A Self-management Approach to Housing

Tom Wetzel

Community land trusts (CLTs) have been formed in a number of communities in the USA in response to either disinvestment or gentrification. The CLT acquires land to take it permanently off the market and make it available for the use of the community. As a democratic organization, the CLT is intended to empower the community in determining what is done with land in that area. The CLT may rehab existing buildings, build new houses or apartment buildings, or do other types of development work. The typical aims of the CLT approach are:

• Resident control of housing
• Community control over land use and development
• Removal of land and housing from the speculative market
• Making sure that housing remains permanently affordable to low- to moderate-income households, that is, to working class people

The residents own the buildings but the CLT retains ownership of the land. This is how decommodification of housing is enforced. The dwellings on the CLT land cannot be sold at whatever price the market will bear. Instead, there is a clause in the ground lease that enables the CLT to buy back the dwelling at a restricted price if the resident wants to sell it. The CLT thus enforces the community’s interest in preserving the affordable housing.

In recent decades most non-profit housing development in the USA has been done by community development corporations (CDCs) that build rental housing. These vary considerably among themselves but many are lacking in democratic accountability to the tenants or the communities where they operate. Often their boards of directors are self-perpetuating, presiding over the staff with a corporate-style hierarchy. Generally the tenants in their buildings have the same sort of relationship to the CDC landlord as tenants in private, for-profit rental buildings. Sometimes even the commitment to permanent affordability is lacking.

The community land trust model differs from the typical CDC in that it poses the possibility of a self-management approach to housing. We can take self-management to be encapsulated in the following principle:

Each person is to have a say over decisions that affect them and a degree of say in proportion as they are affected.

People who live in a dwelling are more impacted by the decisions about what goes on there than anyone else; so, they should have control over what goes on in their space. In the CLT model this is implemented via resident control of dwellings. But the use of the land and the price of housing affect everyone in the community; so everyone should have a say over this.

The ground lease gives the community some say over what happens with the buildings on CLT land. The decisions that the CLT retains a say over are things that would have an impact on the surrounding community. The community can control the type of use or major changes to the building, and can specify minimum levels of maintenance. If the coop or homeowner association fails to meet their financial obligations, the CLT can step in.

The community land trust model works within the legal framework of home ownership, while modifying it, as a way to implement resident self-management of buildings, and community self-management of real estate development, within the context of the existing capitalist society.

The model of “fee simple” ownership for land and housing has been historically favored in law and policy in the USA. Land and housing are commodities, bought and sold for the highest price that a willing buyer will pay to a willing seller. The capitalist investment cycle in the built environment is founded on this commodity status of land and buildings.

The fee simple model of home ownership is really a bundle of rights, which give a variety of advantages to owning a dwelling. You can control the space where you live, you can customize or remodel the interior to suit yourself. You’re freed of the whims or intrusions of a landlord. A fixed-rate mortgage frees you from periodic rent increases. If you own a detached house, you can build an addition or remodel the exterior, and yard space is available for play, for gardening.

On the other hand, the status of a house as a commodity means that the house can be used as an investment, a way to profit from appreciation in market value.

In the CLT model these components of home ownership are separated. First, residents don’t own the land under their buildings. The land is permanently taken off the market. Second, the right to profit through speculative investment is removed by placing a permanent restriction on resale price on the dwelling. Some of the components of ownership are retained – security of tenure and right of control over your own space.

“You’re on your own, Jack” is the traditional approach to housing in the USA. The assumption is that it is up to each household to find and hold onto shelter that is habitable and within their means. Not everyone has the income, skills and experience to do this with equal success.

If your parents owned the house you were raised in, or if you do financial management as part of your job, you may have bits of knowledge that are useful for success at managing a property. Given the concentration of expertise at the top of the economic pyramid and huge inequalities in American society, not everyone has the same opportunity to acquire such knowledge.

If low-income people are set loose on their own in a stand-alone co-op, they may be preyed upon by unscrupulous contractors or property management firms. The problem isn’t limited to low-income people. A condo association may suddenly realize it doesn’t have the funds to do a needed roof replacement after ill-advised purchase of some expensive amenity for their building.

One of the roles of the community land trust is to address these sorts of issues by organizing guidance and sharing of knowledge for resident associations. The “you’re-on-your-own” assumption of market-based housing is thus replaced by a more collaborative approach in which knowledge and risks are shared, resources are pooled, and collective security enhances the security of the individual. The CLT approach thus embodies the practice of “mutual aid.”

The idea of “limited equity” is that the restriction on resale price ensures the availability of housing at a price that working people can afford. A weakness of stand-alone limited equity housing co-ops has been that the co-op members have a personal self-interest in breaking the restrictions on resale price when they want to sell. Such co-ops exist in the context of market-governed real estate, which permits speculative profit-taking.

Realtors and financial institutions have no interest in enforcing the resale price restrictions. Members of limited equity co-ops have at times been able to break the limits on resale price, converting their building into a market-rate co-op.

For example: In the 1960s the International Longshoremen’s and Warehousemen’s Union organized the 300-unit St. Francis Square limited equity housing co-op in San Francisco. A number of the original tenants recently began thinking of selling, to retire elsewhere or provide a cash inheritance to their grandchildren. The inflation in San Francisco real estate prices in recent years makes this a juicy prospect. Thus they voted recently to break the limits on resale price.

The CLT model is designed as a solution to this problem. Community land trusts typically have two classes of membership. One group are the residents who own houses, condos or shares in co-ops that sit on CLT land. They are parties to a ground lease and are called “lessees.” Through outreach and community organizing, the CLT acquires others in the community — non-lessee members — who are supportive of its goals as well as people who are looking for inexpensive housing.

The lessee and non-lessee members elect the same number of representatives to the CLT board of directors. Some CLTs have split votes at membership assemblies, requiring agreement of both groups on major issues. The idea is to balance the interests of the residents who own their buildings with the broader community interest. This structure makes removal of restrictions on resale price much more difficult than in a stand-alone coop. The CLT is the enforcer of the community stake in decommodification of housing.

The CLT model is thus a non-market, non-statist, self-management approach to housing. The self-management potential of the CLT model could be developed in a number of ways.

Instead of the typical hierarchy of a non-profit organization, with employees managed by an Executive Director answerable to a Board of Directors, we might imagine a CLT in which periodic general assemblies of members discuss and approve key decisions, and the elected Board of Directors negotiates work tasks and compensation with a self-managing staff collective.

Self-management can also be extended to the construction and design of buildings. In The Production of Houses Christopher Alexander describes a project in Baja California in the 1970s in which a group of Mexican families were active participants in the design of the houses that were being built for them. To facilitate this process Alexander developed a set of modular design elements that represented various design options, and a technique for integrating their design selections into the construction process.

To reduce the funds that each had to put forward for their dwelling, family members, to varying degrees, were also involved in the construction work. The upshot of the self-design process was that each of the houses was unique, reflecting the particular priorities of the family that was going to live in it.

Through a CLT, a community can decide what services should be provided, what forms of economic development should take place, to ensure not only housing for residents but work spaces.

Given the commitment to self-management, space could be provided for self-managing work collectives. For example, a city-wide network of CLTs might decide to provide spaces for a network of worker collective groceries. In this way the principle of self-management can be applied to social services that are developed for communities so that immediate gains are consistent with a larger vision of a society that is self-managing.

Related Topics: Housing – Self-Management