Community Land Trusts, Gentrification and the OZ
Season 1, Episode 3
In Episode 3: Community Land Trusts, Gentrification and the OZ, Dan Bitner, MBA speaks with Julius Kimbrough from the Crescent City Community Land Trust in New Orleans, Louisiana, and Val Orseli from Cooper Square Community Land Trust in NYC’s Lower East Side. In this episode, we explore gentrification pressures and how CLTs can act as a bulwark for affordability in rapidly changing neighborhoods. Dan Bitner leads listeners through the basics of how CLTs operate and learns about innovations on the CLT model from our guests. These innovations include: the scattered site CLT in the Lower East Side which now encompasses over 20 buildings, and the use of predial servitude and deed restrictions in mixed income, mixed use buildings such as the newly restored Pythian building in New Orleans. We end by asking our guests for their insights into the current opportunities and challenges for the CLT model. Join us and listen in!
1. Katrina swept away New Orleans’ school system, ushering in new era from The Washington Post by Emma Brown. September 3, 2015.
2. See pp.31-32 for mini case study on self liquidating equity for investing in cooperatives (Dan mentions this kind of arrangement in his final set of reflections), from Innovations in Financing Structures for Impact Enterprises report from the Multilateral Investment Fund with support from the Rockefeller Foundation.
4. Crescent City Community Land Trust https://www.ccclt.org/
5. For more of the Pythian story, The Triumphant Return of the Pythian, by Danielle Del Sol, April 2017, Preservation in Print: https://prcno.org/triumphant-return-pythian/
6. Cooper Square MHA http://csmha.org/wordpress/
*Photo of Val Orseli from Cooper Square CLT, courtesy of Val Orseli
Kate Cooney (00:00):
This is CitySCOPE.
Camilo Monge (00:01):
A new podcast from the Inclusive Economic Development Lab at the Yale School of Management.
Lauren Harper (00:05):
Where we learn about what might be possible in our city by talking with others about what is happening in theirs.
Liam Grace-Flood (00:11):
Are we ready?
Dan Bitner (00:00:27):
Hello and welcome back to the CitySCOPE podcast. My name is Dan Bitner, a recent graduate of the Yale School of Management, and I have the privilege of being your narrator for today’s episode, discussing the Community Land Trust model. I know some of you listening today may be unfamiliar with this topic and others may be already experts hoping to gain some additional insights from industry practitioners. Rest assured we have both groups covered. We’ll be walking through the model together while hearing from two guests of the podcast - Julius Kimbrough of Crescent City Community land trust in New Orleans, Louisiana and Val Orselli of Cooper Square Community Land Trust in the Lower East side, New York, New York. To better introduce each of these gentlemen, we have professor Kate Cooney, Yale School of Management.
Kate Cooney (00:01:09):
Hi Dan. Let’s start with Julius Kimbrough. When I was putting the podcast together, I asked friend of the pod, James Johnson-Piett from Urbane Development, for recommendations for folks in the community land trust space doing interesting cutting edge work. Julius and the work of the CCCLT in New Orleans were top of his list. Julius is a native New Orleanian with an MBA from the Booth School of Business and a Master’s in Public Policy from the Harris School, both at the University of Chicago. He worked in community economic development and finance for many years and is putting all of those skills to use in his relatively new position as Executive Director at the CCCLT.
Kate Cooney (00:01:48):
Val Orselli is a veteran housing advocate and Executive Director of the Cooper Square Mutual Housing Association and Community Land Trust. These are initiatives of the Cooper Square Committee in the Lower East Side, Manhattan legendary group that initially formed in the 1960s to oppose the plan for urban renewal that would have cleared many of the housing that exists there today. I say would’ve because the tenants of the neighborhood organized and created an alternative plan for the neighborhood that eventually won out over the plan Robert Moses initially proposed.
Dan Bitner (00:02:20):
Thanks professor Cooney. I think we should start at the finish. If there’s one thing I’d like everyone to take away, it’s the purpose of a CLT is to build a community within a community. Certainly acquiring land and developing affordable housing is the primary function, but there is so much more that a community land trust can offer - from commercial assistance to green space rehab to advocacy at the local government level, CLTs are truly adaptive to the community needs. Along those lines, Julius Kimbrough shared with us the vision for Crescent City
Julius Kimbrough (00:02:50):
Crescent City Community Land Trust is an organization that was designed to do anti-displacement work. Our mission is to promote neighborhoods, community stability, and so place matters within our work. There’s displacement and gentrification happening in New Orleans right now, so we communicate with people and we propose a different method to mitigate displacement, to make gentrification work for the people who have lived in the communities their whole life.
Dan Bitner (00:03:20):
Julius mentioned making gentrification work for the people already living in New Orleans. So we asked him what are the dynamics of gentrification post-Katrina?
Julius Kimbrough (00:03:29):
It’s a long time now; Katrina was 14 years ago. But it has defined much of what has happened in the last 14 years. Pre-Katrina gentrification in New Orleans was happening in our Central Business District. Our CBD (Central Business District) is adjacent to the French Quarter across Canal Street. What you were seeing there was second floors and third floors of what you might think of as townhouses in the Central Business District being occupied. First levels were a commercial space. The upper levels in many cases were unoccupied. And so those are beginning to be occupied. Not necessarily a lot of displacement as a consequence of those unoccupied spaces, but neighborhoods being redefined. There were some other forms of gentrification happening, but at a very low rate.
Julius Kimbrough (00:04:25):
Post-Katrina, we’ve had a number of effects happening simultaneously. One of them would be just the national trend of gentrification. And you know, you break that word down; literally it means the return of the gentry, which is means middle-class people. That was a national trend that was sooner or later going to get to New Orleans. Katrina really put a spotlight on New Orleans and it accelerated things, maybe even exacerbated; there are multiple television shows that have taken place in New Orleans post Katrina, the national media was in New Orleans en masse, how is New Orleans doing in year one after Katrina? How is New Orleans doing in year two? And the education area in particular I think that was one of the central areas that led to a large number of younger people with resources coming to New Orleans.
Kate Cooney (00:05:21):
Former Education Secretary, Arnie Dunkin, once said that hurricane Katrina is the best thing that happened to New Orleans in terms of education. Prior to Katrina, test scores were dismal; Only 26% of the children achieved mastery or above on standardized tests, well below an already too low state average if 34%. So as Julius explains, there was a lot of agreement amongst city stakeholders that something needed to be done
Julius Kimbrough (00:05:48):
Just before Katrina, the state of Louisiana had essentially put a law in place that would allow the state to take over a significant number of failing schools in Orleans Parish. That was a controversial bill when it was passed. One of the more interesting aspects of it, one that a lot of people tend to forget is that it was a number of black politicians from New Orleans who cast the deciding votes, who led the effort to initiate the state takeover. So that law was in place before Katrina, Katrina happened and the people who were responsible for our school system at the state level hit the accelerator button and how they wanted to rethink the school system.
Kate Cooney (00:06:31):
The journalist Emma Brown wrote in a Washington Post article in September 2015, that in the 10 years since Hurricane Katrina battered New Orleans, there is almost nothing about the city that has changed more than its public schools. Julius recounts how the changes in the education system impacted the local housing market.
Julius Kimbrough (00:06:50):
So they fired 8,000 people overnight. The way that employment plays out in, I think a lot of the country, but certainly in the south, African Americans are - with a college degree or without - are locked out of the private employment sector. And so we tend to be employed in the government sector and/or nonprofit sector. This means that those 8,000 school board employees were overwhelmingly African American and they formed, I would say the base of the African American middle class in New Orleans. And when those 8,000 people lost their jobs, that meant many of them will be less likely to come home soon. It was not a place where an African American teacher who had previously worked for OPSB could easily come home and find a job.
Julius Kimbrough (00:07:38):
And when those jobs did come back online early on, the new people who were overwhelmingly younger and white and magically overnight salaries were suddenly 50% higher than they used to be for teachers in our school system and I’m making up numbers now. We probably had about 25 people before Katrina who made more than $100,000 a year. After Katrina, those first couple of years, we suddenly had 100 people who were making $100,000 a year.
Kate Cooney (00:08:07):
Julius, you have said that place matters in your work. Can you say more about how these education reforms impacted place? In other words, what has been the impact of the mostly younger and whiter reformers flocking to the city on the neighborhoods where you are working?
Julius Kimbrough (00:08:24):
The new New Orleanians could not afford some of the wealthier, more resourced neighborhoods that already existed because those neighborhoods were just out of their price range. They were relatively young people on average at the time. And who wants to move to New Orleans to live in a neighborhood or a home that looks like any place in America. You want to live in a historic part, you want some character, you want to be in the neighborhood that you see on television where this fascinating program called Treme is shot; you want to be in a neighborhood that looks like that. And so they wired some of the existing housing and so those lower income New Orleanians who did return to those urban core neighborhoods are now experiencing higher rent because the neighborhood has been upgraded. The home housing stock has been upgraded and you’ve got more demand with stronger dollars for those remaining homes.
Julius Kimbrough (00:09:17):
And then you got investment, public investment followed Katrina - brand new schools, brand new libraries, brand new hospitals, brand new retail spaces, new national retailers coming into New Orleans. We have a Ross in the City of New Orleans now in part because there was new money and new space where the new opportunity for them to move in. Prior to Katrina, you talk to bankers, you talk to real estate people and they say, “Oh, so-and-so corporation wants to come to New Orleans, but New Orleans is landlocked, New Orleans has a limited supply of retail. These national retailers only want to be in certain neighborhoods. There’s no real estate for them.” Well suddenly you’ve got a whole bunch of new money in New Orleans, a bunch of empty housing, a bunch of jobs that need to be filled and a bunch of commercial spaces that are now derelict. That created a lot of opportunity for new people, new wealth. It’s been fascinating watching gentrification happen in the last 15 years.
Kate Cooney (00:10:13):
It’s at this moment that Crescent City Community Land Trust is born. It’s in this aftermath of Katrina in this realization that there are these affordability pressures and this desire to attempt to create some permanent affordability in neighborhoods that were rapidly losing that affordability. Were there any Community Land Trusts to build on? Or were you one of the first?
Julius Kimbrough (00:10:41):
We were one of the first. Crescent City Community Land Trust was founded in 2011. By 2011 there were many affordable housing units that had been redeveloped in the city. There were also a large number of apartments that had been developed mixed income spaces with the low income housing tax credit, there were a variety of people who were concerned about the large numbers of affordable units being developed in the city, and what would happen when those units fell out of compliance?
Dan Bitner (00:11:12):
A question you might have is how are Community Land Trusts different from other forms of affordable housing, especially given that post-Katrina a lot of federal dollars poured into New Orleans to create additional affordable housing stock?
Julius Kimbrough (00:11:24):
This is important because we have seen a few cases in the city of New Orleans where properties have come out of affordability compliance, both multifamily and single family. And in the case of single families, we’ve seen properties that costs 200, sell for 300, 350, 10 years later. We have seen apartment buildings in the urban core that were affordable, that were financed with the various forms of subsidy, whether it be direct subsidy from the city of New Orleans, whether it be a new markets tax credit developed property, they’ve come out of compliance and the developer has said, “Hey, low to moderate income people. We no longer are required to provide affordability. We can make more money by charging market rates for the unit you previously occupied. Since the subsidies expired, we’re going to effectively put the subsidy in our pocket. We’re no longer going to extend the benefit of it to you and we’re going to charge market rates.”
Julius Kimbrough (00:12:30):
Community Land Trust means that we promote permanent affordability. New Orleans has an affordable housing crisis now and we haven’t lost many units to these temporary affordability standards. But imagine if we begin to take units out of compliance in large number on top of the growing need for additional units.
Dan Bitner (00:12:49):
In our last episode, we learned about the affordable housing crisis in New Haven and the 25,000 affordable units required in the 15 town region to meet that need. Karen DuBois Walton, President of Elm City Communities, pointed out that we have to understand the affordable housing crisis is connected in part to the deterioration of wages. Julius Kimbrough makes the same point about the affordability crisis in New Orleans.
Julius Kimbrough (00:13:13):
There’s endless supply, endless demand for affordable units at this point in time in New Orleans. And when you couple that with a lack of wage growth for the average New Orleanian, you have a recipe for disaster. The new New Orleanians who had been critical to rebuilding the city and in the case of the education arena, critical to raising test scores, critical to creating new schools, improving education standards, they in part drove the 50% rise in the cost of housing. From 2000 to 2015, both the cost of purchase and the cost of rent increased by 50%, but the average wage for the average New Orleanian and the average New Orleanian is going to be an African American person without a college degree, hasn’t gone up very much. We were created as a CLT to promote permanent affordability to mitigate some of the undesirable effects of gentrification.
Julius Kimbrough (00:14:20):
I always say that gentrification is not the dirty word. The dirty word is displacement. Who doesn’t want to see their property value rise? If you own property, who doesn’t want to receive higher rent, higher incomes, and that’s black and white. I own a home, I’d like to see my property value rise. I have many friends, their families own property in urban core, that property in the urban core that used to go for $500 is now going for $1000. That’s the creation of family wealth and that’s a good thing. The bad thing is when wages don’t increase, but the cost of living does go up, which is driven by supply and demand pressures. A lot of people think of capitalism as this nebulous, mysterious thing on Wall Street or in New York or in Silicon Valley. The reality is personified; capitalism is walking down your street and the capitalists buys your house.
Julius Kimbrough (00:15:27):
It’s the house next door to you and they fix it up and they make it nicer and they raise your property value. But then they raise your taxes and if you are a New Orleanian who works in the service industry, it’s quite possible that your wages top out by the time you’re 30 and if you owned a home and your taxes go up, your insurance goes up, that’s good for you, your personal wealth goes up, but it also means you have to pay more than you were paying when you bought the house. This has meant that the urban core, a lot of low to moderate income people overwhelmingly who are African American are being displaced from the urban core where the culture of New Orleans is being incubated, where families had stability. They may not have been particularly wealthy, but the rent made sense given their income and families lived in various neighborhoods and parts of the city for generations. You began to see neighborhoods destabilizing.
Julius Kimbrough (00:16:16):
The challenge is when you are displaced from that home and when those neighborhoods are destabilized and community businesses and social aid and pleasure clubs and the other organizations that have the anchors in neighborhoods are displaced.
Dan Bitner (00:16:33):
Val Orselli from the Cooper Square Mutual Housing Association and Community Land Trust, remembers similar kinds of pressure in 1990s, New York City.
Val Orselli (00:16:41):
Throughout the Lower East Side, the housing market here was going crazy, so crazy in fact, for example, that the New York Times did a survey around that time and it found out that after you exclude the rent stabilized housing, the public housing, but if you exclude those apartments, if you were to try to rent an apartment in a walkup tenement, I mean it’s a five story building with no elevator, okay, and frequently with a bathtub and a kitchen, which was advertised as a French tub as an amenity. In other words, the asking rent was higher than an apartment on the Upper East Side of Manhattan, which is a higher income neighborhood with a gym in the basement and a doorman at the front door and all the amenities.
Val Orselli (00:17:26):
Because this neighborhood has always been a focus of attention. If you look at the map of a Manhattan with the southern tip, you have high rise buildings, skyscrapers, Wall Street. And then you go further north. You have Midtown with more banks, advertising industries and so on and rest back in the middle is like the Lower East Side. It makes for a perfect bedroom community for people who work in Midtown or work in Wall Street. The pressure here has been humongous, going back even before the 1990s
Dan Bitner (00:17:58):
Cooper Square Committee, the parent organization of the Cooper Square Community Land Trust, has a history that dates well before the 1990s. In 1959, the Cooper Square Committee formed to oppose the city of New York slum clearance plan. Throughout the 1960s the Cooper Square Committee built coalitions, held demonstrations and spoke out at public hearings against the Robert Moses Urban Renewal Plan. In the late 1960s, the Cooper Square Committee’s members created a community based plan known as the Alternate Plan, which established basic principles that are still relevant to the neighborhood. Displacement must be minimized. Development must be carried out in stages and site tenants must have first priority for the housing that is developed. On February 13th, 1970, the Cooper Square Committee’s alternate plan for the urban renewal area was adopted as the official plan of the city of New York for the urban renewal area. By defeating the city, CSC’s founding members preserved over 300 buildings and prevented the displacement of several thousand people including families, senior citizens, artists and art organizations.
Val Orselli (00:19:08):
There’s a long history to the Cooper Square Committee, which is the parent organization that created us. But essentially the Cooper Square Committee has created an alternate plan for the Cooper Square area, making residents beneficiaries and not the victims of urban renewal. And after many years of delays and lack of adequate financing for new construction, two projects were built and occupied around 1985. But in the meantime, at our insistence, the buildings that were due for a renewal designation having kept fully occupied initially by the original site tenants and starting in the 80s by homeless families. We were faced back in ‘85 with buildings that had been deemed worthy of demolition back in the 70s and full of low income tenants and no prospects for new construction. That was at that point in the 80s, we had Mayor Koch and he was pushing, what he called economic integration, which meant building market rate housing in low income neighborhoods.
Val Orselli (00:20:13):
It didn’t promote that from the opposite side, building low income housing in upper income neighborhoods. It was a one sided economic integration, which we opposed and we were able to block. But we also were faced with the fact that while we could block any city initiative that we did not support, we did not have the funding to do something with our buildings that were in deplorable condition being managed by the city. So the community got together in the late 80s after we did the two new construction projects and came up with a revised plan for Cooper Square. And the revised plan came in the form of an offer to the city in which we allowed the city to develop largely market rate housing on two largely vacant lots on the north and south side of Houston street in exchange for 25% of the new units to be for low income families, prioritizing our people and also sufficient funding to renovate all XXX renewed buildings in our neighborhood, at no cost to the tenants.
Val Orselli (00:21:18):
We agreed in principle, the mayor agreed in principle and the city had asked us under what program would you like to have your buildings renovated? But we didn’t like any of those programs because essentially the end result was that after renovation was completed, what you got as a result is the individual Housing Development Fund Company, HDFC co-operative, made up of say 15 tenants of low income that in the long run, because after a building has been renovated, 20 years later you’re still going to need to put a new roof or a new boiler or do major capital improvements, which would drive the cost of the housing. We’d be on the affordability level, low income people, the average income here being 15,000 per year. So we said we don’t want that. And we wanted to come up with a new concept and a new concept was the creation of the Cooper Square Mutual Housing Association and the Cooper Square Community Land Trust.
Dan Bitner (00:22:12):
Let’s review some basics about the CLT model. A key aspect of the traditional CLT model is the separation of the housing ownership from the land ownership. But how does that actually work? Again, Julius Kimbrough from Crescent City Community Land Trust in New Orleans, breaks it down.
Julius Kimbrough (00:22:28):
The community land trust model is meant to promote community assets. It’s meant to promote stability. It is meant to promote permanent affordability. And in the case of New Orleans, we’re trying to maintain neighborhood integrity. We’re trying to promote and maintain the culture that drives the city, drives our tourism industry. The culture is the people, we’re trying to help people stay in the neighborhoods that their actions expressed they want to be in historically and still want to stay in. The way you do that with a traditional community land trust property is this - the Community Land Trust, the CLT, owns the land on which the house sits and we sell the improvements to the homeowner.
Julius Kimbrough (00:23:06):
You can think of that in a number of different ways. Let’s talk about numbers for a second. Let me start with a market rate house. Market rate house, let’s pretend it costs $200,000 you have 10% down, which is $20,000. You go borrow the other 180 and the house is yours. With a soft second mortgage house, the same $200,000 house - but you have to come up with 3% down in order to buy that house and the bank is willing to lend you $150,000 against that $200,000 and so that means that City of New Orleans through one of these federal programs is going to make you a soft second mortgage, $47,000. So you’re going to have a $3,000 down payment. You’re going to get a first mortgage of 150 and then you’re going to get a soft second mortgage of $47,000. That soft second mortgage is going to have a compliance period. At the end of 10 years, you will earn the value of the soft second; if you do not move, then you suddenly have 25% equity in your home.
Julius Kimbrough (00:24:18):
Now the CLT house is a different animal. The CLT house is designed to promote neighborhood stability. It’s meant to create a community asset. It still costs to develop that house $200,000. That’s the cost of development. But we’re not going to sell it for 200; we’re going to sell it for 150. That $50,000 instead is going to be used to purchase the land underneath it. That means we can then sell the improvements for 150. It’s the least expensive of the three types, which makes sense because you’re getting a lesser value. You’re not getting the land, but if we’re in a gentrifying or a neighborhood of opportunity, you enter at a lower price, you enter at 150 rather than either the first two homeowners who are entering at 200 and you get to enjoy the same quality of life benefits that come with a common gentrifying neighborhood.
Julius Kimbrough (00:25:14):
The things we think of as amenities in a gentrifying neighborhood, you can take a community land trust property, a traditional single family community land trust property and pass it on to your children. Same as you do with the other forms of ownership that we’ve talked about. Typically, a community land trust property does have an income test whether that AMI that’s being targeted is 120% of area median income, 100%, 80%, 50% whatever the case. The first member of, the first household, first generation of that family has to meet that income test. Once you pass on that home to your heirs and you pass it on the same as any other property, they do not have to meet that additional test. But that family is also enjoying the growth in the asset value, that is the community land trust home. Because the community land trust owns the land, when the resale does happen, whenever it happens, whether you pass it off to your children or whether you sell it yourself, we make a point to not allow the new price that is set to go to the full blown market price.
Julius Kimbrough (00:26:22):
Because remember the point of the land trust to begin with is to create permanent affordability. That is not to say that to freeze values because that would hurt our buyer who owns community land trust, but it will also hurt the other buyers in the neighborhood. They’re the market rate buyers in the traditional affordable buyer who has a soft second mortgage on their home. Prices do rise and value equity is built up in a community land trust property, it just doesn’t grow at the same rate as in the other forms of ownership. And that both slows down the growth of prices potentially in the whole area and obviously it maintains permanent affordability for that particular house.
Dan Bitner (00:27:10):
To review, by severing the relationship between land and property on the land and having the land underneath all of the units be placed in a community land trust, the price of the property is lower. When the time comes for a family to resell a home, they only sell the structure to the next family. The CLT maintains the ownership of the land in perpetuity. In this way, the home or apartment can remain affordable for the next family despite any relative fluctuations in property value due to outside factors including gentrification.
Kate Cooney (00:27:40):
Julius and Dan have described the basic model for a CLT. A single family home or development for which the land is held in a land trust, but the housing improvements on the land, i.e. the house, are available for purchase at a reduced price, tagged to overall market prices, but discounted. One of the reasons that Val Orselli and his colleagues at the Cooper Square Committee received so much attention for their work on the Lower East Side, is that they have iterated on that model in their development of a scattered site CLT that includes over 20 buildings, which contain a mix of commercial and residential units that they have kept deeply affordable in the center of one of the hottest housing markets on Planet Earth. Here, he describes how they got going and how it works.
Dan Bitner (00:28:28):
Val Orselli in New York.
Val Orselli (00:28:30):
We convened a series about 30 to 40 membership meetings, tenant meetings, building meetings, workshops, all kinds of interactive activities with the community. What came out of it was the idea of creating what’s called a Mutual Housing Association, which a housing association takes care of the cooperative ownership although it could be rental as well, but they said you’re a cooperative ownership. And instead of being one building, we brought in something like 20 and now has since grown to 21, and we’re going to be growing to 23 in the next month or so, into a single cooperative structure, what you refer to as scattered site co-op. Okay. And by doing so, by bringing buildings from East Third Street, from East Fourth Street, from Second Avenue, from Stanton Street into a single cooperative structure, we created what’s called an economy of scale.
Val Orselli (00:29:22):
So in the scenario that I mentioned previously where a building is renovated but 20 years from now, it needs a new boiler or it needs a new roof or something, the money for the rehabilitation does not come from the 15 tenants of that building. It comes from the nearly 400 tenants in all their buildings put together. The tenants who are paying what we call an economic rent, what is needed to maintain the building plus a little extra that goes into the reserve fund, plus and this is significant, the sharing of commercial income. In that model, the commercial income is shared amongst all 21 buildings. So that helps us to keep the maintenance fee or the rents as low as possible for the bill to level ranges from 25% to about 35% of AMI. And 30% is like the golden rule; that’s basically people getting paid minimum wage. So we go below that and then we go a little bit above that, but still pretty affordable.
Kate Cooney (00:30:26):
It’s a bit complicated. But they had seen the single site model for cooperatives fall apart.
Val Orselli (00:30:30):
From experience with many so-called HDFC co-ops, they started out good with a lot of minority people represented in the tenancy. But over time, the tenancy changes drastically and the building that was largely black or Hispanic with a few white people, all of a sudden it was upper income white because apartments were being sold under the table, apartments were given to people who were not eligible. And also, even on the more pragmatic end, the boards of directors for the HDFC do not fulfill their fiduciary responsibilities, do not pay the taxes, do not properly maintain the building, do not implement the rent increases to keep up with the costs of the building and there were no longer low income.
Speaker 2 (00:31:14):
This next part gets technical, but that’s what you’re here for, right? To learn about what’s possible. So let’s go through it.
Val Orselli (00:31:22):
So the idea came from these meetings to create what we call the Community Land Trust. We wanted after renovation that the buildings be conveyed to the Mutual Housing Association for ownership, whether the land be conveyed to the community land trust and subsequently the CLT leases the land to the Mutual Housing Association or to the HDFC, depending on what building we’re talking about. And by doing so and by having ownership of the land, the CLT has actually one third of the boards of the Co-op is appointed by the CLT. We have representation on the board of the Mutual Housing Association and we also had the power of stewardship. If the Mutual Housing Association were to break the rules, the ground lease and the regulatory agreements by not paying their taxes, by not maintaining the property, by trying to sell apartments under the table or whatever, the CLT has the power to remove the MHA board and appoint replacements to bring the Co-op back into conformity with the rules, because we own the land and that serves as a deterrent to speculation. Also, on the legal end, if someone wants to sell an apartment under the table to a third party for $500,000, the buyer will have a lawyer and the lawyer will tell them to first requirement is that you have to have clear title and when they do a title search, you’ll find out that the MHA owns the building. But that the land is owned by the land trust. So any illegal transaction will cause the tenant, the purchaser, to lose his money and we can take back the apartment. So that’s an additional deterrent to speculation.
Dan Bitner (00:33:14):
Like Val Orselli in New York, Julius Kimbrough is iterating on the traditional CLT model.
Julius Kimbrough (00:33:19):
The CCCCLT is an evolution in the community land trust model. We are not focused on a single neighborhood, we are not focused on a single town, we are doing more than the traditional single family community land trust home. We are into mixed income, we’re into commercial. Any neighborhood where you see housing values going through the roof, you are also seeing commercial properties and values and prices and leases going through the roof and so those commercial spaces support the people who are in, who live in those neighborhoods. If we’re subsidizing the housing, then we need to subsidize the commercial as well, for all of the reasons I already mentioned.
Dan Bitner (00:34:02):
One of Crescent city CLTs buildings is the Pythian. The building has an extraordinary historical legacy, from its construction by the colored Knights of Pythias in 1909, the Pythian building has been integral to civil and human rights for over 100 years. It was seminal in the development of jazz and was likely the first place that a 12 year old Louis Armstrong ever performed publicly. For two generations, the building stood out as a monument to what is possible in the face of institutionalized oppression during the Jim Crow era. Let’s hear more about the role CCCLT played in the redevelopment of the Pythian and the way stewardship operates when the CLT does not own the land as it would in a traditional CLT model.
Julius Kimbrough (00:34:46):
We have one development called the Pythian in New Orleans, which is a mixed income mixed use building. It’s nine stories tall, it’s subsidized with the new markets tax credit and historic tax credits. And this building has six stories of residential, including 25 units of permanently affordable apartments. And then it has three floors of commercial space. The first floor is a food hall with 14 vendors, approximately half of whom are people of color or women owned businesses. The second floor is an entertainment space, a venue. The third floor has a federally qualified health care clinic and a physical therapy clinic that is owned by a female entrepreneur. In the case of the Pythian, we do not own the land underneath the Pythian. We own a piece of the development entity that owns the whole building. What that means is that we came into the Pythian project fairly early in the development process.
Julius Kimbrough (00:35:47):
We made an investment on behalf of our goal of creating affordable housing in close proximity to the major employment center in an area with great amenities and resources, a grocery store around the corner. The Pythian building itself is extraordinarily bike friendly, it has a bike wash. It has a shower so that if you ride your bike to work, you can park it inside the building, wash your bike if it got muddy, and then take a shower yourself and then go upstairs to go to work. The public library is across the street. The regional train station is around the corner. The famous New Orleans street car runs in front of the Pythian. It is extremely accessible to quality of life amenities, to employment; it’s across the street from City Hall. So everything one might want is in walking distance from the Pythian. Because we took that risk early on, we were able to structure a transaction where 25 of those 69 apartments are permanently affordable. And in addition, we own approximately 9% of the building, so that means we’re going to have an annual income stream as an owner.
Julius Kimbrough (00:37:01):
The building is mixed income and so some might say to themselves, well, are the philanthropic dollars that came to CCCLT supporting market rate activity? And my easy answer would be no. Our investment supported the multifamily, permanently affordable units in the building. That being said, we will enjoy income from the mix of units from the commercial, but our participation in the building has helped mean as an FQHC, Federally Qualified Healthcare Clinic, in that neighborhood, in the building. Our participation has meant we’ve been able to assist small businesses grow their footprint and by extension grow their wealth. We do not have designated affordable units within the Pythian. If there were designated units, we think that would be a bad thing. That would be the ghettoization of the community land trust units, the subsidized units within the Pythian. We’re not doing that. We’re trying to create opportunities for people across income spectrum, across lifestyles to meet at the Pythian. There are a variety of uses in the building; there are a variety of incomes and we want it, we work in to intentionally promote that cross pollenization.
Kate Cooney (00:38:22):
You’ve talked about at the Pythian, you have set aside a certain number of affordable units that are going to be permanently affordable, much in the spirit of traditional Community Land trusts; however, you don’t own the land. So what is the mechanism through which those units are permanently affordable?
Julius Kimbrough (00:38:39):
At the Pythian specifically the mechanism is called a predial servitude. You might pronounce it differently, a pre-dial servitude, I’ve heard people say. It is a mechanism so that the affordability runs with the land comparable to a deed restriction. But given that deed restrictions are typically put in place when a property is transacted, we’re not transacting the Pythian. And so we couldn’t go back and put a deed restriction in place. We are putting in place what is called a predial servitude. Our expectation with our next Pythian-like project is either that we do go to a deed restriction or that CCCLT through capital raising and structuring our business just so, are in a position such that we have control of the entire development. We own more than 10% of it. We are the majority owner. We’re the 100% owner. Developing permanent affordability at the Pythian has been a real learning experience and the next step for us is to be the lead developer and to own a majority or 100% of the next mixed income mixed use project that we do of that nature.
Julius Kimbrough (00:39:52):
A project like the Pythian which pays the CCCLT a return also gets to our sustainability. I’ve seen five traditional community development corporations go out of business, at least five, in New Orleans since Katrina. The CLT is a more specific version of a community development corporation and so we run the same risk. We know that people think about the Pythian and are paying attention to it. We are happy that they are looking at the Pythian to some extent as a model and we encourage them to do so.
Kate Cooney (00:40:25):
The Pythian deal is innovative. It features a blended capital stack incorporating new market tax credits, CLT equity investment, alongside traditional bank financing to create a building with mixed income rentals and multiple floors of commercial space including a health clinic and a food hall featuring a mix of well-known local chefs and food truck operators getting their first big break. More than all that, it renovates and restores an iconic building to the city in a way that resonates with the building’s history as a place to build fraternity and comradery. While the Pythian is inspiring to many of us, we wondered what models nationally does Julius have his eye on as he looks to the next chapter of the Crescent City Community Land Trust.
Julius Kimbrough (00:41:13):
There’s an organization in Denver called the Urban Land Conservancy. And what I like about what those guys are doing is they were very well capitalized from the outset in terms of equity. And so they are able to spend the pre-development dollars that are required to think through a real estate development in advance. And they were also set up with a partner loan fund that is on the ground in Denver, operated by lenders who understand the Denver market, who can talk regularly with Urban Land Conservancy and understand what they’re thinking about as they think about making acquisitions and why; that loan fund has the ability to lend to other parties than Urban Land Conservancy. But when it does lend to Urban Land Conservancy, it does so at reduced rates. Urban land Conservancy is different from CCCLT in that they focus exclusively on commercial projects and so within their portfolio they’ve got apartment buildings, they have schools, they have other large commercial CLT activity happening. And they control their projects.
Julius Kimbrough (00:42:26):
They may have partners, but I think they’re generally in the ownership or catbird seat, if you will. I was just at a conference and I met another CLT, a new CLT launching in Colorado and they’re going to focus on single family CLT housing. They’ve been capitalized to the tune of like $27 million. And their model is they’re going to go to like multiple cities and they’re going to say, “Hey, we’re going to work in this neighborhood and you local government have to match what we’re doing in dollar terms and we’re going to create critical mass in multiple places very quickly.” In both cases, Urban Land Conservancy and this other more traditionally focused yet not single family housing focused CLT in Colorado, they are both well capitalized from the outset, they have a good business strategy, they won’t go in unless they have a good relationship with their local government partners; they have a good relationship with their corporate partners and the market understands the need for what the CLT does, why it makes sense and why it’s needed.
Dan Bitner (00:43:42):
The money to acquire these properties has to come from somewhere. So let’s pause for a minute to discuss the various ways in which CLTs are funded.
Julius Kimbrough (00:43:49):
Government has access to a lot of subsidies and other resources that we leverage to do what we do. There are tax abatements, there are bonds, there’s low cost debt, there are a number of ways that government can support the sort of work we do. Another way with the Housing Authority of New Orleans, has project based vouchers and you can get an allocation of project based vouchers for a multifamily building in that predictable income stream that allows you to go borrow against that income stream to finance a project. But all of this requires pre-development dollars and all of this requires the money to acquire property. Capital takes multiple forms. There is cash, there are ideas and we are literally in the business of converting cash and ideas to permanent affordability. And we need those pre-development dollars. We know that we need those acquisition dollars and that is a role for philanthropy.
Kate Cooney (00:44:56):
And that traditionally has been a role for philanthropy, whether in pools and partnerships or as a single source provider or the public sector who can help lower pre-development dollars by ceding buildings to CLTs. We asked Julius Kimbrough about the potential for OZs to provide this equity for CLTs. In his opinion, the Opportunity Zone does not pair well with the equity pool he is trying to develop because he can’t keep the equity,
Julius Kimbrough (00:45:26):
The opportunity zone money is meant to be paid back. And so as it relates to a community land trust model, it’s still possible to use the opportunity zone funds, but that just means down the road we would have to find funding to replace the opportunity zone funding when the investor asks for it back.
Kate Cooney (00:45:45):
We will return to the role of OZ funds and CLTs at the end of the episode. Staying with the sources of funds question, we asked Val Orselli about how they approach the need for scale capital.
Val Orselli (00:45:57):
It is incumbent upon us to grow in order to maintain the affordability of the housing. Because even if you factor in the economy of scale that we purchased, for a discounted rate, and we purchase supplies at a cheaper price and so on, price is still going to keep going up. And either the income coming into the CLT and the MHA increases by expansion or we have to raise a maintenance fee, which, if we’re gonna support a low income community, that’s not the way to go. So we need to find additional properties. One alternative which we are exploring is trying to acquire church owned property, religiously owned properties that currently as church membership or practicing religious folks decline in this community, the archdiocese in particular, but not just a Catholic archdiocese, other religious groups as well, are selling their close properties for basically luxury condo development.
Val Orselli (00:47:03):
And we’re engaged in a major struggle with the archdiocese regarding one building in particular, Nativity Church, which the archdiocese wants to sell for $50 million. We offered 18.5 million but that didn’t come close to what they wanted. Because it was a church with Dorothy Day used to go and pray on a daily basis. Dorothy Day was a co-founder of the Catholic Worker and she particularly was supportive of housing for homeless people, for poor people. Her property here, the Catholic Worker property was always open for people who are homeless. The Catholic church in the process now of canonizing her basically have her be recognized as a Saint and to have a church building be redeveloped for luxury condos is abominable to us. In terms of city owned properties, if we’re looking at a pipeline from properties, but to date the city has not prioritized disposition of such properties to community land trust.
Val Orselli (00:48:06):
In fact a number of buildings that we would have liked to have taken over and were city owned were conveyed to a developer that has no use for a CLT. But we’re looking at other possibilities including failed HDFC Co-ops and the number of those properties are failing and we’re hoping to be able to take some of them over. We’re also looking to other properties owned by other departments of the city, like Department of Transportation or Sanitation or any properties which are largely underutilized. And last but not least, we’re also targeting tax lien and sale buildings. There’s an extensive number of buildings that are not paying their real estate or real estate or water sewer taxes that we’d like to have the city prioritize for disposition to community land trust.
Val Orselli (00:49:00):
That has not happened as yet, but we’re pushing it. It’s a convoluted legal process and ultimately it would put us into competition with private developers who would like to take over the property, assuming the landlord does not pay the taxes and retrieve his building, but there could be legislation passed that would prioritize disposition to community land trust that would help to ensure a permanent affordability, the more of those buildings we could take over then we really would have an economy of scale.
Dan Bitner (00:49:33):
Providing affordability is the tip of the iceberg in what community land trusts can offer. CLTs are concerned with their communities beyond establishing and maintaining affordable housing or low rent business spaces. They’re advocates for the community and their efforts can span from aiding an installation of residential solar energy to senior care advocacy. They can also identify opportunities for political change that benefit local residents. Some states have established spot blight eminent domain programs where trusts can remove the blight, which is reported to them, or vacant property receivership programs which funnel available properties to trusts to develop or preserve. CLTs can argue for changes to current zoning laws within their communities to allow for development or green space rehabilitation.
Kate Cooney (00:50:19):
Speaking of green space, there are a lot of options communities in CLTs should consider. I’ve seen examples of community gardens, the beginning of a tree farm, a vineyard, or even designation of the green space for the city’s water runoff. That is an especially interesting opportunity for CLTs who could utilize additional sources of revenue or recurring cashflow. The premise is that cities could redirect the rainwater runoff typically associated with an overburdened sewer system to a CLT owned greenspace. For that privilege, the city would provide payment to the CLT.
Dan Bitner (00:50:56):
Simply stated there are no shortage of ways in which CLTs benefit the communities they serve beyond the establishment of additional affordable housing, but we also know that the model must be adjusted to the communities within which they’re established. Let’s shift gears and think about what those adjustments or approaches may look like in New Haven. After all, this is the CitySCOPE podcast.
Dan Bitner (00:51:18):
I’d like to tell you about a neighborhood called Newhallville. Their total population is much smaller scale, certainly than what you’re used to sitting at about 6,000, about 2,600 total housing units, but 62% of the residents there are cost burdened. And for those listening, that means they’re paying more than 30% of their income solely for housing. And then 95% of their population is either in poverty or considered low income for the area. One thing that sticks out to me is that within this property they have about 50 … what’s called silver lots. And these silver lots are areas that have been zoned where they cannot be used for development, right? But over the years that’s become properties, kind of full of blight or in poor condition. What would you think about rehabbing or taking away some of that green space? What strikes you about those statistics and maybe how a CLT could help?
Val Orselli (00:52:16):
First of all, you might want to take a look at the zoning to see whether some of the zoning can be changed to allow for higher density housing, not just single family homes and stuff, to create additional low income housing where there’s land to be developed. You can create a Mutual Housing Association and a Community Land Trust with single family homes. The same rule would apply. So if they clustered together, they would be able to share income and expenses. They could go for a rental model or they could go for a cooperative model. Again, that depends on what people decide. They need a combination of community organizing and community planning, one alone would not be sufficient because there’s a lot of questions that would need to be answered, what it would mean for the residents in terms of any new development, what are their rights? If you’re going to be part of a cooperative model, you’re going to have to give up some rights in order to benefit the cooperative as a whole.
Val Orselli (00:53:18):
And then some ideas I saw floated in Far Rockaway, that’s what I also tried to establish a co-op in which some of these two family homes, they would be allowed to develop the ground floor space for commercial properties and therefore help to generate income that way. So that would be another possibility to bring in income. And of course the ultimate thing is, in order to really be affordable the housing has to have a small a loan burden as possible, because loans that have to be repaid translate to higher maintenance fees or rents. Our buildings essentially are mortgage free where the only mortgage that we have is what’s called an enforcement mortgage, that as long as the rules are followed, they don’t have to be paid back, unless you break the rules. If you break the rules, then the mortgage comes due and payable, which in that case will be like $21 million. So people are not interested in defaulting on that.
Dan Bitner (00:54:17):
I kind of want to stay just with the idea of the vacant lot because I haven’t yet asked you about how you think about green space and either if you have, what experience you have in green space, if you’re just trying to do community gardens or I’ve read previously that, you can do rainwater runoff, especially in urban environments as another kind of revenue generating mechanism for the trust, or should you just develop more housing?
Val Orselli (00:54:44):
There’s always been in our neighborhood here and in surrounding neighborhoods, a certain amount of push back and back and forth between gardens and housing. In the 1970s in our neighborhood, there was a policy that was implemented by the city under Roger Starr of planned shrinkage, but essentially using a medical model or triage applied to the urban context what Roger Starr said is as a city de-industrializes and there’s no more jobs for working class people in that area, what’s wrong with pushing it back into the countryside where they came from. Of course there is no countryside to go back to, so in practical terms during the serious fiscal crisis of the 70s, the city cut back services to low income communities like East New York, South Bronx, Lower East Side by around 25% or more.
Val Orselli (00:55:40):
That means fire protection, police protection, so we had a proliferation of buildings that were torched during that period, most frequently by landlords trying to collect the insurance of the building because they were not getting the money from the rents. Years passed and those big lots became gardens and then when the city finally came around to the idea of using some of those vacant lots for housing, there was a conflict between the people that want to keep them as gardens because they had the housing and people who wanted to push for the housing. What worked best is where both sides approached the issue from a spirit of compromise. One of the very first urban gardens in New York City is located at the corner of Bowery and Houston Street. It’s called the Liz Christy Garden. And that they grew and there’s a beautiful, beautiful garden. And then when time came to implement the Cooper Square revised plan, which called for new construction on both the north and south side of Houston, e were contacted by the green gorillas. They’re the ones who were in charge of the garden. And they told us, “Look, we understand the importance of developing affordable housing so we will not stand in the way even if we have to give up the garden. But if we can do a compromise we’d like to work with you.” And in that spirit we worked with them and not only the garden was preserved, but it was actually expanded. We found a way to make it even bigger. So that was a real win; we called it “bread and roses” because the community needs both.
Speaker 2 (00:57:13):
CLTs can be complicated to explain and to understand. There is a community ethos to them that runs counter to the individualist notions of success and wealth building and requires ongoing community organizing to support. Val Orselli at the Cooper Square Committee talks about the central role of community organizing in their work.
Val Orselli (00:57:34):
The three major priorities are organize, organize, organize, otherwise they are individual voices; they not going to get anything from city government or state government.
Dan Bitner (00:57:45):
I mean that makes sense and I think that’s very powerful, especially given the fact that the communities that need this help are essentially their voice is really their primary resource. Would that be correct?
Val Orselli (00:57:57):
Dan Bitner (00:57:57):
I know that sometimes it can be, I think hard for tenants to understand that they’re not going to be able to go into a unit and develop some of the same equity as a traditional homeowner does. Has that been accurate?
Val Orselli (00:58:10):
Yes and no. As I mentioned to you, our model was adopted by a community after much consultation, debate back and forth. We also had living in one of the buildings in different new buildings, a gentleman who became a councilmember who was talking about, “I have the right to the piece of the rock and why shouldn’t I be able to sell my apartment for whatever I can get for it?” But the majority of the community that was working class people, low income people, they were more than satisfied to have an affordable apartment. There’s nothing comparable outside of our project here. We charged less than the state charges for public housing apartments. So they bought into it and it has worked very well. I mean, we’ve been around more than 20 years and the housing has remained overwhelmingly affordable.
Val Orselli (00:59:03):
The problem that we didn’t fully factor in of course is that, even after 20 years, our people have aged, some have passed away, some of them moved on to someplace else and there’s a new generation of people, either the children of the tenants or people that came from the outside by way of the lottery that we implement for whenever we have any significant number of vacancies. And those people are not part of the struggle, those people didn’t have real knowledge of it and didn’t necessarily buy into it. So there is an undercurrent is saying “Why can’t we sell the apartment? I love the MHA I think it’s a great thing. We love to read about it in the papers, but why can’t we make some money out of it?” Well the answer is if you make money, if you make a financial equity out of it, the next occupant will not be low income, okay.
Val Orselli (00:59:50):
What we promote instead is what we have called social equity and that is by keeping the maintenance fees or the rents because we are a non-eviction coop, able to salt away money for other purposes, namely a better education or healthcare or travel or even to pursue a career that doesn’t pay very much but satisfies your emotional and personal needs or even start your own business. We’ve had several tenants who have started their own business here because they were able to save money that didn’t have to pay for the maintenance fee. Given also that the city paid for the entire cost of the renovation, okay, it seems fair that they understand that we need to maintain the building on the basis of social equity and we have mechanisms in place to provide for that. When a shareholder wants to sell his or her apartment or the shares of the apartment, they don’t seek out the purchaser.
Val Orselli (01:00:47):
They sell it back to the co-op who then finds the owner and whatever they pay for the apartment, that would be say $250 or now we’ve raised the amount of $1,800, is what they get back. But there is an undercurrent nevertheless, so we are in the next year or two, we are hoping to engage in some intensive educational work with our tenants and with our young people to help them understand our model and also to help them to develop leadership skills so they can be the new generation of leaders for our community.
Dan Bitner (01:01:20):
It makes sense that you have to kind of reeducate, but it is very interesting to think that individuals, why wouldn’t they be on board, right? I think that’s, it makes sense that that was somehow unanticipated. But what else has, have you really seen change since the inception of the CLT kind of bringing us forward to today? Any other kind of unanticipated challenges or just the way your organization’s received or embraced in the community?
Val Orselli (01:01:50):
Well, the Cooper Square Community Land Trust at this point is the sole fully functioning community land trust in New York City. And we’ve been around for over 20 years, so we’ve been trying to share our experience with other groups that want to start the CLTs around the city. I’m working with the East Harlem Community Land Trust. We are also working with folks in similar [??] towns, trying to start the Community Land Temrust in Chinatown, but there’s a lot to learn still and it’s, the city has embraced the community land trust. They speak favorably of a community land trust. But to date they have not invested any of their own money to CLTs.
Dan Bitner (01:02:28):
This just brings up another great point, which is kind of when you’re moving to this educational kind of a mentorship role to get some of the other communities involved in developing their own trusts, what is the first advice you give to them?
Val Orselli (01:02:43):
First of all, I tell them that land trusts are not a panacea. It’s not like you’d take our project here, which is successful and you go to East Harlem, and say okay, this is what you got to do. And you’ve got yourself a land trust. You try to do that and you’re going to fail. What we tell people is, you need to discuss the reasons why they want a land trust or Mutual Housing Association; do you need to get the feedback from the community? They may not like this, they may not like that, they may want to know what if I have a son whose living with me and we’re overcrowded, how does he go about getting an apartment of his own? Does the tenant selection criteria have to be expelled [??] ? They basically have to create their own community land trust based on local conditions. It’s not like a single model fits everything.
Dan Bitner (01:03:33):
We were incredibly fortunate to have learned from both Val Orselli of Cooper Square Community Land Trust and also Julius Kimbrough of Crescent City Community Land Trust. As we wrapped up our interviews, we offered each of them an opportunity to share any other advice that they had for our listeners.
Julius Kimbrough (01:03:49):
We can show government, we can show different actors that there’s a different way to get things done. In our case, we’re talking about promoting permanent affordability, we’re talking about efficiency from a public policy perspective, we’re talking about neighborhood preservation, stability, we’re talking about cultural preservation and growth. We think all of those things are worth investing in and we want to be one of the vehicles to promote a different form of public policy in the way that we live and execute and organize our neighborhoods.
Val Orselli (01:04:21):
To condense everything I said in just a few words, we will not have permanently affordable housing until we find a way to decomodify the housing. As long as housing is deemed as a commodity, it is going to be hard to make the argument that’d be making it about social equity, but I think the argument can be made by keeping it affordable by curbing the profit motive and that is almost like a paradigm change that’s required. We know it’s not going to be easy, it might not even happen, but if we’re going to provide the affordable housing, that’s the way to do it.
Dan Bitner (01:05:02):
Given what we’ve discussed today, there are several key takeaways we should highlight. CLTs are organizations which can anchor and expand affordable housing, low rent commercial interests or community green space. They can be fantastic tools for inclusive economic development because they’re so adaptable to the needs of the community and its residents. They aren’t one size fits all and careful consideration should be given to their implementation including substantial buy-in from the neighborhood and surrounding municipalities. That’s part of the reason we’re looking into CLTs within the broader context of opportunity zones to find ways for communities to leverage outside investment to begin these NPOs. Julius Kimbrough had a strong position on the combination of CLTs and opportunity zones.
Dan Bitner (01:05:46):
I completely respect that point of view, but in the case of Newhallville, I think there is a possible intersection of CLTs and opportunity zones when we think about small businesses, specifically when there are members of the community who want to own their neighborhood change - literally. In the case of CLTs, when commercial space is rehabilitated, it takes the form of storefronts for rent. However, it would still be incumbent upon the future tenant to raise the cap that’s necessary to begin the business. Here’s where opportunity zone funding can help. Small to medium sized investors could be attracted to cover the initial costs of the business opening. Over time, if the business becomes profitable, the investors can execute a structured exit of their position over several years.
Dan Bitner (01:06:31):
Their shares could be bought out by the business owner or other members of the community who want to own a piece of the success. While no skyscrapers will be built with this model, there is nothing preventing this type of investment in quality of life institutions. Newhallville could use a coffee shop, a laundromat, basic retail, or even a family restaurant or cafeteria. CLTs could provide the space and opportunity zone funding could be the catalyst to new entrepreneurship, which otherwise would not have been possible. While they shouldn’t be considered a primary avenue to attract opportunity zone funding, with the right creative financing they can certainly act in conjunction in ways which deliver collective economic benefit for investors and residents. Thank you for joining us on the CityScope podcast. See you next time for episode four when we talk about using opportunity zone funds to expand or start up a business.
Lauren Harper (18:49):
This podcast was recorded in studios at the Yale School of Management, the Yale Broadcast Studio and the Poorvu Center for Teaching and Learning.
Liam Grace-Flood (18:56):
Created by Kate Cooney and the students of the Spring 2019 Inclusive Economic Development Lab class.
Kate Cooney (19:03):
Special thanks to everyone at the Yale SOM studio and Media Control Center: Froilan Cruz, Abraham Texidor, Donny Bristol, Enoc Reyes, and Jessica Rogers.
Kate Cooney (19:12):
And at the Poorvu Center for Teaching and Learning: Brian Pauze and John Harford.
Paul Bashir (19:18):
Audio engineering and production by Ryan McEvoy and Kate Cooney.
Kate Cooney (19:22):
Music from the album, Elm City Trees, composed and performed by the artist, K. Dub. For more information and show notes, visit our website at IEDL.yale.edu.
Camilo Monge (19:36):
Thank you for listening.