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HomeMy WebLinkAbout07-16-20 Public Comment - M. Brown - Headwaters Community Housing Trust Burlington Associates in Community Development 14 July 2020 To: Bozeman City Commission From: Michael Brown Re: Headwaters Community Housing Trust Thank you for allowing me to provide you with information about the Headwaters Community Housing Trust (HCHT). The HCHT board of directors and I hope this information will not only increase your understanding and support of our organization and its mission but will also lead to continuing discussions regarding future partnerships between HCHT and the City of Bozeman to create effective, long-term solutions to the affordable housing challenges we collectively face. Genesis of the Headwaters Community Housing Trust From its initial conceptualization, the plan for the Bridger View development was to include a mix of market-rate and affordably priced homes. An additional component of the plan required a stewardship entity to be in place, with the focus and capacity needed to preserve forever the availability and affordability of the homes to be developed and made affordable to “missing middle”- income households in this new, compactly-designed, pedestrian-friendly neighborhood immediately adjacent to the Story Mill Community Park. In the summer of 2019, I worked with a small working group to assess how best to structure the operations of this new stewardship entity for the Bridger View community – exloring options ranging from asking the City or HRDC to take on these responsibilities to creating a new nonprofit organization to manage these functions.The outcome of this assessment was a consensual decision that Bozeman needed a new community land (CLT) organization with a single focus and dedicated capacity to create and preserve permanently affordable housing, including the homes to be made affordable to middle-income households at Bridger View. Mission The Headwaters Community Housing Trust is a nonprofit, charitable, community-based organization created to increase the supply of owner-occupied homes that are affordable to working households otherwise unable to afford homeownership in Bozeman and the surrounding area and to ensure that these homes remain available, well-maintained and affordable for generations to come. The mission of the Headwaters Community Housing Trust is twofold: 1. To protect the 31 “missing middle” homes in the Bridger View development – HCHT’s initial focus will be to preserve the availability, affordability and condition of the affordably priced owner-occupied homes to be built in the Bridger View neighborhood and to assist the owners of these homes, as needed, in their efforts to be successful as homeowners and as residents of this community. 2 2. To increase the supply of permanently affordable housing in Bozeman and, eventually, beyond – Because of its singular mission and its focused organizational capacity, HCHT will work to build a broad base of awareness and support for permanently affordable housing and the benefits of protecting and leveraging municipal and private sector resources invested to create the initial affordability of this housing. Additionally, HCHT will work to craft partnerships with the City of Bozeman and other community interests to create additional income-restricted, resale-restricted permanently affordable housing to address urgent in the city and the region while enhancing its ability to achieve organizational sustainability. How Headwaters Community Land Trust Will Operate Like the nearly 300 community land trusts in operation across the country, Headwaters Community Housing Trust1 is committed to creating housing that remains affordable forever. Rather than structure affordability assistance as a grant or a loan to any individual homebuyer household, HCHT will use these same resources to write down the initial purchase price of the home to level that is affordable to its target clientele. HCHT will sell each home at an affordable price to an income- eligible, qualified homebuyer household while retaining ownership of the land parcel on which the home sits, leasing the parcel to the homeowner through a 75-year, inheritable, renewable land lease. HCHT’s lease agreement will convey to the homeowner an exclusive, durable, enforceable right to occupy and use the land, along with most of the rights and responsibilities available to traditional, fee simple homeowners, while detailing specific expectations and requirements regarding the homeowner’s use and occupancy of the property while they own their home. Additionally, to keep the home affordable from one income-eligible homebuyer household to the next, HCHT will limit the price at which homes located on HCHT-owned land may be resold – allowing the homeowner/seller to keep all of the equity they earn through paying down the principal balance on their home purchase mortgage plus a limited share of the home’s increase in value during their ownership. Effectively, HCHT homeowners that are given the opportunity to purchase and own a home they can afford agree to leave this affordability with the home, should they ever choose to sell, so this same opportunity is available to the next income-eligible homebuyer household. As a result, HCHT homes will remain affordable from one working family to the next without requiring additional affordability resources to be invested each time the home resells. Accomplishments to Date HCHT was incorporated in June 2020 after months of planning by a broadly representative group of community leaders who now serve as its governing board of directors – including Carson Taylor (former Mayor), Barb Cestero (The Wilderness Society), Randy Carpenter (Future West), Kelly Olinger (Comma-Q), Christine Walker (Navigate) and Tracy Menuez (HRDC). In October, this founding board of directors will be expanded to bring on directors with additional skill sets and perspectives, to further enhance the prospects for HCHT’s short-term and long-term expense. Per its bylaws, the HCHT board of directors will eventually transition to a governance structure consistent with community land trust best practices: with one-third of the director seats to be filled by homeowners living on HCHT-owned land; one third of the seats filled by community residents; and the remaining one-third of the director seats filled by individuals with specialized skills and expertise. 1 The board of directors selected the name “Headwaters Community Housing Trust” in order to situate the organization geographically without confusing the new organization with the Gallatin Valley Land Trust. 3 I am currently providing technical and executive management to the Headwaters Community Housing Trust, with funding provided by The Kendeda Fund, for this soon-to-be-designated 501(c)(3) organization. From this perspective, I am able to share best practice information and analysis gleaned from 40 years working with community land trusts and their public sector and private sector partners across the country. In June, The Kendeda Fund provided an initial $55,000 grant to HCHT to cover start-up and operating costs from July 1 through December 31, 2020. Bridger View Development In 2019, ownership of the 8.03-acre Bridger View site was transferred from the Trust for Public Lands to HRDC, which, in turn, assumed lead responsibility for the development of the planned Bridger View neighborhood. Under HRDC’s leadership and coordination, the 62-home, mixed-income (31 for- sale market-rate homes plus 31 for-sale homes to be made affordable to households with incomes between 70%-120% of Bozeman Area Median Income) has transitioned from project concept through unanimous and enthusiastic approval of the preliminary PUD and the preliminary plat by the City of Bozeman Planning Board (on May 5) and by you, as the Bozeman City Commission (on May 18). From the outset, the plan has been to transfer the 31 “missing middle” homes upon completion to the new stewardship entity – now, the Headwaters Community Housing Trust – to market and sell to eligible households and to keep affordable forever. Recently, the presence and evolution of HCHT has catalyzed a series of decisions – endorsed by The Kendeda Fund and by HRDC – for an accelerated and enhanced transition from HRDC to HCHT. These negotiations may result in the Headwaters Community Housing Trust carrying additional responsibilities related to the development of the Bridger View community, as well as assisting with messaging and community outreach, coordinating the sale of the market-rate homes as well as the “missing middle” homes, and securing the commitments needed to round out the Bridger View development pro forma. Future Collaborations The Headwaters Community Housing Trust’s board of directors, along with its advisers, consultants and funders remain steadfast in their commitment to nurture the partnerships already in place and to forge innovative and effective new partnerships with the City of Bozeman and other community interests. While the details of any potential future partnerships will, of course, need to be worked out, possible avenues that HCHT would like to explore with the City of Bozeman include: ç HCHT could assume stewardship responsibilities for housing – particularly, owner-occupied homes – made affordable to low- to moderate-income households through municipal requirements or incentives and/or through public/private partnerships crafted or supported by the City. ç The City and HCHT – perhaps in collaboration with HRDC – could consider developing a ‘homebuyer-initiated program’ in which eligible households are able to purchase an existing home of their choosing, at a price they can afford, in exchange for an agreement that HCHT will keep the home affordable forever2. By selectively removing some existing moderately 2 I have helped a number of CLTs develop homebuyer-choice programs like this that are continuing to operate successfully. 4 priced homes from the speculative market, we could prevent the loss of this housing stock, as well as the continuing displacement of limited-income households from our community. ç There is precedent for employers supporting community land trusts as a means to enhance the stability of their workforce. The City and HCHT could consider jointly pursuing possible public/private partnerships with Bozeman employers focused on creating stable, permanent housing that is affordable to local working families. The housing affordability challenges that we, as a community, face are considerable – and, in a COVID-impacted reality, are likely to continue to spiral. At a minimum, those of us associated with the Headwaters Community Housing Trust want you all, as policymakers for the City of Bozeman, to know that you have a new community partner that is solely and stubbornly committed to (a) raising public awareness and understanding of the nature and scope of the affordable housing needs in our community; (b) working to initiate partnerships with the City and with other private sector partners to craft effective, community-appropriate strategies and projects to address these urgent and growing needs; and (c) preserving the availability and affordability of housing that is created through the investment of public sector and private sector initiatives and resources, ensuring that these community assets are protected and preserved for generations to come. Should you be interested, please know that I would be pleased to meet with you to discuss further common interests and future possibilities. On behalf of the board of directors of the Headwaters Community Housing Trust, thank you for your consideration.