Sustainability 2019: Time is Ripe for Housing Trust

by Mariah Goode

The recently rejuvenated Door County Housing Partnership aims to increase the permanent supply of affordable housing in Door County, specifically for year-round residents who work in the county.  

The Housing Partnership is modeled after what is often called a “community land trust,” but to prevent confusion with the Door County Land Trust conservation organization, the partnership’s board members refer to the new organization as a “housing trust.”  

As you’re probably aware from the pages of this newspaper, there are many people, organizations and local governments already working on the housing-related issues facing the county, so why (re)establish yet another organization?  

One reason is that many regulatory and funding mechanisms used in other areas of the country to ensure the ongoing and consistent provision of affordable housing are not options under Wisconsin law, so we need to pursue different strategies.

The most important reason is that the trust can ensure the perpetual affordability of the housing inventory it acquires or establishes. And, the housing can be legally restricted to be available only to local workforce households. There are no municipalities or nonprofits in the county doing those things.

Housing trusts can be structured in many ways – as a direct affiliate of a municipality or as part of another private nonprofit organization – but most housing trusts share some common operational features.  

First, they use available public funds and charitable donations to subsidize the cost of housing purchases and/or developments so the resultant dwellings are affordable for the targeted residents.  

Second, they set restrictions on occupant eligibility, use and price.  Trusts typically require housing occupants be at or below certain income levels when applying for the housing and that they use the housing as their primary residence. Some trusts also require at least one occupant be a member of the local workforce. The Door County Housing Partnership will require all of these things.  

The price-related restrictions are what keep the housing affordable in perpetuity. The trust sets formulas that regulate the rent that can be charged, or the maximum price for which owner-occupied housing can be (re)sold. These are then enforced by the trust through deed restrictions or “ground leases,” in which the trust owns and then leases the land to the people buying/building homes on the land.

Such leases are typically renewable and inheritable 99-year leases, and they allow the homeowner the rights of conventional homeownership, except that the use and resale of the homes must conform with the trust’s restrictions. The so-called “resale formula” is set so the owners will earn a profit on the sale, but the housing will remain affordable for the next qualifying buyer. The Door County Housing Partnership board of directors is working on price-restriction details.  

Depending on the project(s) undertaken, a housing trust can also be responsible for everything from construction to maintenance to landlord oversight, and it can operate as a community advocate, educator or fundraiser. Ultimately, the trust’s main purpose is to ensure a steady, long-term supply of affordable housing for the community.   

The Door County Housing Partnership has been set up as an independent nonprofit organization, so it has the flexibility to work on its own or with any partner – individual, government agency, municipality, nonprofit, business or developer – to acquire or develop affordable workforce housing in the county. And, as a nonprofit organization, any gifts from individual donors of funds, land and buildings will be tax deductible.