Wednesday, August 9, 2023

Land trusts, co-ops and imperfect representation

Last month the New York Times ran an article by Claire Fahy about community land trusts. I've been hearing more about them lately: there's a group calling itself the Western Queens Community Land Trust that shows up to events, and my City Council member regularly indicates support for them. Several of the people I follow on social media also express support for them.

I've already explained one reason community land trusts are a bad idea: they assign benefits to people based on where they are. The intent is to grant people benefits as compensation for hardship, past (oppressive urban highways and drug laws, and yes I know that these things are not really in the past), or present/future (cheap roads, communication and energy in the country). Despite this intent, the benefits regularly go to people who don't need or deserve them, such as recent arrivals and wealthy vacationers. The benefits also fail to go to people who do need and deserve them, because they've left the area, because they are not part of the legally defined group, or because there aren't enough benefits to go around.

But even if you ignore the fact that it's not really fair to distribute benefits to people based on where they currently live, there's another problem: the trust part. Community land trusts don't have a mechanism to ensure that those benefits are reliably and evenly distributed to the people who live in their declared territory. The trusts are currently constituted as private nonprofit corporations, and I am not aware of any mechanism for governance, proposed or possible, that could make them genuinely representative. We're just supposed to trust them.

Fahy says "The concept of a community land trust began in 1969" and talks about a recent increase in the use of community land trusts in urban areas. That's probably true, but the concept of a nonprofit organization owning property and leasing it out to individuals and families is much older. And in fact, Fahy mentions that the concept was directly copied from the Moshavim model of settler colonialism in Israel, which is a dubious distinction.

Here in New York we have nonprofit housing developers like the Phipps Houses that have been renting at below-market prices for generations. We've also had housing cooperatives since the 1880s at least, and they don't live up to the lofty rhetoric of "community" we hear from some proponents.

I've lived in two different housing coops. One suffered from underinvestment stemming from an effort to keep rents affordable; another suffered from corruption by the officials who were responsible for running the property, and managed to get away with tens of thousands of dollars.

From what I've heard, these are relatively minor concerns in the grand scheme of what can go wrong with a housing coop. The condominium models used around the country and around the world are similar. Among the more extreme risks are the collapse of the Champlain Towers in Florida in 2021. Some have argued that the disinvestment we saw in Champlain Towers is a flaw in the condominium model.

Beyond the risk of corruption is a more general vagueness about governance. Who decides what the land trust should invest in? Which new properties should it buy? How much housing should it build, or allow to be built? What criteria should it use for who it sells/lends to? Should it develop and lease commercial properties, community facilities, parking? If it earns profits, what happens to those profits?

Who chooses the people that make those decisions? Are they appointed by elected officials? Are they elected at the bottom of the ballot, overshadowed by candidates for President, Mayor or Congress? Or in low-turnout off-year elections? Or are they elected by the membership of the Land Trust - and who gets to be a member? Are they even just a self-perpetuating board of directors? Where is the trust there?

Since they live in the midst of housing co-ops and nonprofit housing, you'd think the people who are promoting community land trusts here in New York City would acknowledge the existence of those models, compare the community land trust model to those models, and have some argument about why community land trusts are preferable, but I haven't seen anything like that. You might also think they'd acknowledge the problems of governance and function that have affected co-ops and nonprofits. Nope.

Community land trusts are also promoted as a way to combat the housing crisis. Fahy says, "The primary model in New York creates rental units," but they don't really create any units. They simply buy property and rent it out.

The trusts have the power to reduce displacement by keeping rents low and resisting pressure to sell, but I haven't seen a discussion of how that would address the core problem of housing: there isn't enough of it in places where people want to live. They're not any more capable of creating new housing than any other organization; in fact, they may impede it. This is no solution for the vast numbers of people who don't already own housing.

In sum, community land trusts are likely to serve the wrong people, and may not even successfully represent those people, or function competently at all. They are promoted as a solution to the housing crisis, but even if they function perfectly they're no better at creating new housing than any other organizational model, and likely worse.

Why are we still talking about them?