Equity-sharing experiment part of new affordable-housing project in Tacoma. Can it work?

Yahoo

16-03-2025

A local organization is purchasing four parcels from the City of Tacoma to develop homes that will be collectively owned by the community as part of a process known as 'land banking.'
On Feb. 28, the Pierce County Community Land Trust (PCCLT) announced it had acquired the land from to kick off its land banking efforts.
PCCLT board member Alyssa Torrez told The News Tribune in an interview that the plan is to use the 36,000 square feet of land to build 48 homes in the next few years.
Torrez, who is also a senior planner for the City of Tacoma, called the acquisition a 'perfect storm' of opportunity, as a recent change in the city's zoning code will allow for a higher density of units to be built in plots that were previously for single families.
Maria Lee, a spokesperson for the City of Tacoma, told The News Tribune the four surplus properties were sold for $760,000.
'There is an active development agreement that requires 50% of the homes be for homebuyers at or below 80% [Area Median Income],' Lee wrote in an email to The News Tribune.
According to U.S. Census Bureau data from 2023, median income for the Tacoma area is $83,857.
Lee also said the land agreement dictates 50% of the units would be marketed to Black households. She said that is consistent with recommendations from the City's Disparity Study on homeownership from 2021.
Jessie Baines is the founder and president of PCCLT. In an interview with The News Tribune, Baines said members of his organization were aware of such homeownership disparities and began working to reduce them.
'We began to look into how we could further opportunities for folks to become home buyers because we know that's the greatest way to build wealth in the community,' he said.
Baines said opportunities are created for home buyers by using down-payment assistance programs such as the Covenant Homeownership Program in combination with down-payment assistance from the land trust to help people who otherwise would not have the cash to buy a home.
The catch is that when the home is sold to a new qualified owner, the seller, whose original purchase of the home was subsidized, does not receive the full equity in the home. Baines said under the model the homeowner would receive the equity from a percentage of the appreciated value of the home when they decide to sell.
He said the remaing appreciation value is 'paid forward' for the next buyer as a way of keeping the home affordable.
Baines said the land trust model allows the community to collectively own the land and provides stewardship to maintain affordable home-ownership opportunities for generations.
'A lot of times folks are thinking that these affordable home-ownership units are highly subsidized by the government,' Baines told The News Tribune. 'They are, but the folks living in them also pay it forward for the next person.'
Antavius Mitchell is a PCCLT board member and a prospective resident at the 69th Street and South Proctor Street project.
In an interview with The News Tribune, Mitchell said he pays around $3,000 a month in rent for where he and his four kids currently live.
'And that's just rent, no equity,' he said.
Mitchell said the PCCLT helped give him 'the keys' to becoming a homeowner. Ultimately he said the opportunity to pay it forward and provide an affordable homeownership opportunity to those who want to live in the home after him was something that caught his eye as well.
Baines said the design and construction plan of townhome-style units are still in the works. He anticipated permitting approval to be announced around June 2025.