Jeannette Torres has been molded by the south side of Milwaukee. She was born and raised around Mitchell Street, currently works with kids in the area, and some of her earliest memories come from running errands in the neighborhood.
"I actually remember walking with my grandma up and down Mitchell Street when it was so beautiful and vibrant and they would have festivals," she says. "We would go and get materials [grandma] needed because she did a lot of sewing at home and cooking."
After moving back from California as an adult, Torres wanted to buy a home and put down roots in the neighborhood she grew up in. A few years ago, she thought she had an understanding with her then-landlord. When he was ready to sell the home, she would buy it.
It didn't happen.
"He sold it from under us. So we had 60 days to get out in the winter," she says.
After staying at her mom's place, saving money and taking home-buying classes, homeownership still seemed distant. Everything seemed just out of reach, and the stability she craved kept shifting from under her.
But after she was introduced to the Milwaukee Community Land Trust, her options opened up. A house was available in the neighborhood she grew up in, was close to her job and was affordable.
"I felt immediately like it was a fit," she says.
Homes that are affordable in perpetuity: how a land trust works
Torres was living a common problem. Homeownership seemed too costly to expect anytime in the near future, as nearly half of U.S. adults reported earlier this year. In Milwaukee County, the median home price rose 8% compared to this time last year, according to the Wisconsin Realtors Association.
In plain terms, the problem the Milwaukee Community Land Trust is trying to solve is that housing is too expensive, particularly for first-time homebuyers. The solution it proposes is to fix a home's annual appreciation to keep it affordable for generations.
Founded in 2017, the Milwaukee Community Land Trust’s model centers around a lease agreement between the land trust and the homebuyer. The agreement is the land trust retains ownership of the land, while the homebuyer retains ownership of the house and improvements.
Homeowners are free to alter the property as they see fit, and pay $50 per month in escrow for needed maintenance. As the Milwaukee Community Land Trust’s Executive Director Lamont Davis says, the result is homes that are affordable and durable.
"Most of our homes that have sold are somewhere between $60-90,000," Davis says. "So that's affordability, but we also need them to be durable. We need them to be mostly free from defects, free from major repairs in the next 10 years."
There are a few other rules as well. Owners or one of their family members need to be occupants, meaning they cannot be converted to rental properties. When the owner wants to sell, they agree to sell the unit back to the land trust at 1.25% annual appreciation.
Other than that, the homeowner is free to do what they please.
"We're not there as a landlord to say, 'Hey, we didn't see you cut the grass. And we're not an HOA or any of those kind of things," Davis says. "Once you buy a home, it's your home."
The cost of affordability
One theoretical downside to the community land trust model is the restriction on sale price. For a homeowner who wants to maximimize wealth generated from the sale of a home, a 1.25% annual appreciation is modest. Davis says this rate is necessary to keep homes affordable for multiple generations, and attracts homeowners who want to live in the property long-term.
Dr. Vince Wang, an assistant professor of real estate at the University of Washington, has researched other community land trust models nationwide. He says that while there is a theoretical downside to a fixed appreciation, it allows people into the housing market who otherwise wouldn't be able to participate at all.
He adds that once your foot is in the home-owning door, it is easier to get into market rate housing if desired.
"We also see about 60% of community land trust owners, when they sell the house they will go on to purchase market rate units," Wang says. "So it can be a jumping-off point from renting to shared equity homeownership to market rate homes."
Wang adds that Davis' theory that a fixed appreciation rate keeps homes affordable in perpetuity is backed by research.
"We also looked at subsequent sales, and the affordability is kept at the same level," Wang says. "So that gives us confidence that perpetual affordability is retained generation after generation."
It takes a village to keep homes affordable
Davis will be the first to say that the Milwaukee Community Land Trust needs partnerships to be effective. The organization only has two employees, and partners with a variety nonprofits and the city of Milwaukee for operational grants, home loans and repairs, homebuyer education and financial planning for prospective homebuyers.
It also currently relies on donations and public grants to cover the difference of buying a home at market rate and selling it at an affordable rate. It has just nine homes in its portfolio currently.
Proud Ground is a community land trust based out of Portland, Oregon. It was founded in 1999, and currently has 614 homes in its portfolio, both in the Portland-area and other counties in Oregon.
Dominique Merriweather is its executive director, a career shift he took on after spending two decades in commercial banking. He says Proud Ground relies on a similar combination of public and private funding to subsidize its homes, especially given its median home price is about twice that of Milwaukee County's.
Sometimes this means making sure developers they partner with are on the same page.
"We often say no to projects where developers are more concerned with when and how they get paid versus building a livable house that a person can create into a home in a community of their choice," Merriweather says. "That's where I get a little itchy and say no to projects that might look good, but philosophically we're not aligned on why we're building."
Portland also offers a cautionary tale for what Milwaukee's housing market could become. Like Milwaukee, Portland engaged in redlining and urban renewal projects throughout the 20th century that disproportionately displaced Black and brown residents, or legally kept them out of homeownership opportunities that generated wealth. Merriweather says this was followed by a speculative real estate market that drove home prices up significantly in the last two decades, which pushed many of today's Black and brown residents out of newly-desirable areas.
"So part of our mission and why we were formed historically was to bring those folks back," Merriweather says. "We've witnessed gentrification of Portland so much it became a TV show."
While Milwaukee's history of redlining and urban renewal mirrors Portland, home prices in Milwaukee are not yet approaching its west coast counterpart. However, Davis says now is the time to act before the wave hits.
"We have to intervene before affordability leaves us. If we're like the west coast where you're trying to buy a three bedroom that's a million dollars, who can do that? So I think it's perfect for us to be intervening now because we don't want this to grow into a bigger monster where no one can afford homeownership," Davis says.
What is the point of housing?
Community land trusts are not a perfect solution to housing affordability. Land trusts in Milwaukee and across the United States require partnerships for services, and often a combination of public and private subsidies to buy homes off the market. Because of this, expansion of the model is limited.
The model also asks homeowners to give up some of their home's appreciation in order to keep it affordable for generations, which redefines financial expectations of homebuying.
But there is evidence of success. Merriweather reports that after 26 years and over 600 homes in its portfolio, Proud Ground has seen remarkable stability.
"Proud Ground hasn't lost a home to foreclosure ever," he says. "I don't know of too many other quasi-government funded programs that have 100% success rate, but I think across the nation you see that most community land trusts' ability to retain homes and keep them out of foreclosure is probably 95% and above. So that, from a model perspective, just resonates success."
Davis rests his case on the ability for his organization to never give up on someone, even those making 30% of the median income in Milwaukee.
"We're serving very low to moderate income households that sometimes people write off and say, 'These people aren't going to make it,'" he says.
Wang notes that with more than 300 community land trusts nationwide, and more internationally, there is a lot to learn from what this model is revealing.
"It's not a silver bullet, but its proven to be a useful and impactful model," Wang says. "I think it has great potential, but there are also a lot of areas for further study and understanding."
For Merriweather, the community land trust model also reveals a bigger truth about the general housing market: when a basic need like housing goes to the highest bidder, it should be no surprise that its expensive.
"We should all be in better agreement that there are just some basic things that folks need," he says. "We had elections last year and whether you were running for president or city council, everyone across the whole United States was saying housing is a crisis. So what are we doing about it?"
Today, Jeannette Torres is enjoying her new home. After she was priced out of homes in California, and kicked out of her Milwaukee rental unit by a landlord, she and her family now have a place that is theirs. Fighting back tears, she said she doesn't plan on selling anytime soon.
"I am grateful for the Milwaukee Community Land Trust because they not only gave us keys, but they gave us hope, stability, and a future that we can build on with our children."
Support for Seeking Solutions: Keys to Homeownership is provided by Educators Credit Union, Greater Milwaukee Association of Realtors and Geis Garage Doors.
