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Using CLTs to support immigrants: Why, how, and what’s next?
February 13, 2024
As small and midsize cities increasingly depend on immigration for population growth, these areas are tasked with making housing affordable and accessible to newcomers. Research funded by the Housing Solutions Lab studies one potential pathway to support the socio-economic well-being of immigrants: community land trusts.
Titled Community Land Trusts in Welcoming Cities: Building Inclusive Housing Models for Immigrants, the study is the first of three projects spearheaded by Lab-funded external teams engaged in local housing policy research in small and midsize cities to be completed.
The research team, led by C. Aujean Lee, Shakil Bin Kashem, and Dwayne Baker, mapped the geography and growth of community land trusts (CLTs), which support long-term housing affordability through shared ownership and financial flexibility. They tracked CLT services marketed for immigrants alongside immigrant-friendly local policies and documented case studies of local efforts to increase housing access for immigrants in Minneapolis, MN; Grand Rapids, MI; and Boise, ID. Their research adds to existing literature that demonstrates the opportunity local governments have in harnessing CLTs for immigrant homeownership, as well as the challenges of limited resources, slow property acquisition, and selection criteria hindering immigrant access.
Why study CLTs and immigration?
Immigration is increasingly relevant to the development of small and midsize cities in the U.S. Since the 1990s, saturated labor markets in traditional hubs for migrants, changes in immigration policy, and increased labor demand in western states have led many small and midsize metropolitan areas to experience significant increases in their foreign-born populations. For many small and midsize cities, the diversification of immigration destinations mitigated population decline.
While immigration has expanded to new areas around the country, immigrant inclusion in U.S. civic, social, and economic life has not grown at the same pace. Decreased eligibility for federal social benefits, unfair wages, and language barriers can make it challenging for immigrants to participate fully and fairly in the economy. Without intentional strategies to support and include immigrants, cities will not be able to see the full benefits of immigration and population growth.
Historically, homeownership has been a central mechanism through which U.S. policy has supported socioeconomic well-being. Homeowners currently enjoy tax benefits, stable monthly payments, the opportunity to lower borrowing costs, and the ability to borrow against and accrue equity. However, homeownership-based policies have not been an effective vehicle for social mobility for all segments of society: beginning in the 1930s, federal efforts to bolster homeownership across the U.S. with affordable, government-backed mortgages were marred by redlining and other discriminatory practices. The federal government attempted to expand homeownership again 30 years later by incentivizing activity from banks, developers, and realtors. However, insufficient efforts to regulate discriminatory activity from private actors failed to ensure that many families of color had access to decent homes in non-segregated neighborhoods, further deepening inequality.
A homeownership-based strategy for immigrants risks similar pitfalls. While owning a home could allow immigrants to access mainstream economic benefits, an uncritical attempt to expand homeownership risks emphasizing preexisting social vulnerabilities. Some housing policy researchers point to community land trusts (CLTs), a housing model that supports long-term affordability, as a method to pursue homeownership in a way that challenges inequities seen in the traditional private housing market.
Strengths of CLTs for immigrant homeownership
CLTs’ community-based nature and commitment to affordability may position them to provide a pathway to immigrant stability through homeownership. One way that CLTs increase the accessibility of homeownership is through affordability. While immigrant income can vary widely, on the whole, foreign-born residents have lower household incomes and are more likely to live in poverty than native-born residents. CLTs can increase immigrant access to housing by purchasing and retaining land ownership, allowing them to sell homes to others at affordable prices.
Another way CLTs support immigrant homeownership is through financial flexibility. Community land trusts are one of many practices emerging from solidarity economy principles, which emphasize collective ownership and community-based practices. This flexibility is important for immigrants, who often rely on informal community-sourced financial tools. These tools can range from resource sharing among immigrant communities to rotating savings and credit associations (ROSCAs), which involve pooling member contributions to distribute as a lump sum to a member of the association. While community-sourced financial support may not be easily recognized by financing eligibility criteria traditionally used by banks, these resources are a vital source of economic stability for many immigrants. After the Great Recession, living near others who immigrated from the same country became a more accurate predictor of immigrant homeownership than household income. In this way, CLTs may be uniquely suited for immigrants by making housing more affordable and financing more accessible.
CLTs in practice
Lee, Kashem, and Baker’s research examined the connections between local government support for immigrants, housing planning, and CLTs. They constructed a database encompassing CLTs nationwide, scrutinizing their geographical distribution, evolution, and the range of services they provide. The research team also studied the interaction (or absence thereof) between Welcoming City programs – efforts that have earned select cities a certification for immigrant-friendly practices – and local CLTs in Minneapolis, Grand Rapids, and Boise. This analysis highlights the gaps and opportunities in coordination between governmental agencies and nonprofit organizations in these cities.
The researchers found that less than a quarter of CLTs were in Welcoming Cities. Within the three case study cities, the researchers found that Welcoming City programming did not include permanent housing efforts. However, the case studies demonstrated specific ways that CLTs addressed the needs of immigrants, independent of local governments’ Welcoming City programming.
In Minneapolis, the City of Lakes Community Land Trust (CLCLT) supports immigrants through innovations in financing. CLCLT worked with a local lender to establish a mortgage product tailored to undocumented households. Additionally, CLCLT does not require a traditional mortgage in the sale of its homes in response to the community lending practices CLCLT staff noticed among East African and Islamic immigrants in their community, likely prompted by cultural and religious restrictions on paying or receiving interest.
The Dwelling Place CLT in Grand Rapids supports immigrant homeownership by providing additional services through community partnerships. Most notably, the CLT is planning to construct a 42-home community in partnership with Bethany Christian Services, a faith-based social services provider with a specialization in refugee and immigrant services. The organization’s current services include foster care for unaccompanied immigrant children and resettlement programming.
In Boise, LEAP Housing provides outreach and reserves housing to help increase homeownership accessibility for immigrants. The organization created videos to explain key parts of the homebuying process and has translated these resources into Swahili, Arabic, Spanish, and Kinyarwanda. Additionally, the organization reserves three condominiums for Welcome Housing – a temporary housing solution for newly arrived refugees.
The researchers also identified nationwide trends in CLT offerings and immigration. Few CLTs in the regions with the highest shares of foreign-born residents listed services specifically for immigrants. While examples exist of how CLTs have supported immigrant homeownership, Lee, Kashem, and Baker’s research suggests that CLCLT, The Dwelling Place, and LEAP Housing may be the exception, not the rule.
Challenges of harnessing CLTs for immigrant homeownership
The limited resources available to establish, grow, and administer support services for CLTs are particularly salient for immigrant homeownership. CLTs only provide a fraction of a percent of housing available in the U.S. market. In 2022, CLTs administered an estimated 14,000 to 17,000 shared equity homes, compared to 82 million total occupied single-family homes in 2021. Furthermore, CLTs may not be well prepared to meet the demand for housing among immigrants. Social networks and social proof are key motivators of immigrant locational patterns, phenomena that contribute to a clustering pattern of immigrants in an area over time. However, Lee, Kashem, and Baker found that CLTs were slow to acquire new properties, leaving them unable to accommodate growing immigrant networks over time.
Further restricting the supply of CLT housing available to immigrants are CLT selection criteria. A national survey of 183 CLTs across the U.S. found that about half of CLTs used selection criteria to prioritize which families had the opportunity to purchase a home. “Existing local residency” was the third most common criterion, behind income and household size. While CLTs may prioritize existing local residency to combat gentrification, this specific criterion has a negative side-effect: cutting off immigrants from an already small supply of CLT-based housing.
Limited resources for immigrant homeownership education and differing conceptions of homeownership-readiness may serve as additional boundaries to the successful use of CLTs for immigrant homeownership. While most CLTs require and connect buyers with HUD-certified homebuyer counseling, many immigrants may benefit from additional translation, documentation, and guidance through the American financial system that may not be part of the standard homebuyer counseling curriculum. Case studies of HUD-certified foreclosure counseling document similar struggles among immigrants using these services. Those from countries where high down payments are the norm may overestimate how much they will need for a down payment, and others may be hesitant to take on a large sum of debt, so additional educational efforts may be necessary to help them. While there is a general strain on resources to provide affordable housing through CLTs in the U.S., immigrants face additional barriers to successfully accessing CLT housing.
How can cities further support immigrants through CLTs?
CLTs present opportunities for affordability and financial flexibility that distinguish them as a potentially strong pathway for immigrant homeownership. However, various limitations in their capacity to provide an ample number of homes and gaps in homebuyer education processes present serious challenges to the full utilization of CLTs in a city’s strategy to increase immigrant homeowners.
Lee, Kashem, and Baker recommend that cities consider the following to increase local capacity for immigrant homeownership:
- Encourage inter-organizational collaboration for housing and immigrant affairs: pursuing intentional connections between government agencies and taking stock in existing non-profit activity can help cities build mutually beneficial programs and cut down on redundancies.
- Encourage local planning that embraces diverse housing types: zoning for a diverse local housing supply boosts general housing affordability and provides more opportunities for multi-family and multi-generational housing.
- Invest in the growth of CLTs: cities can work with local CLTs to develop policy and programmatic supports to increase their capacity to serve community members, including recent immigrants.
For questions about this research, contact C. Aujean Lee, PhD at aujean.lee@utah.edu.
For support on how your city can support immigrant homeownership, community land trusts, and other local housing needs, contact the Housing Solutions Lab team at Ask the Lab.
