Community land trust helps Sitka mom build a home of her own

Chandra Watson stands in front of the foundation for her future three-bedroom house in January 2021. She and her three kids have a tentative move-in date of July or August. Until then, they’ll live at her mother’s house, where Watson grew up. (Photo by Erin McKinstry/KCAW)

Chandra Watson has been living with her mother on and off her whole life.

Watson, a 34-year-old single mom, works full-time at a local bank and normally waits tables on the side. But that work dried up during the pandemic.

She can’t afford to rent a place right now, so she and her three kids share a corner of her mother’s single-story home — Watson and the baby in one room and her 6-year-old and 11-year-old in the other. She said that’s been particularly challenging during the pandemic.

“It’s been a lot of time together that we’re not used to,” she said. “And there’s nowhere to quarantine. We all have to share a space.”

In 2020, fair market rent for a three-bedroom was more than $1,800 and a 2020 rental market survey placed Sitka’s average total rent higher than any other area in the state. With such high rental rates, saving to buy a house can feel like an impossible dream for many young Sitkans. When starter homes in good condition do come up for sale, the price point is often out of reach for many young professionals.

“It seems like it’s near impossible,” Watson said. “There’s no way I would be able to afford like a $450,000 house that needed work.”

But thanks to a new affordable housing development, Watson and her kids will be moving into a brand new home of their own later this summer. And at $265,000, the price tag is $100,000 less than Sitka’s average listing price. She’ll pay between $1,300 and $1,400 a month for housing.

Chandra Watson, her 1-year-old daughter, and her 6-year-old son play in the living room of her mother’s house where they’re currently living. (Photo by Erin McKinstry/KCAW)

“As a younger, single mother, doing this all on my own,” Watson said. “There was no other way that I think in this town that I would’ve been able to pursue this if it weren’t for this program.”

The first home in the S’us’ Héeni Sháak Community cottages neighborhood was finished last summer, and two others are under construction. The long-term goal is to build a tightly-spaced community of around 14 affordable, single-family homes.

A big part of what makes the homes so affordable is that the homeowners aren’t buying the land underneath. That belongs to the Sitka Community Land Trust, the organization behind the housing development. An empty lot can easily cost $100,000 in Sitka, according to the organization’s co-executive director Randy Hughey.

“There isn’t much land, right? We’re stuck between the Tongass and the Pacific,” Hughey said. “It is common in Sitka to buy land and have someone build a house and the amount that you spent on the land and the house to exceed the value of the home that you create. That you are in a negative position when you get done building it.”

Hughey said a lack of affordable housing has been an issue in Sitka since he first moved here 30 years ago and likely long before that.

“Every single year, housing is a crisis. It’s a tremendous problem — availability, quality of the stock, affordability. There aren’t enough buildings,” Hughey said. “They cost too much, and there’s way too many buildings that people shouldn’t be living in.”

The S’us’ Héeni Sháak Community cottages neighborhood in March 2021. S’us’ Héeni Sháak translates to “Harlequin Duck Creek Area,” according to Sitka Tribe of Alaska culture bearer Chuck Miller. That refers to a nearby creek, also known as Cascade Creek. (Photo by Erin McKinstry/KCAW)

The model

The cottage’s project has been in the works for years. Back in 2015, the city sold the land to the Sitka Community Development Corporation, the pre-cursor to the Sitka Community Land Trust. The land, along with two adjacent lots that the organization still hopes to acquire, was designated for affordable housing by a 2006 referendum. They also received money from the Rasmuson FoundationSoutheast Alaska Regional Health Consortium and other donors.

The Sitka Community Development Corporation started looking into the community land trust model back in 2013. The idea is that instead of selling the land to a homeowner, it’s placed into a trust. Homeowners sign 99-year renewable leases for the land and pay a small monthly fee. They also choose from a handful of designs for simple, small structures, which helps lower construction costs. And the community land trust serves as a resource to the potential homeowner throughout the application and construction process.

“It’s not what will solve the affordable housing problem in Sitka in and of itself, but it matches a piece of the problem,” Hughey said.

There are around 300 community land trusts nationwide, but Sitka’s is one of just three in Alaska. The other two are in Juneau and Anchorage.

The model has been around for 50 years but it’s become more popular over the last decade, said Michael Brown of Burlington Associates, a community land trust consulting firm.

“There’s a recognition of the community land trust’s ability to make sure that housing remains permanently affordable, not just affordable to the initial occupant,” Brown said. “[That’s] … a reason that there’s been growth.”

Affordability sticks with the house over time. If a homeowner decides to sell, the community land trust controls the resale and sets limitations on the new purchase price. That can be a drawback to the homeowner because they likely won’t get as much for the house as they would on the free market. But they will get all of the money they put into it and then some.

For Sitka’s model, that looks like 25% of any increase in appraised value. For example, if the homeowner buys one of the cottages for $200,000. When they want to sell, it’s appraised at $300,000. They get the money they put into it plus $25,000. Then, the Sitka Community Land Trust sells the house to a new buyer for $225,000 — less than its appraised value.

“I want to be very clear that community land trusts are not challenging individual rights to ownership. What we’re really trying to do is help provide access to people who are locked out of that because of market conditions and household incomes. Those are issues beyond their control,” Brown said.

Brown helped Sitka set up their community land trust, which was officially founded in 2016. He said each community’s model is unique.

“There’s a C in CLT. These are community-based organizations … it’s more than simply providing affordably-priced housing. It’s about being good stewards of the land. It’s about creating housing affordability, but it’s also about making sure that services and resources are available to the people who live in the housing,” Brown said. “It’s not about running their lives, but making sure that we’re doing whatever we can to help enhance the likelihood that people are going to be successful over time, helping them to make successful transitions out whenever that’s the right time.”

Chandra Watson and her 1-year-old daughter. “This is where we’re taking care of and still can make plenty of great memories,” Watson said. “It is expensive, but everything else outweighs that.” (Photo by Erin McKinstry/KCAW)

Looking forward

The price point for the cottages isn’t accessible for everyone. Generally, people need to make at least 80% of the area’s median income to afford the payments. That’s around $60,000 for a couple. And even then, many don’t have enough savings for a down payment, especially since the cost of living in Sitka is so high, said co-executive director Mim McConnell.

“We’re trying to get the house prices down enough to make it so people can afford a mortgage. And we’re finding that challenging. We’d love to have the home prices less than they are,” McConnell said.

She said opening up additional financing options, like rural development or VA loans, could help. For now, their target audience is young professionals looking for a starter home, which McConnell said isn’t uncommon for a community land trust.

“And our community needs those people,” McConnell said. “I mean, police officers, fire department, nurses, teachers — they’re all very important parts of our community and if they can’t afford to live here, we’re in trouble.”

It isn’t just the cottages that the Sitka CLT is working on. They’ve also thought about developing individual homes as land becomes available or is donated to the organization. And they’ve thought about working in other communities in the Southeast, like Tenakee Springs.

Sitka’s community land trust does face some hurdles. They still need to acquire two more parcels from the city, which a 2006 referendum designated for affordable housing. And they’ve had to temporarily halt construction on any additional homes because the pandemic has caused the cost of materials to skyrocket, making home prices both unpredictable and unaffordable.

And even for pre-pandemic home buyers like Watson, the price is still steep: she’ll put about half her income toward housing costs. But she said it’s worth it to have a home of her own. Her 6-year-old son Cameron said he can’t wait to paint his own room.

“My mind is like racing with all these different things I can do with the house to design it, how to decorate it, how many just new memories and experiences and traditions the kids and I can put in here,” Watson said. “I’m so excited to have this new start with them.”

After having her third child last year, she thought about leaving for a more affordable place. But now, she said, she’s sticking around for good. This is where her family and support networks are.

This is her home.

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