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Land Trust Receives $15,000 to Clean-Up Former Gas Station Site, Plans Permanently Affordable Housing

Last week the Missouri Environmental Improvement and Energy Resources Authority (aka EIERA, yes we joked about E-I-E-I-O) presented a $15,000 check to the Red Brick Community Land Trust (RBCLT) for clean-up of the brownfield site where they plan to build some affordable housing. The St. Louis Business Journal announced the event last week.

First let’s figure out who is who and what is what.

The EIERA explains best who they are on their website:

“The Environmental Improvement and Energy Resources Authority (EIERA) is a quasi-governmental agency that serves as the financing arm for the Missouri Department of Natural Resources. Established by the Missouri General Assembly in 1972, the EIERA Board Members are appointed by the Governor.

The EIERA’s primary mandate is to provide financial assistance for energy and environmental projects and protect the environment. The agency also conducts research, supports energy efficiency and energy alternatives and promotes economic development. The Authority is not a regulatory agency.”

So what is a brownfield? In short, a brownfield is a previously developed site (with or without a building) that is contaminated (see wiki entry). Contamination can happen a number of ways; from the type of construction materials used to the former activities on the site, such as this former gas station site with two empty tanks remaining in the ground. These tanks will be removed before the RBCLT can construct the new affordable housing. RBCTLT’s press release covers more about how a land trust works:

RBCLT separates the cost of the land from the cost of what is built on it. This allows low-income residents to buy a quality home and at an affordable price. When homeowners choose to move and sell the home, they sell the home at a price that balances their interest to have a downpayment for their next home with the community’s interest in keeping the home affordable for another low-income family. In this way RBCLT homes remain permanently affordable from generation to generation. Community land trusts also help to preserve open green space for community gardens, parks and playgrounds.

“The land trust locks in resources like the state grant, permanently securing the benefits for the entire community. This allows the state agency to recycle the subsidy,” said Sarah Coffin, RBCLT board president and assistant professor in the Department of Public Policy Studies at Saint Louis University. “The benefits of the subsidy to the wider community include connecting previously fragmented segments of neighborhoods into cohesive units. One more brownfield will be removed from the urban landscape and the cleaned up site will be maintained as a public good in perpetuity. But more importantly, Red Brick CLT will be able to create homes that low-income people can afford from generation to generation, improving the quality of life for the children and the families who buy these homes, further increasing neighborhood stability and securing economic and cultural diversity in the community.”

So basically a home owner buys just the home, not the land. With the trust retaining ownership of the land the property can stay more affordable for the next buyer. This is a big contrast to how we’ve been doing affordable housing in St. Louis in the past where the original owner gets a grant or other incentives to help them get a home but once they sell the place basically becomes market rate.

The affordable housing “will be built through a partnership with Youth Education and Health in Soulard (YEHS) and YouthBuild St. Louis Americorps.” Here is more info on YouthBuild:

YouthBuild St. Louis AmeriCorps (Youthbuild St. Louis) is an alternative education, construction training, employment, and leadership development program serving low-income St. Louis youths, ages 18-24, who have not completed high school. Youthbuild St. Louis, which began in 1992, is sponsored by Youth Education and Health in Soulard (YEHS), a community-based organization founded in 1972.

What is uniquely exciting about YouthBuild is that it is combating the St. Louis public schools’ high school drop-out crisis, while helping to replenish St. Louis’s critical shortage of affordable housing.

Although a site plan was distributed the architecture for the new construction has not yet been finalized. Representatives indicated existing buildings adjacent to the site will also be renovated by YouthBuild. As you may recall, this area was threatened with complete demolition earlier this year (see post) but in May the city rescinded their offer of purchase (translation: we no longer seek to take your property away from you).

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Above: members of YouthBuild join Mark Bohnert, executive director of Red Brick Community Land Trust; Sarah Coffin, president of RBCLT; and Robert Kramer, EIERA board member.

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Above from left, Kristin Allen, development director with EIERA; Karen Massey, deputy director of EIERA, Bob Brandhorst, executive director of YEHS; Mark Bohnert, executive director of Red Brick Community Land Trust; Sarah Coffin, president of RBCLT; Solana Rice, vice president of RCBLT.

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Above from left; Sarah Coffin, president of RBCLT; State Senator Maida Coleman (D-5th District); Robert Kramer, EIERA board member; Kristin Allen, development director with EIERA
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Above, Sen. Coleman discusses project with RBCLT Board VP Solana Rice and ED Mark Bohnert.

I talked with Exec. Director Mark Bohnert after the presentation was over, here is a short clip:

[youtube]http://www.youtube.com/watch?v=ok8DYP2CVxE[/youtube]

Ald. Phyllis Young was invited to the event but she sent her regrets in advance.

I personally look forward to seeing the progress on the project.

 

Currently there are "17 comments" on this Article:

  1. Jim Zavist says:

    According to the Business Journal article, the site is at 1805 S. Tucker in the Soulard / Bohemian Hill area – I wish them luck, it sounds like an intriguing solution.

     
  2. GMichaud says:

    Congrats to all involved, good job! A great location for a great project. I know the work has just begun.

     
  3. GMichaud says:

    Once more revitalization of the city points to larger question of how all of the city hangs together? Transit is the answer of course and the city is at a crossroads, any design should reflect this point of view and bring together transit, Gravois and 12th street, with Soulard Market around the corner.
    The question may not be pertinent but if there is overall city leadership, urban plans should influence new developments as is talked about on Bohemian Hill.
    In other words what is the idea of the city? or is there one? The idea or plan should dictate residential or commercial space on the first floor. Should that 12th street connection become commercial?. There is many questions.
    The structure of government allows nothing to occur.

     
  4. MattHurst says:

    as usual i really enjoyed learning about land usage ideas in st louis. and as to your gracious reply, i checked for this post. problem is, the video you linked doesn’t work in IE7. you might need to edit this post, as the informative interview clip works fine on youtube. i;m sure you understand what i mean

    [SLP — I inserted the YouTube code another way so this time it should work for those of you that do windows.]

     
  5. WWSPD says:

    A small clarification on your definition of a brownfield: brownfields are previously developed sites that are contaminated or have the ‘perception’ of contamination. Sometimes sites that are thought to be brownfields pass a phase 1 with no need for further action.

     
  6. Jim Zavist says:

    A bigger discussion would be the actual need for more/new “affordable” housing in the city for “low-income residents”. Compared to many other cities, housing in St. Louis is very affordable, offering a lot of value at all price points. Sure, not everyone can afford to live anywhere they choose, but there is a large inventory of single family housing for less than $120,000, and (I assume) a supply of condo’s for less than $80,000-$100,000. So, part of the discussion needs to get back to the bigger picture of better education and more, better-paying jobs. It’s all a matter of perception. If you’re making minimum wage, nothing is really affordable. If you’re making $80,000 or $100,000, you have many, many options . . .

     
  7. CLTIZDIFFERENT says:

    Jim Zavist,

    You’re right, there is a lot of affordable housing available in St. Louis City. But the CLT model is a sustainable model that provides affordable, community-managed housing in perpetuity. I imagine it would be ideal if we could have a percentage of residential land in gentrifying neighborhoods turned into CLTs to ensure a diversity in affordability.

     
  8. Jim Zavist says:

    . . . the question then becomes whose land and/or project is designated as a CLT in “gentrifying neighborhoods” – where does one draw the line? Does a one-man, one-unit renovation have to contribute to some CLT fund? Does a developer of 20 units have to dedicate 1, 2 or 5 units to “the program”? I like this one because it’s being done “between consenting adults”, it’s not mandated, it’s incentivized. I have major concerns about imposing “good intentions” on the free marketplace. Much like rent conrtrol in NYC, there will always be “losers” when the government tries to guarantee “winners” (and mandating an affordable component is just that). There is no “right” to live in a better neighborhood than one can afford. So, until housing costs go up significantly in the region, I see no need to try and develop any sort of mandatory program.

    [SLP — First, our supply of affordable housing is pretty much non-existent.  We have many people working hard but not earning enough money to allow them to buy and maintain a house.  Their rental choices are often dismal.  

    As you indicate, this is a voluntary effort.  While some public money is being used I ask what new construction project in the city doesn’t have public money involved?  This is not about developer profit but a viable long-term housing solution.   This is a group of private citizens concerned about quality housing for others — a very noble effort. 

    This is so refreshing when I saw two different church groups, one North and one South, on Monday night argue for the demolition of “sound” structures.  One for a surface parking lot, the other because thieves had stolen the copper pipes!  Among us are decent hard working folks that have only minimal places to live and we have churches arguing their parishioners need safe places to park their cars on Sunday. Society’s priorities are totally screwed up.  And Mary H.—- neither church was Catholic.]

     
  9. CLT cheerleader says:

    I’d like to clarify one VERY important point about CLTs. They are NEVER mandated. They are democratically controlled organizations that typically operate outside the public sector. The Institute for Community Economics has a great website that explains how CLTs work (http://www.iceclt.org/). Burlington Associates is another great resource (http://www.burlingtonassociates.com/). But, cities can partner with CLTs to extend/recycle subsidy. In fact, the city of Burlington, VT requires that in order for a developer to qualify for subsidy that developer must place the units being subsidized on a land trust. The developer IS free, however, to bypass subsidy and build as many units as the market will bear and sell them as market rate. I see this as smart stewardship of the public’s resources and not an imposition on the marketplace. In fact, isn’t subsidy an imposition on the marketplace so government restrictions on their use appropriate? While the same model might not apply in St. Louis (we don’t have the same housing pressures as Burlington, VT) let me suggest a very modest alternative. What about the radical notion of requiring that any developer who receives subsidy to build ANY housing must put say 5% of those units on a CLT, partnering with a CLT organization? Chicago is considering doing just that, even with their TIF funds. What if we had done that when the first Washington Ave lofts were being proposed? Just posing the question…..

     
  10. LisaS says:

    Considering that the median household income in the City is around $38k, $120,000 for a house or condo is on the raw edge of affordable. Because my kids go to public schools, I know a number of families with 3 jobs between two adults that I strongly suspect don’t make that much–a few of them college-educated. It’s hard to remember sometimes that those of us with incomes in that $80-100k range are among the very fortunate in this society.

    That said, I agree with CLTIndifferent …. this is a way to continue to provide affordable housing even after gentrification of an area–a good thing for everyone. We’ll see how it works in our market.

     
  11. CLTIZDIFFERENT says:

    Jim,

    CLTs do not interfere with the market. The CLT board, consisting of CLT residents, and possibly affordable housing professionals, local planning professionals and academics own the land. They sell the residential improvements according to a formula which prices housing units below market rate. Home-owners still earn equity that could springboard them into market-rate housing.

    Instead of thinking of it as an artifical intervention, think of it as truly supporting REAL choice in housing opportunities in a neighborhood.

     
  12. Jim Zavist says:

    CLTIZDIFFERENT – My comments were aimed at the statement you made that “I imagine it would be ideal if we could have a percentage of residential land in gentrifying neighborhoods turned into CLTs to ensure a diversity in affordability.” I read that as liking and/or wanting a mandate. As I stated several times, I think this project and privately-funded CLT’s are an idea worth exploring. If both seller and buyer can agree to reasonable terms for a transaction, go do it. I just have a big problem with “percentages”. They’re either “recommended” or “suggestions” and have no teeth and aren’t enforceable OR they’re mandatory, which simply means one or more buyers of other units have to pay more so that a minority of buyers receive a subsidized discount on their unit. Unfortunately, life ain’t fair. If someone wants to make more money (the precursor to being able to afford a nicer place to live), one needs to be educated, work hard, invest wisely and, yes, sacrifice during their younger years. And while CLT’s are one option, another (more carrot than stick) is what LA is pushing – allowing smaller units, which allows market-rate affordability in “hot” and/or “desirable” areas: http://www.latimes.com/news/local/la-me-small24jul24,0,6182231.story

     
  13. Jim Zavist says:

    The perception of “affordable” housing depends greatly on one’s income. While everyone’s personal budget is exactly that, very personal, from a national perspective, housing costs in St. Louis are VERY affordable – this is from a few years back, but it’s the most current data I could find: http://www.census.gov/acs/www/Products/Ranking/2003/R17T160.htm St. Louis is at the very bottom, the MOST affordable of the 68 cities studied. I’m a big believer in looking at the total package, and the part of the equation that seems to be lacking here is on the salary side, not on the property side, of the equation.

    People make low salaries / are paid low wages for one of three reasons – choice, one chooses to be an artist instead of an auto worker, education (or the lack thereof) and potential jobs. Choice, in most cases is individual, so one does have some control over that part. The other two, education (especially for any student associated with our public school system) and opportunity go somewhat hand in hand. How many SLPS graduates are qualified to work at AG Edwards? Conversely, how many workers does AG Edwards “import” from surrounding counties and states? And how many of them are taking their pay back to Chesterfield or St. Charles County?

    Even locally, housing in the city is a bargain compared to many of the newer surrounding suburban areas. People shouldn’t have to live in “families with 3 jobs between two adults” just to afford a $100,000 mortgage. But the real answer isn’t to make housing cheaper, it’s to educate all our kids, attract employers looking for a well-educated population, fix our negative crime perceptions and to convince people to reinvest in the city, not to scurry out to the perceived “safety” of the suburbs. And a big part of that reinvestment is making sure the profits go back into the developers’ pockets – if they make money, they’ll come back and do it again! If not, we end up with the status quo, of nobody seeing any significant appreciation or profit from their “investment”, so we essentially sending them off to “greener pastures”, both literally and figuratively!

     
  14. Jim Zavist says:

    Finally, Steve, I don’t object to the concept of CLT’s – see my first post. I only object to the concept of requiring developers to “provide” an “affordable” component as a condition for building in the city. Development is a zero-sum game – if a developer can’t reasonably expect to make a profit, they simply will look elsewhere. It costs x dollars to build a project and the units, in total, sell for y. The difference is the developer’s profit. Yes, to a certain extent, it’s a crap shoot – construction costs can go up and the market may fall – profit is not guaranteed. But, the only way to make a profit if 10% of units need to be discounted 25% is to charge 3%-5% more for the other 90% of the units that aren’t being dicounted – you have a few winners and a lot of “losers”. So, unless other jurisdictions are requiring similar concessions, your market-rate buyer could save 3%-5% (or get 3%-5% more space or quality upgrades) simply by buying in an area that doesn’t require an affordable component. Bottom line, the unregulated units sell quicker and development and reinvestment flow that direction, reinforcing the concept that development in the city is not profitable (if affordability were to be mandated). I do agree, however, that there should be some quid pro quo for the use of public tax dollars to fund private investment. I just don’t think tht now is the time to be pushing for mandatory “affordability” efforts. We’re barely getting new stuff built in a lot of areas (like today’s post illustrates), so that may hve to be the quid pro quo, simply go versus no go. Sure, if private CLT’s make sense, use them, just don’t think about mandating!

     
  15. CLTIZDIFFERENT says:

    Hrmmm…I would strongly suggest you follow CLTcheerleader’s advice and read up on how CLTs work if you care to learn anymore about them.

    They don’t ‘need’ government intervention. The board simply purchases property like any other entity. They sell housing to homebuyers. There’s no ‘forcing’ anyone to do anything and there isn’t anything ‘soft’ about the transactions or guidelines.

    Homebuyers that can afford market-rate either won’t qualify for buying a home due to income or they’ll opt to buy market-rate because they’ll get the full appreciation on their home’s value. Those who qualify get the chance to own a home and get some reduced equity that will, again, help them go into the CLT-free market.

     
  16. CLT cheerleader says:

    Jim — let me state my point again. If a developer wants subsidy, the developer should set aside a portion of the units built and place them on a land trust. Tell me how that interferes with the market? Besides, hasn’t the developer already interfered with the market by asking for the subsidy? But if the developer is not using subsidy, there should be no government interference. As such, I completely agree with you, as does the CLT model with your logic. Check out the links I suggested in my earlier post.

     
  17. Jim Zavist says:

    CLT Cheerleader – I think we’re going to have to agree to disagree. Yes, asking for (and receiving) a subsidy does have a slight effect on the market. The big difference is that a subsidy benefits every unit being constructed in a project, not just a select few. I’m no fan of subsidizing development, especially to the extent that it’s being done locally. But adding an affordability requirement would simply push the subsidy equation in the wrong direction. And, as BPV illustrates, it doesn’t even guarantee that any new residential units will actually be built (as originally promised)!

    I think we both agree that “private” CLT’s are a viable option for maintaining “affordability”. I think where we’re going to have to disagree is with the concept that “If a developer wants subsidy, the developer SHOULD (emphasis added) set aside a portion of the units built and place them on a land trust.” In my mind, should equals must equals a requirement to provide below-market-rate units. As I stated previously, any time the government tries to manipulate housing prices, you find winners (people who pay less for more) and losers (people who pay more for less). Money doesn’t grow on trees or fall out of the sky. The subsidy part of the equation ain’t about affordability. it’s about the project happening or not.

    The only two ways to provide lower rents or sales prices are to a) make the units smaller and/or with fewer amenities and/or with less quality OR b) their reduced prices need to subsidized by charging more for the other, unsubsidized units. There is a point on every project where the numbers simply do not add up and the project does not get built. So, while housing prices in St. Louis are creeping up, the cost of construction is increasing at a higher rate, and they’re influenced by global forces.

    A builder-grade GE refrigerator costs the same here as it does in NYC or California, yet it’s going into a home that sells for less than half what a comparable property sells for in the other two markets. The same goes for toilet fixtures, door hardware and roofing shingles – there is a very real price floor when it comes to building, so there’s a very real actual minimum cost of construction for, for example, an 1100 square-foot residence. “Wanting” it to be less (to make it “affordable”) is simply wishful thinking. The same goes for expecting a developer to accept less profit to sell homes at lower prices, especially at prices lower than the actual cost of construction!

    Finally, the way money is usually made in real estate is through appreciation. The biggest fallacy with any reduced-appreciation program is that a buyer is trading off the possibility for significant, real long-term gain for a short-term, lower initial cost. A smart buyer will always focus on maximizing their return on investment (ROI). As such, it would make more sense to make the same down payment and make the same monthly mortgage payments on property of the same price in a less-trendy neighborhood than it would to trade off maximizing future appreciation simply for the sake of location. (The only exception would be someone who is absolutely, positively sure that a CLT WILL be the last residence they own – limited appreciation then becomes a non-issue and a lower purchase price / more “bang for the buck” SHOULD trump all other considerations.)

     

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