[E]ven though Lawrenceville might have the hottest housing market in the city, Lawrenceville Corp. director Matt Galluzzo says plenty of low-income residents still live in the neighborhood. More than 800 Lawrenceville households qualify for food stamps.
“Behind that veneer is still a neighborhood with considerable need,” says Galluzzo. “We want to work to ensure security and stability in the neighborhood, and hopefully the land trust will address that.”
The corporation has purchased one property, and is set to close on three others. The CLT’s plan is to build or rehab seven homes in Upper Lawrenceville. To maintain permanent affordability for the properties, Lawrenceville Corp. will retain ownership of the land, but will sell the homes to residents who qualify by earning 80 percent or less of the area’s average income — about $55,000 for a family of four.
Nusser says the land trust makes home ownership affordable for folks from a different income bracket than those currently snatching up properties. The neighborhood is experiencing a trend where many homes are being bought as investments through limited liability corporations (LLCs). According to the Wall Street Journal, LLC home-buyers are usually wealthy and use LLCs to remain anonymous and to receive significant tax breaks; they rarely live in the homes. In 2012, Hawaii had the highest percentage of LLC-purchased homes of any state, at 11 percent. Galluzzo says that over the past three years in Lawrenceville, LLC-purchased homes have made up 27 percent of the market.
CLTs have built-in protection against LLCs and other high bidders. In CLTs, residents own the homes but not the land. That, says Nusser, allows them to grow a limited amount of equity, but leaves them unable to sell the property to the highest bidder. Instead, Lawrenceville Corp. will manage the sale of the property to another low-income buyer. Nusser says that land-trust homeowners can make alterations to their properties and will otherwise have all the freedoms of a typical homeowner.
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