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In This New Neighborhood, None Of The Homeowners Own The Land

Gabriel Cristóver Pérez
Volunteers and members of Austin Habitat for Humanity build a home in Northeast Austin. The home is part of a community land trust; Habitat will own the land, and homeowners will rent it from the nonprofit.

Laura Soto, 38, sands several planks of wood that will serve as the trim for the outside of her new home. A plank of wood labeled “front porch” and another labeled “door” lie just feet from her. On a break from working, she talks color palette.

“The trim will be the rich white, the outside of the house will be darker gray, and the door will be a lighter gray and there will be an accent wall of a grayish, blue color,” she says.

Soto, a mother of three who earns roughly $39,000 a year as a medical assistant, will soon be a first-time homeowner. For $150,000, she’s buying the first of 67 homes in a neighborhood in Northeast Austin built by Habitat for Humanity.

In a city where the median home value is $305,510, that’s a steal.

Soto's new home is in what will be the state’s largest community land trust, a model where a nonprofit or  municipality owns the land a home sits on. Homeowners then rent the land. The city and several nonprofits currently run community land trusts throughout the city. In this case, Austin Habitat for Humanity will own the land.

“Instead of your typical situation where the homeowner would come in and buy both the home and the land underneath the home, here the homeowner comes in and buys the home,” says Eliza Platts-Mills, a professor at the University of Texas School of Law. “But they don’t buy the land.”

Credit Gabriel Cristóver Pérez / KUT
Laura Soto is buying one of the 67 homes in the community land trust for $150,000.

Soto will pay roughly $25 a month to rent the land beneath her three-bedroom home. She’ll pay taxes on that rental fee and on the house. Should she choose to sell the home, rules dictate who can buy it and at what price.

“The homeowners can’t turn around and sell the home to whoever they want at whatever price they want,” Platts-Mills says.

State law requires that community land trust homes be sold to families making 80 percent of the median family income in the area, or $65,100 for a family of four in Austin. (There are some exceptions to this rule.) Habitat for Humanity is lowering that to 60 percent of the median family income, or $48,850 for a family of four.


That same law also restricts increases to the home value year over year. In Soto’s case, the value of her home will increase by 1.5 percent each year. That means Soto won’t get to cash-in on her investment the way many homeowners in Austin can, as home and land values skyrocket.

“It’s certainly not the unfettered access to the market appreciation, but the reality is that we couldn’t do that and keep the homes affordable for the next buyer,” said Wayne Gerami, vice president of client services at Austin Habitat for Humanity. “We’ve really shifted to prioritize affordability for the community more than wealth creation for individual families.”

When she’s ready to move into her new home early next year, Soto will have put in nearly 300 hours of building time with Habitat for Humanity, something the nonprofit calls "sweat equity." She will also have spent 30 hours in a class aimed at helping first-time homebuyers plan their finances.

Soto currently pays $1,300 a month to rent a house in Austin. She estimates the monthly mortgage on her new home will cost her about half that, roughly $760 a month. Her commute, she said, will remain the same.

“I’m very, very excited and very fortunate to have this opportunity,” Soto says.

Audrey McGlinchy is KUT's housing reporter. She focuses on affordable housing solutions, renters’ rights and the battles over zoning. Got a tip? Email her at Follow her on Twitter @AKMcGlinchy.
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