The Little Haiti working-class neighborhood in northern Miami is currently revitalizing, leading to concerns about increased housing costs. Some solutions to gentrification don’t involve subsidizing housing for low-income residents. Consider community land trusts (CLTs), which provide voluntary, private, non-profit organizations that enable lower-cost housing without government involvement.
Community land trusts are private, nonprofit organizations that own land on behalf of a neighborhood and issue leases to neighborhood residents at an affordable rate. By owning the land, the CLT separates the cost of land from the total cost of purchasing a home, lowering the price for prospective buyers and tenants. They primarily use external donations to acquire land. As a provision of their leases, renters are required to use the CLT as their primary dwelling. The board of a CLT includes private community members, consolidating control of neighborhood decision-making.
Gentrification may occur when developers renovate deteriorated properties or build on unused lots in low-cost neighborhoods for new housing and commercial use. The cost of development and speculation may raise the rental rate, thus shifting the residential market towards wealthier tenants. As a result, the residents predating development are unable to afford post-development rental rates and will relocate.
In the last five years, Apple, Citadel, Amazon, and several Wall Street hedge funds have expanded into or relocated to Miami. With the finance and tech industries both growing, developers trying to meet the need for new housing for high-income residents are revitalizing existing rental properties for luxury housing.
Neighborhoods like The Design District and Wynwood, both adjacent to Little Haiti, have transitioned from primarily working-class family to luxury housing. In the last three years, the monthly rent for two-bedroom units has increased by $1,008 and three-bedroom units by $1,457. This significant increase in rent has priced out many long-standing residents.
Magic City Innovation District, a downtown revitalization project, may significantly raise prices in nearby neighborhoods. The 18-acre project promises to build a mixed-use commercial and entertainment hub with new restaurants, shopping, and nightlife in the neighborhood. Although developers promise to reinvest the funds into the local population, previous revitalization projects’ empty promises leave residents skeptical of receiving the benefits.
As housing prices have increased in nearby neighborhoods, Little Haiti residents have become concerned as to whether they will be able to afford to stay in their homes. Worried about rising rental rates, Little Haiti residents sought help from the Miami City Commission to handle development concerns.
The Little Haiti Revitalization Trust (LHRT) was created by the Miami City Commission to address development problems on behalf of residents. The organization attempts to create jobs, attract industry, and encourage housing affordability by disbursing grants and loans to Little Haiti homeowners and small businesses. However, bureaucratic obstacles have stunted progress. There has been frequent turnover for LHRT administrators with several administrative heads resigning. Moreover, the dispersal of funds for business grants and home loans has been lackluster.
As a result, land use regulations and governmental financial aid are not alleviating the problems associated with development.
With increased housing costs pressuring Little Haiti residents, market-based solutions could be used to address the effects of market forces.
One alternative is a community land trust, which provides a voluntary alternative model for neighborhoods to consolidate housing and preserve housing affordability.
Similar to homeowners associations (HOA), residents in a CLT forfeit the right to certain actions that they can do with the property, like converting homes to Airbnb or student housing, to protect its values. However, as opposed to HOAs, CLTs own the land, reducing land price increases from external speculation from developers.
Currently, several North American cities have developed land trusts to protect price-sensitive dwellers. The Champlain Housing Trust (CHT) serves as the CLT for Northwestern Vermont. Currently, the Champlain Housing Trust manages over 2,500 apartments, 650 single-family homes, and 140,000 square feet of commercial real estate. The Champlain Housing Trust uses private funding sources like collected rent, donations, and property management fees for most of its revenue stream. While rents are the primary sources of revenue, all properties are leased below market rate, ensuring lower-income residents can afford commercial and residential properties. The trust also sponsors financial education seminars and mortgage assistance to improve residents’ financial stability.
Since its implementation, housing affordability has improved. The trust removed the cost of land for homeowners, lowering the sale price of homes by 25%. Residents who make less than 30% of the area median income, the midpoint income for a region, are now able to afford housing. Housing is provided to 500 previously homeless residents.
The Parkdale’s Neighborhood Land Trust is another model being used in Toronto. In the last four years, both community land trusts successfully protected 205 affordable units across the Toronto area through private investment.
Community land trusts can also be used to ensure sustainable economic development without displacement.
In Boston, Dudley Neighbors Incorporated (DNI) has converted 30 acres of previously underutilized land into 225 affordable housing units and 10,000 square feet of renovated commercial properties. While funding for DNI was originally dependent on public grants (30%) for revenue, most recent financial reports indicate the figure is closer to 5% with the majority of revenue coming from rental income, real estate tax reimbursement, and private contributions.
Moreover, DNI grants a Community Investment Tax Credit (CITC) to organizations and individuals who donate more than $1,000. DNI gives owners a 50% commonwealth tax credit on their donations, incentivizing businesses to fund sustainable residential and commercial developments. This mutually benefits donors with tax benefits and tenants with rent-stabilized units.
It’s important to note that community land trusts are not solely privately funded. Several use federal or state grant money to operate. However, relying on government funds has several problems. CLTs struggle to maintain sustainable funding during political transitions and face opposition from non-CLT constituents for using tax dollars for land acquisition. While these CLTs are not necessarily unsuccessful, they are less effective in the longer term than private CLTs.
Given the high rate of renter-occupied properties in Little Haiti, both residents and businesses are more susceptible to price shocks from increased development. A CLT would consolidate ownership within the community, protecting the local middle-class residents against increased rents and allowing for market-driven redevelopment.
The Miami City Commission’s attempts to address gentrification have been subpar. If Little Haiti wants to stop the natural market changes that lead to gentrification, community land trusts ensure the decisions on housing, business, and public amenities are controlled by property owners and the community, not local government.