At its regular town council meeting this week, Apex leaders voted unanimously to establish a Community Land Trust (CLT) for affordable housing.
Under the CLT model, town-owned land can be held in the trust in perpetuity and affordable housing built on it and sold to residents at affordable rates with a guaranteed 99-year lease on the land. When an owner is ready to sell, they can work with the CLT to set a new sale price for the home, having gained some equity based on the appreciated value of the home.
“As we know here, land is one of the more expensive aspects of the development costs that we’re facing, which undercuts our ability to offer more affordable homes,” Marla Newman, Apex’s director of Community Development & Neighborhood Connections, told the council at its meeting on September 9. “So if the CLT maintains the land but leases it at a favorable price, then that helps promote affordability, and that buyer or renter is only paying for the structure.”
The Town of Apex will now work to incorporate the CLT as nonprofit and council members will appoint a board of directors to eventually be composed equally of members of CLT households, residents from the surrounding Apex community, and “public interest members,” including public officials, funders, or representatives from local social services or housing nonprofits.
Once the town has its first board of directors appointed, the board will launch an initial land development program. It will issue requests for proposals (RFPs) for an independent management entity and development partners. Once identified, those partners will work with the board to prepare development agreements, ground leases, and grant and loan agreements and prepare covenants declaring affordability, somewhere between 60 and 80 percent of the area median income.
A home at a market rate price of $459,000, for instance, would cost $359,000 in the CLT model, Newman explained, as the town would be covering $100,000 for the cost of the land.
The Town of Apex has been considering establishing a CLT since 2021, attorney Steven Carr, who is working with the town, noted at the meeting. The town updated its affordable housing plan earlier this year after it purchased approximately 13 acres of land on S. Hughes Street, near the Stone Glen apartments development, to help with its goal of creating more affordable options. Town staff recommended the creation of a CLT “to facilitate long-term affordability of the homes” that will be built on the site “as well as on any other properties the Town may utilize for housing purposes,” according to a town staff memo.
Following the council’s approval, the town’s staff will now work with attorneys to create the nonprofit by November of this year, according to a slide presentation Newman gave to the council at Tuesday’s meeting. The council will appoint and seat a board of directors by February of next year, develop governance documents by May, and send out an RFP in June.
While there are more than 300 CLTs across the nation, including several here in the Triangle, including in Raleigh, Durham, and Chapel Hill, Apex’s model looks to be somewhat unique in that it is town-sponsored and uses town-owned land. Across the country, Apex town staff identified government-led CLT models in Carver County, Minnesota, the city of Flagstaff, Arizona, Harris County, Texas, and Chicago.
“Some of them have staff internal to their organization that manage the land trust, some contract with third parties,” said Newman. “Of course, our position would be, rather than trying to build that capacity in house, we would offer that it would make more sense … to look for a third party that has experience and a track record to actually partner with us in terms of managing the land trust.”
The CLT model isn’t new to Apex entirely. In recent months, the nonprofit Raleigh Area Land Trust (RALT) partnered with a private developer, Pulte Homes, on building a mix of affordable rental and for-sale townhomes in the new Prestwick and Huxley communities. The developer had promised to include the affordable units to the town as a rezoning condition.
Going forward, Newman said, any land the town purchases for housing could be added to the trust.
“I’m sad I’m not going to be in the weeds on this as we come up next year,” said Apex town council member Audra Killingsworth before making the motion to approve the CLT. Killingsworth’s term on the council ends this year and she is not running for reelection.
“But,” she added, “I’m super excited this is moving forward.”
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