request for Proposals (RFP) from the respondents to the RFI…We expect this could result in an RFI being released later this spring."

The investors in the Elevation Community Land Trust are not holding their breath. While Younggren says he hasn’t completely turned his back on Denver, he and the other investors were approached by other cities and counties after news of the December 7 presentation broke.

"We got a number of calls from interested municipalities including Westminster and Adams County that said, 'We understand what you're trying to put together and are interested,’” he says. “What's been encouraging is that there has been a lot of interest from other municipalities, so we are having those discussions."

Investors Raised Funds and Pitched Denver on a Land Trust. Now They May Go Elsewhere.
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Land trusts are especially pertinent as problems with other types of affordable-housing programs are coming to light. Last month, Denver officials disclosed that approximately 300 homes in the city's income-restricted affordable-housing program are occupied by families who don’t qualify for the program. Because of a lack of oversight — which the city says was partly caused by staffing shortages during the Recession — potentially hundreds of homes were sold at market rates to residents who were not informed that the homes were for income-restricted occupants and part of the city’s affordable-housing program. Now it’s unclear whether some families will be able to stay in their homes beyond the end of this year.

Kevin Marchman, a forty-year veteran in housing issues, the founder of the National Organization of African Americans in Housing, and the chair of the mayor's Housing Advisory Committee, says that land trusts like the one Younggren is proposing avoid some of the pitfalls of income-restricted housing programs such as the one currently causing a scandal in Green Valley Ranch.

"A lot of folks don't know this, but land trusts go back many, many years with the African-American community," Marchman explains. "Years after slavery ended, when the newly freed slaves were sharing property, they often tried to buy property together for their own communities, and farmers would share that property. It evolved into what we call land trusts."

Both Younggren and Marchman say land trusts are becoming more common, with a prominent local example being the Colorado Community Land Trust, which has bought property mostly in and around Lowry. There are also advocates in north Denver with the Globeville-Elyria-Swansea Coalition who are pushing the city to invest in a community land trust there.

Unlike the Denver income-restricted program that is currently dominating headlines, homes in land trusts stay affordable in perpetuity because the custodians of the trust don’t set expiration dates on the deeds, when the homes switch to market rate.

"Our model isn’t a time-limited deed restriction,” says Younggren. "And I think the other component we’re proposing that’s appealing — that doesn't happen with deed restrictions, because there is not a lot of contact with the homeowner — is supportive services provided to the families. So if there's a problem that occurs and the family is struggling financially, then you know about it and are able to communicate with the family and ask what kind of supportive help they need to recover."

Marchman explains that, as chair of Mayor Hancock’s Housing Advisory Committee, he is advocating for the Elevation Community Land Trust, but ultimately the decision-making falls to the mayor, the Office of Economic Development and Denver City Council.

"I know the city is entertaining suggestions of how to address and move on from what is going on in Green Valley Ranch," he says. "I hope that situation will enlighten folks to say, 'Hey, there is an alternative to those programs.' That alternative is land trusts."

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