Skagway continues to investigate if a community land trust could help alleviate the valley’s housing shortage. A land trust expert addressed the assembly in a committee of the whole on Dec. 18. 

 

Michael Brown from Burlington Associates helped set up the Sitka Land Trust. Skagway hired his firm to see if the concept could work on a smaller scale.

A community land trust, or CLT, is a more affordable way to buy a home. The land is donated and grants are used to lower the cost of construction. The home owner leases the land under their house. They agree that when they sell, they will follow a set formula, for example, the home price plus 1.5% for each year owned. This ensures that the next home buyer can afford to move in.

Brown emphasized that every community is different.

“So the kind of decisions that get made at the local level, and what decisions you may make here should you do a community land trust, may be very different than they do in Sitka or in Bozeman, or some other place,” Brown said. “…That’s why there’s a ‘C’ in CLT. These are community based models. You get to determine what the expectations are.”

Brown said a land trust has two jobs that may seem to contradict each other. 

“Every community that decides to have community land trust tries to figure out a balance point between two equally important and directly competing goals,” he said. “On the one hand, wanting to provide a fair and equitable return to this home when they sell their home. And at the same time, preserve affordability for that incoming buyer. And that’s a teeter-totter.”

There are about 400 CLTs across the country. Sitka’s was the first in Alaska. Brown says that in his opinion, land trusts are working.

“About 70% of CLT homeowners in these places where we’ve done the studies are able to leverage the security and stability of owning this home they would otherwise have not been able to afford,” Brown said. “And are able to take that equity and that security and stability, and go out and buy a conventional home in the market. Maybe not in that community, but somewhere.”

If Skagway chooses to move forward with a CLT, they have a lot of decisions to make. One of the most important is who the land trust should serve. That was discussed at a recent Health, Education and Welfare Committee meeting. Committee Chair Alex Weddell outlined the discussions so far.

“What the committee ended up agreeing on is that the intended target market should be low-income persons, senior citizens and families,” she said. “Now this is, of course, just recommendations, and I think it’s still very much up for debate of what the table wants to do.”

The next question is how to define low income.

“What is low income, right?” Weddell asked. “And in Skagway, what is low income is very different. … the definition of low income should be explored.”

Assembly member Deb Potter inquired if first-time home buyers might be considered as a category. Weddell answered in the affirmative.

Potter asked for a project timeline. Brown’s answer was surprising.

“You could have homes available for sale, people living in them, maybe as early as the fall of ‘25.”

He amended that statement to say “realistically 2026.”

Brown said it will take a few months to work through the business planning process, to ensure that the community can make an informed decision.

Next steps include more discussion at Health, Education and Welfare, community outreach and the formation of a steering committee whose members Brown hopes will eventually serve on the CLT’s board.