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Bainbridge's Housing Resources Board plans new home for affordability
For nearly a decade, Kelly Quinn was one of hundreds of commuters whose lives span Agate Passage. She drove daily from Kingston to her Bainbridge job, retreating across the bridge each evening.
When a divorce gave her opportunity for a fresh start last year, she realized her strongest ties were to the island.
“My church was here, my friends were here, so I started to look for a place to buy on the island,” Quinn said. “We all know that’s easier said than done.”
Quinn had no luck finding a mortgage on the island, where the median price of a home were well over $600,000, and she soon started looking for rentals. Then she spotted an advertisement from Bainbridge’s Housing Resources Board looking for applicants to purchase four affordable condominiums in Vineyard Lane. The condos, sold to HRB by developers at a discount, were offered to qualified buyers in a community land trust (CLT) model, in which owners buy homes at below-market value but are allowed to collect only a fraction of the home’s appreciation to keep the cost low for the next buyer.
The model works for Quinn, who was looking for a foothold in the community, and has now lived in Vineyard Lane for a little over a year.
“They didn’t give it to us,” Quinn said. “We pay our mortgage and our owner dues. We pay our own way. But I never would have been able to afford it without the program.”
The four condos in Vineyard Lane were HRB’s first experiment with the the CLT model. Over the next several years, HRB plans to use the same principle as the foundation of a new affordable neighborhood on Ferncliff Avenue.
The community will be developed on six acres donated this year to HRB. Executive Director Carl Florea said HRB plans to eventually build up to 48 affordable family residences there. He hopes the neighborhood will serve as a new model for affordable housing on the island; a way of maintaining diversity in the population and giving chance at homeownership for people otherwise unable to buy.
“(CLTs) work in areas where you have really high land values but a community that includes clerks, retail workers, brand new teachers and everything in between,” Florea said.
Beginning this month, HRB will hold a series of orientation sessions to familiarize potential buyers with the CLT concept. Like Quinn’s condominium, homes in the Ferncliff development will be held perpetually in HRB’s community land trust. Qualified buyers will purchase homes there for well under market value – in the $250,000 range, Florea says – and will hold a lease on the surrounding property.
When they sell, the owner is allowed to collect a limited amount of equity from the house but not the appreciation of the land, which helps maintain the low home price for the next buyer.
“It will never go up so quickly that it will become unaffordable,” Florea said.
Florea expects perspective owners will include those like Quinn, who work on the island and want to become full-time residents, as well as starter homes for renters ready for homeownership.
Federal grants require that affordable-housing projects benefit families that earn less than 80 percent of annual median income – in Kitsap County that’s roughly $55,900 for a family of four.
For lower-income families, Florea said HRB can help procure second mortgages and drive payments on the home even lower than the already discounted CLT price.
Since island home prices are dramatically higher than elsewhere in the county, HRB plans to offer some homes to families making up to 120 percent of median income.
Florea said HRB wants to be up front with interested parties that the CLT model isn’t for everyone. Because of the limited equity, buyers shouldn’t come looking to scoop up a high-yield investment.
Since buyers will be looking for homes and stability rather than investments, the Ferncliff development should take on an “old-fashioned” community atmosphere, Florea said.
“What I hope to see through this process, is the feeling that we’re creating a neighborhood, not just homes for people,” Florea said.
HRB is receiving the Ferncliff land in two installments. The first installment will be transferred this fall following an assessment; the second will come in five years.
The land is currently vacant, home to a patch of tangled forest and a handful of llamas. HRB’s vision is to populate the acreage with clusters of single-family homes and duplexes, interspersed with pockets of open space and served by communal parking lots.
HRB has already raised $100,000 in private donations for the project. It is seeking state and federal grants, and plans to raise another $400,000 in private donations for the first installment of homes. Florea said the city has been supportive of the effort but he doesn’t expect it to contribute much financially. HRB will begin permitting the project this year and could break ground on the neighborhood as early as next summer.
HRB’s Ferncliff development would be the first CLT project in Kitsap County, but the model has been well tested in a number of Washington communities.
Bellingham, Seattle and several San Juan Islands communities have CLT projects. Before moving to Bainbridge, Florea organized a CLT group in Leavenworth, where he had served as a Lutheran minister and previously held a city council seat.
Orcas Island, in the San Juans, is home to OPAL, the state’s oldest CLT group.
OPAL was formed in 1989 by founders wary of the same trends worrying HRB on Bainbridge. It saw a period of rampant growth, soaring land prices and rising rents driving out lower-income families and quashing diversity on the rural island.
Leaning on state and federal grants as well as private donations, OPAL opened its first CLT community of 18 homes in 1994. Since then OPAL’s collection of owner-occupant homes has grown to 58.
According to OPAL Executive Director Lisa Byers, 28 homes have been resold so far and some have changed hands several times. Byers said the average original owner of an OPAL home earned 46 percent of the county’s median income. When the homes were resold the average buyer earned 49 percent of median income. The difference, Byers said, shows that the homeowners were able to benefit from some appreciation, but the houses remained affordable.
OPAL neighborhoods have been well supported on Orcas. Byers said a recent survey showed roughly 70 percent of residents thought the homes were good for the island and a quarter of the island’s households are regular donors to to the CLT. Good news for OPAL, which funded its last two purchases with private donations and is currently developing a 34-home neighborhood.
“It’s proven to be a model that is effective out here,” Byers said.
On Bainbridge, Florea hopes a successful neighborhood on Ferncliff would inspire others on the island to donate land or existing homes to the CLT. He also believes that some residents who feel they are being taxed off the island, might consider entering their homes into CLT as a way of staying in the community and helping in the affordable housing cause after they are gone.
Elements of the CLT model have also been worked into drafts of a new affordable housing ordinance for the city.
Florea hopes education and early participation by residents will make HRB’s CLT project a success. Outreach will begin with a series of orientation sessions this month. The sessions will introduce perspective homeowners to the CLT concept, but also give HRB a sense of who wants to be part of the new neighborhood.
“We want to find out what our market is, who is interested and then invite them into the process,” Florea said. “They’ll be able to see this grow from the ground up.”
BOX: CLT Primers
HRB is offering several orientation sessions for people interested in the Ferncliff Avenue community land trust neighborhood. The sessions will cover the qualification process, plans for the neighborhood and homes, and the CLT model.
Thursday sessions will be held at 7 p.m. Sept. 18 and Sept. 25. Saturday sessions will be held at 9 a.m. Sept. 20 and Sept. 27. All sessions are held at Bethany Lutheran Church. and attendance is a mandatory first step in qualifying for a CLT home.
To find out about other future sessions call Joan Marsden at HRB at 842-1909.