Land trusts and their buyers typically pay market rate for houses, but make them more affordable by separating ownership of the home from the land it's built on, giving the buyer title to the house and the land trust title to the land. In Edina, where the value of a standard city lot can easily top $200,000, the model can dramatically increase affordability.
Land trust buyers must agree to various resale terms including a pricing formula that puts a cap on the resale price of the home, and a promise to sell to another income-restricted buyer or the land trust. Land trusts often contribute additional subsidy to reduce the cost of the home, but they also invest in improvements that ensure buyers don't encounter unforeseen expenses. While Homes Within Reach typically works with buyers who earn 60% of the area median income (AMI), the income limit in Edina will likely be closer to 80% of AMI.
Edina's Not a Teardown campaign targeted about 3,200 houses with an assessed value of $425,000 or less, including properties that are being used as rentals.
"The response has been crazy successful," said Hawkinson, noting that the option is particularly appealing to homeowners who want an easy sale without the hassle of readying a house for traditional showings.
Shortly after the mailing went out, she received more than a couple dozen inquiries. About half of them say they're seriously interested in selling in the very near future and the calls are still trickling in.
Hawkinson acknowledges that many people in the city might not take kindly to a program that caters to lower-income buyers or puts a cap on resale values.
"This will ruffle some feathers so I have to see how the dust settles," she said. "I'm sure some ended up in the junk mail pile."
Edina's Not a Teardown campaign comes at an especially challenging time for land trust buyers who don't have the resources to outbid traditional buyers.
"The reality in this market it's tough to get anything for less than $300,000," said Lano-Wolke. "We have been competing with anywhere from 10 to 21 other offers."
She recently raced to preview a $269,000 house that was about to hit the market in another west metro suburb. At least 50 interested parties were already at the home. The seller got 51 offers.