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In effort to preserve affordable houses, booming Minnesota city takes aim at 'teardowns'

Jim Buchta, Star Tribune on

Published in Home and Consumer News

"When you're working as a nonprofit and being mindful and respectful of the process and the funders and our mission, our hands are tied," she said. "We can't overpay to get a home.

A shortage of affordable house listings isn't the only challenge for land trust buyers. Rising home prices are accompanied by higher property taxes. Though land trust buyers don't technically own the land, they're now responsible for property taxes on both the land and building.

New legislation that aims to change that equation is being promoted by land trusts in Minneapolis and St. Paul. The bill, which has a sponsor in both the House and Senate, says that land trust properties would get an across-the-board 25% discount compared with traditional owner-occupied properties that's akin to the discount owners of income-restricted rental property owners already get.

"We make the house affordable initially for the first family, but the market continues to go up and incomes have not kept up for the families that we serve," said Greg Finzell of the Rondo Community Land Trust in St. Paul. "We've been looking at everything we can to help long term to keep costs affordable."

Steve Bubul, a retired tax attorney who is on the Rondo board, said residents have become increasingly concerned that they'll be priced out of their properties. He said that residents have already agreed to restrictions that limit the amount of equity they can accumulate, so it makes sense to also limit their tax burden.

Jeff Washburne of the City of Lakes Community Land Trust in Minneapolis said a similar tax relief proposal is already underway in that city, but he's an advocate of applying the same formula to all land trust properties across the state.

 

While long-term affordability is a high priority, Lano-Wolke said her focus is on finding suitable listings for would-be land trust buyers. So far this year she's reviewed at least 30 homes throughout the west metro. She's made about a dozen offers, but has been able to acquire only four homes. During a normal year, she says, the goal is to acquire about a dozen properties.

Already, she's met with at least a dozen or so prospective Not A Teardown sellers in Edina, where Moore and Guajardo are in the process of finalizing the terms of their sale.

Moore said although he's committed to selling to the land trust, other unsolicited offers are still landing in his mailbox. He knows that one of them might be willing to pay more than he's getting from the land trust, but he's not second-guessing their decision.

"There's a social value component to this program that really speaks to us," he said. "We're leaving in the best way possible."

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