Oaklanders remedy the housing crisis one home at a time

On a quiet fall day, Noni Session parked next to a two-story apartment building in North Oakland. It was a simple, white mid-century structure with a turquoise door and grey trim on the windows. Across the street, a BART train whizzed by on its way to MacArthur Station.

Session is the executive director of a nonprofit called East Bay Permanent Real Estate Cooperative, or EBPREC. Several months ago, the organization purchased this building in a bid to protect tenants after their landlord announced he was planning to sell the building. Property values in the neighborhood had risen dramatically over the past decade, and residents worried they would be forced out of their apartments, Session said. So they offered to buy the building.

With the help of EBPREC, the tenants initiated a crowdfunding campaign and purchased the building for $1.2 million in May. Now that they’ve got it, they don’t plan to give it up, ever. The land is held in a trust, with rent caps and complicated bylaws that make it very hard to sell. That means the tenants—who include a nursing student, a coffee roaster, and a lawyer who advocates for survivors of domestic abuse—pay less than the area’s median rent, and don’t have to worry about sudden rent increases or surprise evictions.

The maximum rent for a three-bedroom unit in the building is $1,500, Session said, and some units rent for under $1,300. That’s in a neighborhood where the average three-bedroom goes for about $4,000 a month, according to the real estate website Zillow.

The building still needs some maintenance. A pesky tree has to be removed from the backyard, and there’s a balcony that needs to be latched to the main structure. Now, as part-owners, along with EBPREC staff and other investors, the tenants have a say in how all that repair work gets done. 

“This work has really activated some radical things in my heart,” Session said as she unlatched a wooden gate and walked into a courtyard behind the building. Session envisions the tenants, themselves, as a sort of investment in the area. Their involvement with this corner of the city will contribute to the “neighborhood-ness” of North Oakland—the culture of the place, the tight-knit community.

EBPREC stewards four properties like this one, including housing for artists in Berkeley and a West Oakland lot that’s still being developed. In selecting tenants for the properties, Session say her nonprofit considers people’s service to their community and prioritizes indigenous people and people of color.

The cost of housing in Oakland has increased exponentially since the early 2000s. According to Zillow, between 2011 and 2019, the average rent in Oakland jumped from roughly $1,400 to over $2,500 for a one-bedroom apartment. In a 2015 study, the Urban Displacement Project at UC Berkeley found that over half of renters in several Oakland neighborhoods spent more than 30 percent of their income on housing.

That same year, a report developed by PolicyLink and Oakland’s Housing and Community Development Department found that since 2000, Oakland’s African American population had decreased by 24 percent. The median income for the city’s African American, Latino, and Asian households had fallen in that time period. White households, meanwhile, made double the median income of any other racial or ethnic group.

As of 2019, according to a City of Oakland housing report, only 7 percent of the 10,000 building permits issued the previous year were reserved for low-income tenants—far below Mayor Libby Schaaf’s stated policy goal of 28 percent.

Meanwhile, according to a point-in-time count conducted on a single day in January, 2019, by volunteers and staff from the organization EveryOne Home, the number of people experiencing homelessness in Oakland grew to 4,071. That’s more than any other city in Alameda County. Nine percent of homeless people interviewed cited eviction or foreclosure as cause of homelessness, and another 9 percent cited rent increases. 

Some Oaklanders have wondered whether there’s a way to reframe how real estate is commodified. What if housing was thought of not as a good, like a car or a new purse, but as a right? And is there a way to prevent housing prices from swinging high—as they have for the past few years—and dipping low, as they did during the recession? 

Several organizations have pushed city officials to finance unconventional housing models, like EBPREC’s North Oakland cooperative, in which an organization permanently owns the land and leases to tenants at below-market rates. Bylaws and a democratic decision-making structure prevent any one member from selling the property on a whim. Usually, the organization takes the form of a land trust, owned by a nonprofit. (EBPREC is actually a for-profit entity, but its staff members have collaborated with local land trusts). In some cases, the trust leases the property for 99 years at a time. A similar model, called a limited equity housing cooperative, allows occupants to purchase shares of a building.

Session, a third-generation Oaklander, worries that as the demographics of the city shift, so does the fabric of its community. She isn’t opposed to change, and she doesn’t want to prevent newcomers from making Oakland their home. But through the establishment of permanently affordable housing, Session has sought a way to allow long-time residents—people with deep engagements in Oakland—to remain in their city.

*****

The housing market in the United States revolves around the idea of private ownership. It’s right there in the Constitution: People have the right not to be “deprived of life, liberty, or property, without due process of law,” and private property can’t be “taken for public use” without compensation.

For people who are able to put money down on a mortgage, a house can be an investment, a college fund, a retirement plan. Homeowners take out a mortgage and pay it down through monthly payments, often over a period of 30 years, hoping that the property will appreciate in value should they ever sell.

According to the Federal Reserve Board, between 2013 and 2016, homeowners’ median net worth grew by 15 percent. Renters’ net worth decreased 5 percent during that time. Homeownership isn’t always stable, though. After the 2008 market crash, a wave of foreclosures forced many Oaklanders, particularly low and moderate-income homeowners, out of their homes.

Renters, meanwhile, hand over part of their income to a property owner each month. In Oakland, rent control policies protect tenants in certain buildings constructed before 1983. For these buildings, the Oakland Rent Adjustment Program limits yearly rent increases based on inflation rates, and requires landlords to give tenants a 30-day notice before an increase. Those rules don’t apply to buildings constructed after 1983. And Costa Hawkins, a state law, allows landlords to raise rents as high as the market will bear after tenants move out, and limits rent control on single-family homes and buildings constructed after 1995.

Then there’s the Ellis Act, a law that allows landlords to leave the rental business. Under this law, if a landlord sells the building, or decides to move into it, they can evict tenants. Together, these laws can make renting precarious for Oaklanders, who have few guarantees that they’ll be able to stay in their homes indefinitely.

But trusts basically remove land from the speculative market, said Zach Murray, program manager for the Oakland Community Land Trust (OakCLT). The nonprofit’s staff manage 24 residential properties and 10 community gardens. For multi-unit buildings, Murray said, “If the average price in Oakland is $800,000, about $600,000 of that right now is land value, and $200,000 is the actual cost of improvements. And so by taking out the land value and removing the threat of speculation over that land, we’re able to cap the price of the home at a much more reasonable rate.”

Like most land trusts, OakCLT relies on municipal housing subsidies to purchase existing properties. Then, by maintaining ownership of the land, OakCLT can sell a single-family home for about $200,000. A resale formula, which is attached to a lease, dictates how much a homeowner can sell the home for. If residents move out and sell their building or unit, the formula limits the sale price, making it accessible for the next low or moderate-income Oaklander. Residents of the organization’s multi-family units rent below market rate, too.

In EBPREC’s case, as a for-profit organization, they can fundraise the money necessary to purchase property.

In July, Oakland City Councilmembers allocated $12 million from Oakland’s 2019-2021 budget towards purchasing existing rental units and converting them into land trusts or limited housing equity cooperatives. The funds are reserved for the purchase of buildings with fewer than 25 rental units. Revenue for the fund comes from Measure KK, the $600 million bond measure passed in 2016 that funnels money towards affordable housing, street repair, and improvements for libraries and recreation centers. 

District 2 City Councilmember Nikki Fortunato Bas authored the proposal with input from staff at OakCLT and Alliance of Californians for Community Empowerment (ACCE). “As I’ve seen Oakland change over my two decades living in Oakland, I’ve really been interested in this idea of creating more permanently-affordable housing,” Bas said. “Land trusts and co-ops have an interesting model that’s different from the regular capitalist market that I think better protects housing affordability, because there’s community ownership.”

During the 2008 recession, “it was really heartbreaking to see some of my neighbors and so many Oaklanders lose their homes to the foreclosure crisis,” Bas said. That experience led to her interest in alternatives, ones that wouldn’t put residents at risk of foreclosure or eviction.

For many of Bas’ constituents, the threat of displacement is very real, said Miya Saika Chen, the councilmember’s chief of staff. “We have so many constituents who are parents of young kids, who have lost their homes or been evicted, or [are] staying with friends or families,” she said. It’s hard “for working people, everyday people in Oakland who’ve been here for generations, to keep up with what the market is doing, as far as housing goes.”

This isn’t the first time Oakland has funded community land trusts. The city received $8.25 million from the federal Neighborhood Stabilization Program as part of a federal funding effort to prevent foreclosures. City staff worked with the Oakland Community Land Trust—a fledgling organization at the time—with the aim of acquiring 200 foreclosed homes. Ultimately, the organization only purchased 17 buildings. 

This time around, “it’s an entirely different ballgame,” said James Yelen, program officer for Enterprise Community Partners, Inc., an affordable housing policy and advocacy organization. It’s a local program, not a federal one, with significant input from community organizations. “Another big difference is that there’s been a pivot from vacant to occupied” properties, Yelen added, with priority given to buildings whose tenants are “most vulnerable to displacement.”

Murray said the mid-size, multi-family buildings this fund will purchase are “the overwhelming majority of the housing stock, 88 percent or so,” in the city. And people who live in these buildings are particularly vulnerable to displacement, “because there are no major subsidy sources at the federal or state level for that scale of housing,” he added. “So we wanted to create a fund that really addressed that critical local need.”

On December 6, Oakland’s Housing and Community Development Department issued a Notice of Funding Agreement, the document that defines the terms of awards and invites organizations to apply for loans. An organization can request funding for up to two projects, and applications are due in January. There’s a cap of $3.75 million per project. No more than 10 percent can go to developer fees—so most of that money has to pay for building purchase and rehabilitation.

The funding can be applied to the acquisition and rehabilitation of existing housing, to be converted into “shared-equity ownership tenures that are permanently affordable.”

Currently occupied buildings, especially where tenants are at risk of displacement, will be given priority. If a landlord has a history of breaking municipal codes, if a property is in poor condition, or if a building is not subject to rent control, that may increase the likelihood of an applicant receiving funding.

Greg Jackson, EBPREC’s partnerships director, said the organization is considering submitting an application for funding. Rick Lewis, the executive director of the Bay Area Community Land Trust (BACLT), whose staff manage cooperatively-run, permanently affordable housing in Oakland and Berkeley, hopes to apply as well. 

“We’re excited that the city is making funding available specifically for community land trusts to permanently preserve the affordability of these smaller buildings where tenants are likely to be at risk of displacement,” Lewis wrote in an email.

*****

Early on a Sunday morning, Regina Mouton opened the door to her Berkeley home with a toothbrush in her hand and her hair pulled back into a bun. She waved a visitor into the house, a brown-shingled, century-old home on a quiet street. It was cozy and a little creaky, with some mysterious hallways and inexplicably placed doors, in the way of old houses.

And it was quiet, as if Mouton had the place to herself. But she didn’t. Moulton shares the first floor of the building with her 24-year-old son, as well as another family, a mom with two young kids. More tenants live in another unit upstairs. The house, and two others like it on the same plot of land, belongs to a community land trust.

“I’m kind of an introvert, kind of a loner, and I like my private space. But I feel like in this setting, as I age, it makes so much more sense to share properties with people who have the same needs,” Mouton said. “Everybody needs privacy sometimes, but working together, we just maximize our resources.”

The $12 million from Oakland’s budget was set aside to create more spaces like this: multi-family residences on land held in a trust. A nonprofit, BACLT, manages the land beneath the houses and leases the buildings to tenants. Mouton and her roommates collectively pay the nonprofit $1,500 a month for their three-bedroom, first floor unit. (In Berkeley, the median rent for a three-bedroom is $3,500, up 11 percent between 2018 and 2019, according to a market report drafted by the city’s Rent Stabilization Board.)

When costs change, the 15 adult members of the land trust negotiate how much each tenant’s rent will increase, based on factors like age, job, and number of dependents. “Like, what happens if somebody loses their job, right? You don’t want to raise your rent so that it’s not affordable,” Mouton said. “People in the collective are a little bit older, and older people are at greater risk of losing employment or getting sick.” 

“You have to just get together with other people and make things work,” Mouton continued. There’s a finance committee, a maintenance committee, and a residence committee tasked with finding new tenants when a unit opens up. At general meetings, held once a month, residents talk about money, subletting, and general upkeep. “Not everybody is built for that,” Mouton said, of the intense and deliberative decision-making process. “I feel like I am really built for that. It’s a lot of sacrifice.”

Behind the house, the three homes frame a sprawling backyard. A little pathway leads to several raised beds, full of kale and other winter vegetables, and a persimmon tree that doesn’t bear much fruit.

Mouton grew up across the bay, in San Francisco, where she feels she benefited from community resources like parks, free museums, and a good public school education. A painter and printmaker, she moved to Oakland in 1987 for the city’s artist community and readily-available studio space. “There were lots of big old factories that had been artist spaces for a long time,” she said. Eventually, she purchased property with her then-husband.  

But in 2009, she lost the property during the mortgage crisis. A friend suggested she and her son move into a co-housing space, and that led Mouton to BACLT, and, in 2015, to this house. Now, she sits on the land trust’s board, which is comprised of staff, residents, and other community members. 

“My mom and her siblings moved here from Louisiana ages ago,” Mouton said. “The route to equal citizenship was owning a home, having a job. And for most of my mom and her siblings, that served them well. But by the time our generation came—I mean, I could feel it shifting a lot.” As an artist, Mouton felt she’d been introduced to other ways of living. “I feel like I had other choices that my parents didn’t,” she said. 

Curled up in a chair in her living room, holding a cup of coffee, Mouton said that residents do much of the maintenance work themselves. Her son worked with an older tenant to deal with termites and to repair rotting wood underneath the front porch. Re-shingling is next on the to-do list. The windows need fixing, too, but they’re tabling that discussion until next year.

When Mouton tells acquaintances about her living situation, they’re often confused. “It’s like either you own a home or you rent a home,” Mouton said. Most people she meets aren’t familiar with any alternatives. Her family wonders why she doesn’t buy a house. “At this point in my life, it’s not a priority,” she said. “I’m very satisfied here. There’s nothing permanent. There’s nothing forever. I feel like I could be happy here—and that homeownership is not key to my survival or my existence here.”

*****

Advocates for community land trusts say the model prevents displacement and disrupts economic swings in a way other types of affordable, below-market-rate housing can’t. 

“CLTs are informed by the idea that we hold and steward land in common, and that the way that we’ve set up real estate markets and property relations doesn’t really reflect that,” said Miranda Strominger, the program manager for BACLT, which owns Mouton’s home. “And this is an attempt to acknowledge that land should not be for profit, that housing should not be for profit.” She envisions, instead, a future in which land and housing are “geared towards serving the collective good.”

Though residents of land trusts and co-ops invest at a lower rate of return than a homeowner would, they still have an opportunity to build equity. Residents of OakCLT’s single-family homes are guaranteed an equity appreciation of at least 2 percent per year, or the consumer price index, whichever is greater, said Steve King, OakCLT’s executive director.

That’s not the case for most renters, points out Zach Murray, of OakCLT. “For the most part, in the conversation about affordable housing, we’re not talking about ownership, we’re talking about income-qualified rental,” he said.

Advocates say these smaller returns are a worthy sacrifice for a stable and more broadly-accessible system. “This isn’t an investment opportunity, because it’s taking out speculation. It’s about building security,” Murray said. “If we’re all banking on the average listing price in this country going to half a million dollars for a property, that’s going to exclude so many more people than not. But because we’re all in that investment mindset of wanting to gain, that’s kind of where we’re at. We’re all gambling against each other. And housing—if we believe it’s a human right—can’t work that way.”

Certain land trusts offer a kind of stability other affordable housing programs can’t: Homeowners don’t lose housing if their income rises. In some affordable units, including federal and state housing programs, eligibility is restricted to people whose income falls below a certain amount. If a tenant’s income increases, their rent could increase, or they might have to move. At OakCLT, homeowners only disclose their income once, when they’re applying for housing. After that initial review, there are no caps on a homeowner’s income. If the owner gets a different job, or their pay goes up, they can remain on the property. Renters in CLT properties may still have to qualify annually.

Intertwined with co-ownership is the idea of self-governance. Most land trusts and co-ops require tenants to make decisions with other residents, neighbors, and staff—much like Regina Mouton’s monthly meetings with her housemates. Residents of Oak CLT properties go through a five-year training process, through which they learn to manage their units. “So they’re involved in the self-management of properties, literally, in terms of stepping into a management role,” Murray said. “But they’re also involved in the board of the land trust.”

That’s not the case with most subsidized housing programs, he said, which rely on an external property manager. “So the residents are sort of passive participants in their housing,” Murray said.  

But nonprofits aren’t exempt from market pressures, and it can be expensive for the board of a trust to purchase multi-family properties. Unless they can solicit a donation from a sympathetic landlord, staff purchase the building just like any other buyer. That can take time—and money. “As prices have gone up, we’re having to purchase for above $500,000” per building, Murray said.

City funding to support these purchases could make a big difference, then. And Oakland’s $12 million funding pot is “almost unheard of,” King said, in a phone conversation. “In the United States, there’s never been a concerted effort to meaningfully scale this model” of land trusts and limited equity co-ops. But King’s already thinking bigger. “We also need the state and the federal government to invest in this as well,” he said.

***** 

On a Saturday in November, protestors gathered in a circle in Mosswood Park. “Marched right up to the developer class, and took back what they stole from me,” they sang. 

A few days before, two Oakland mothers had shown up at an empty, three-bedroom West Oakland home and declared it theirs, saying no property should be vacant while parents and their children were homeless. The moms, Dominique Walker and Sameerah Karim, said they’d struggled to afford housing in the area, even while working full-time. A real estate firm that specializes in rehabbing distressed properties owns the building. 

(By early December, the mothers were still there, although they had received an eviction notice. If sheriff’s deputies arrive to enforce the notice on December 17, Marisa Kendall of The Mercury News reported, the mothers don’t plan to leave.)

In the wake of the moms’ action, a group of housing activists convened at the park with plans to march through Oakland to demand changes to local housing policy. That morning, several of them outfitted an enormous U-Haul pickup with huge banners that read “Occupy homes” and “Rent control for all: repeal Costa Hawkins.”

As onlookers arrived, members of ACCE, the group that advocated for land trust funding in Oakland’s municipal budget, climbed into the truck bed to address the group. Norma Sanchez, a tenant organizer, took the microphone. In 2017, after she received a notice of a large rent increase, Sanchez organized her neighbors to purchase their building and transform it into a land trust with the help of OakCLT. As she stood in front of the crowd at Mosswood, Sanchez spoke about evictions and the cost of housing. “Yo fui uno de los afectados,” she said.

“I was one of the affected with this rent increase,” echoed a translator who stood next to Sanchez. She continued: “I’ve been seeing so many constructions of buildings. It is not possible that they want so much for rent, even though so many of the people, they don’t have money to afford those rents.” 

Permanently affordable housing was a key part of the protestors’ demands. The day before, ACCE members had visited the offices of several banks, including Chase and Citibank, demanding that their executives contribute foreclosed properties to land trusts.

“ACCE has a longstanding history with the Oakland Community Land Trust. We helped, I think it’s seven or eight families who were fighting displacement,” said Anya Svanoe, the group’s communications director, as protestors sang and chatted beside her. “They were given huge rent increases and were on the verge of becoming homeless. And instead they ran a campaign and got their landlord to sell their homes to the land trust, where they’re now homeowners.”

“Wells Fargo has said that they’re donating $1 billion to affordable housing, but we want the community to be part of the decision-making process of how that is spent,” Svanoe added. She argued that large banks are responsible for the area’s housing market because of previous predatory lending practices, referring to high-risk loans and other unaffordable or underhanded financing strategies. “We would like the money to be used to help purchase properties to get off the speculative market,” Svanoe said.

Standing in the crowd, Oakland resident Sarah Carroll said she admired the mothers who occupied the house. “It’s devastating to see so many of our neighbors living on the street,” she said. “Oakland used to be a community that people could afford to live in. And $2,500 to $3,000 a month for a one-bedroom apartment, in my mind, is not affordable.”

Nearby, Oakland resident Chaga Kwania watched the speakers as his daughters stood beside him, giggling with each other. “I’m from Oakland so I know what’s going on with the housing crisis—the increasing evictions that have been going on here in Oakland, and the displacement of a lot of people that I know are from here,” Kwania said. “I would like to see the city actually come up with something for the homeless folks here.”  

A protestor walked by, holding a sign with an image of a homeless encampment. “21^st century affordable housing? Unacceptable,” the sign read. 

The protestors planned to end their rally by marching to a site where three boarded-up houses had been slated for a demolition. ACCE organizers would use these homes as examples of buildings that could be transformed into permanently-affordable housing. 

From the U-Haul truck, Sanchez called out to crowd. 

“We want fair housing!” she cried.

The crowd began to clap and cheer. 

“We want fair housing!” Sanchez said again. “Sí se puede!”

Correction: A previous version of this article said that community land trust residents only have to income qualify once, when they’re applying for housing. This story was updated on December 18, 2019 to reflect that Oakland Community Land Trust homeowners only have to income qualify once. Renters may have to qualify annually.