In August, a unanimous vote of the San Francisco Board of Supervisors allowed their 21-unit apartment building to convert to a housing cooperative. Now the residents can purchase “shares” in the co-op for $10,000, allowing them to become cooperative home owners with control of their building’s finances, membership and maintenance and the ability to pass down their home to their children.
The action brings to an end a 13-year struggle against displacement of the building’s residents and the first truly affordable home ownership opportunity in San Francisco’s Chinatown neighborhood. The majority of these home owners earn less than 50 percent of area median income, while most of the city’s below market rate condominiums are priced affordable for households earning 80-120 percent of area median income.
This is not only a local milestone, but of national importance. The residents of 53 Columbus Ave. have been working with the San Francisco Community Land Trust (SFCLT) to protect the building and to convert it into a permanently affordable housing cooperative. The CUC-SFCLT collaboration is the first community land trust in the country to use a housing cooperative explicitly to prevent the eviction of current residents.
The building located at 53 Columbus Ave. was purchased by City College of San Francisco in 1998, which intended to demolish it to make way for its Chinatown campus. Residents, with the assistance of the Asian Law Caucus (ALC) and Chinatown Community Development Center, organized first for relocation and later for the right to remain. In 2005, the residents approached SFCLT to explore the purchase of the building with the goal of renovating it and converting into a housing cooperative. Since then SFCLT has been working directly with the residents to develop their capacity to own and manage their residences as a cooperative, while ALC moved into the downstairs commercial space, which it will own separately.
Longtime resident and CUC Board of Directors Vice President Miao Yan Wen comments: “This building represents the community. It is important to take care of the low-income people who live here. There are many seniors who live in this building. If the building were torn down, they would have to move out of the neighborhood and lose their access to doctors, stores, services and people of a similar background who live in Chinatown.” She says that now that the building is a cooperative, “I feel stable and safe. We have better control of the building and all the related bills so we can better manage the building.”
SFCLT Director Tracy Parent remarks: “This is a victory not just for these 21 families but for the greater community of San Francisco. Limited equity housing cooperatives allow the current residents to benefit from affordable homeownership, with a moderate but steady appreciation over time that’s pegged to the consumer price index, which ensures that other families can buy these homes for an affordable price in the future. The SF Community Land Trust also provides ongoing support and education for the residents to help them continue to build their household assets, such as savings for education, starting a small business or planning retirement.”
Community land trusts are locally based non-profit organizations that create permanently affordable housing through community ownership of the land. CLTs separate the ownership of residential buildings from ownership of the land under those buildings. Residents control their buildings by owning them. Residents can own a house, an apartment, or a share in a housing cooperative. In a limited equity housing cooperative, each household has one share and thus one vote in the affairs of the co-op. The CLT retains ownership of the land under the buildings.
By separating the ownership of the land from the buildings, the CLT can reduce the cost of owning a building or house. The CLT creates long-term ground leases for the buildings on their land, usually 99 years, and includes re-sale restrictions in these ground leases. In this way, the buildings can remain affordable not just for the first owner, but for all owners in the future.
So in exchange for inexpensive homes, residents agree to sell their homes back to the CLT, or another low-income household, at a restricted price. This restriction on price benefits the larger community of low-income people by restraining inflation in the price of that housing. Through community control of the CLT, it can focus on the housing needs of the community, not of for-profit developers.
According to a recent study by the National Housing Institute, urban CLTs across the nation are increasingly being recognized for not only creating permanently affordable housing stock for diverse lower-income families, but also for building family assets and promoting community building. The combination of affordable ownership and ongoing financial education enable low-income households to move out of poverty and into economic self-sufficiency.
Poverty is not just the lack of income; it’s the lack of asset wealth. Without savings, home equity or equity in a retirement account or a business, an asset-poor household would face serious consequences if a sudden drop in income were to occur. According to the city’s Consolidated Plan, 30 percent of the city’s residents are asset poor compared to 10 percent who are income poor, with non-white households being twice as likely as white households to become asset poor.
Low-income families often lack asset building opportunities that middle-income families take for granted, such as homeownership and financial education. In addition to the benefits and protections of owning property on CLT land, the cooperative structure offers additional protection for homeowners against predatory lenders that created the foreclosure crisis in recent years.