A Model for Truly Affordable Housing

Last spring, Amanda Donnell came across a rare anomaly in the local housing market: a home for sale under $200,000.

At $185,000, the place wasn’t in great condition, and in fact had been listed at $112,000 the previous year. But it was in her price range. Or so she thought. Another buyer quickly swooped in with a high cash offer, and it was gone.

A year later, homes under $200,000 no longer exist in the Flathead Valley real estate market.

“Right now there’s no way I could step foot in anything on the regular market,” Donnell said.

Luckily, she doesn’t have to deal with the regular market. Earlier this year, Donnell received the call that a home through the Northwest Montana Community Land Trust was available. She had been on the waiting list, and the wait was over.

After finalizing the purchase, Donnell and her two sons moved into their $170,000 Kalispell house in March. Her USDA subsidized mortgage payment is comparable to the $775 plus storage-unit fees that she was paying for her “completely rundown, falling-apart” rental.

“I’m basically paying the same for a really awesome, three-bed, two-bath house that’s 1,800 square feet and has a great yard,” she said, adding that she also doesn’t have to worry about her rent suddenly increasing, which she said is happening frequently now in the valley.

It’s all made possible by the unique model of the community land trust.

“It’s incredible that this program exists,” Donnell, a single parent with a full-time job, said. “It’s great just knowing that there is something out there that average people, hard-working people, who live in the community and put into the community and love it, just knowing that there’s really one option to keep us here and make it affordable for us.”

The Northwest Montana Community Land Trust was established as a nonprofit in 2009 with a mission to provide permanently affordable homeownership opportunities for low- and moderate-income families in the Flathead Valley. It is one of more than 225 community land trusts in the U.S., according to the Grounded Solutions Network.

“It’s big in other places, and it’s growing,” Kim Morisaki, the organization’s new executive director, said of the community land trust model.

A community land trust, not to be confused with a conservation-focused land trust, purchases properties to maintain in trust as permanent affordable housing options. Locally, buyers purchase the home itself, while the Northwest Montana Community Land Trust maintains ownership of the land, with homeowners paying a $25 monthly ground lease.

Separating the land from the structure keeps prices down. If homeowners are ready to move on, they sell the house back to the trust at a price that enables them to capture their initial investment plus 25% of the increase in appraised value since they bought the house. The trust then resells the home at no higher than the 25% in increased appraisal value. 

“The home will remain affordable forever,” Morisaki said. “It will never go back to market rate.”

Upon forming in 2009, the Northwest Montana Community Land Trust bought a slate of properties on the recession foreclosure market. Those initial low purchase prices mean that any homes becoming available now, especially those that haven’t changed hands in the last 12 years, are still incredibly cheap by local housing standards, far below market rate.

The trust currently has homes available, although with a waiting list, ranging in price from $111,000 to closer to $200,000. Buyers must meet income eligibility requirements and qualify for a mortgage.

The nonprofit, in partnership with NeighborWorks Montana, hired Morisaki as executive director as it seeks to expand its current inventory of 52 homes, spread around Kalispell. Morisaki hopes to grow the affordable housing portfolio both in Kalispell and into other communities such as Columbia Falls. 

Morisaki, who formerly worked at Montana West Economic Development, has also been in discussions with community leaders in Lake, Lincoln and Sanders counties to explore potential projects there. She acknowledges that many people have never heard of the nonprofit.

“The first step is to let people know this actually exists so we can get the right people applying,” she said. “The other step is to find partners.”

Partners could include businesses that offer annual corporate support, similar to a United Way donation model. Other potential partners include developers or property owners, particularly those planning their estates, who are interested in contributing to affordable housing while receiving tax benefits. Donating land or selling property to the trust at a discount would qualify as a nonprofit donation and be a tax write-off. 

“It’s going to be people who have a heart for this, people who just care about the fact that the average employee in the valley can’t afford to buy a home,” Morisaki said.

The community land trust has the ability to leverage federal and state funds with private donations of either property or cash while working with private developers or other community members “who have a desire to see home ownership remain possible for the average Flathead Valley resident,” according to a land trust press release.

Partnerships are essential to the Northwest Montana Community Land Trust’s ability to purchase more homes, given the expense of buying properties at market rate amid an exploding local housing market. In 2009, the trust was able to scour the foreclosure market for decently priced homes.

Municipalities are other potential partners. The city of Columbia Falls has set aside $135,000 in housing funds for the community land trust to establish a presence there, which is buoyed by a Weyerhaeuser grant. Morisaki said the momentum building in Columbia Falls is “a step in the right direction.”

“The more houses we have, the more affordability we have for the working people who make the Flathead Valley run,” she said.

For more information, including applications, visit www.nwmtclt.org. Individuals and organizations interested in learning more about the nonprofit or contributing to it can call Kim Morisaki at (406) 261-8831.