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City Business-Land trust idea struggles for support in 9th Ward

Land trust idea struggles for support in 9th Ward

Residents reluctant to consider buying homes on property they won’t own

POSTED: 08:54 AM Thursday, October 14, 2010
BY: Ben Myers, Staff Writer

Proponents of the Crescent City Urban Land Conservancy, a nascent community trust with well-heeled backers, view it as a groundbreaking way to promote affordable home ownership and civic-minded commerce. They also say it will be the first land trust in the country with dual focus on commercial and residential development.

But the trust, an idea still in formation with backing from the Ford and Greater New Orleans foundations, is stirring backlash in the Lower 9th Ward and giving pause to real estate agents who work in that neighborhood.

The commercial portion is unprecedented, but the residential portion is causing the controversy. A coalition of Lower 9th Ward community leaders has collected more than 100 signatures in opposition from residents who say that “land ownership by an organizational entity” is a bad deal for buyers and undermines the neighborhood’s legacy of black property owners.

“If you own the dirt, you make the rules,” said the Rev. Willie Calhoun, director of the Lower 9th Ward-based New Life Intracoastal Community Development Corp. “Our people came into that neighborhood to own their dirt. They owned the dirt before they owned the house.”

Plans call for the land trust to control use of certain lots in distressed neighborhoods throughout New Orleans . Individuals would own and occupy structures on trust-owned land, pay nominal land leases and agree to terms set forth by the trust. Entrepreneurs, for example, would be required to operate establishments desired by local residents. Homeowners would adhere to maintenance standards and face restrictions on subleasing, financing and resale.

Some of these business and homeowners would serve on the trust’s governing board, said Lynnette Colin, executive director of the O.C. Haley Boulevard Merchants and Business Association. Colin, who expects to become the trust’s executive director, said the trust is in the process of formal incorporation. A budget is in the works, she said, though she declined to reveal funding levels.

Two pilot programs are under way in advance of the trust becoming fully operational. The O.C. Haley Boulevard Merchants and Business Association will negotiate with current landowners to acquire about half a dozen commercial lots in Central City. The Lower 9th Ward Neighborhood Empowerment Network Association is preparing to build homes incrementally on about 40 vacant lots the New Orleans Redevelopment Authority has donated.

The residential pilot program is not targeting existing landowners, said JEG Urban Planning Associates President Joseph Gray, who consulted with NENA in setting up the program. Instead, he said the intent is to attract first-time homebuyers for whom land costs are prohibitive.

At the same time, Gray said the trust would ensure affordability for future owners by tying subsidies to the properties, as opposed to individual buyers.

“We are saying our investment is going to be put aside for the next buyer,” he said. “It’s really as fair as I think you can be.”

Still, land prices are so cheap in the Lower 9th Ward – vacant lots generally go for about $10,000, according to three real estate agents – that it’s doubtful many buyers will see the point in buying a house on land they don’t own, said Collette Meister, an agent with Century 21 Action Realty.

Land is a key attraction for buyers in the Lower 9th Ward, said Katie Witry, an agent with Prudential Gardner.

“It’s the lot that you own. That puts a lot of value on a property,” Witry said. “I’d be curious to see how I would provide education for (buyers) so they would make an informed decision.”

Lower 9th Ward Homeowners Association Director Linda Jackson sees no benefit for buyers who would pay a mortgage and land lease at the same time. Buyers should “own all of it at one price,” she said.

Gray said the monthly land fee will be about $25, part of which would be set aside for home repairs.

The trust’s offerings are “not for everyone,” Colin said, as some potential homebuyers will find the restrictions overbearing. For example, the trust won’t allow homeowners to pursue refinancing agreements it considers predatory, and certain repairs will be mandatory.

But, Colin added, the community will benefit from fully developed and well-maintained lots. A mere 0.6 percent of community land trust mortgages nationwide were in foreclosure at the end of 2009, compared with 15.6 percent of sub-prime loans, according to the National Community Land Trust Network.

Real estate agents such as Meister and Witry acknowledge they have conflicting views. They don’t embrace the trust as a feasible option for buyers in the Lower 9th Ward, but they also believe any effort to increase home ownership is positive in neighborhoods where neglected properties sink entire communities.

“The land itself will increase once the Lower 9 is populated,” Meister said. “You have to start somewhere.”
The problem in the Lower 9th Ward, she added, is “nowhere to go for coffee and a grocery store,” echoing the frustration of residents who blame lack of infrastructure and commercial services for the neighborhood’s 25 percent post-Katrina repopulation rate.

Areas with spotty populations tend to starve for private investment, said Mike Brown, a partner with Burlington Associates in Community Development who consulted on the commercial pilot program.

“The interests of the marketplace don’t always act in the long-term interest of the neighborhood,” Brown said.
A first-of-its-kind commercial land trust could loosen development gridlock while preserving certain sites for desired amenities, he said. But the Lower 9th Ward won’t see the commercial portion of the Crescent City Urban Land Conservancy unless the trust grows beyond pilot programs.

Brown and Gray say that ultimately depends on widespread grassroots acceptance.

“That’s going to be essential,” Brown said.•

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