Sitka’s Community Land Trust has perfected a model for connecting moderate-income home buyers with financing to build an affordable home. The SCLT has built and sold eight of 14 proposed 1- to 3-bedroom cottages in a development on Sitka’s Halibut Point Road (the S’us’ Héeni Sháak Community). There are also plans for a four-plex of rental units on the site.
But the Sitka Community Land Trust can’t operate this way indefinitely – not without more land. In a presentation Wednesday (11-15-23) as part of the Sitka Chamber of Commerce’s Fall Speaker Series on Housing, SCLT co-director Randy Hughey outlined some of the challenges facing the trust as it looks to the future after the completion of its cottage neighborhood. He described building affordable housing as being not a problem of construction, but a problem of financing.
In the following excerpt, he explains how the root of the financing problem is the cost of developing land.
“If you have to develop the site, put in the roads and put in the utilities, you cannot produce affordable housing – if the cost of that development is assigned to the houses. It can’t be done. Sorry, the math is twice as expensive as is reasonable. You have to find grants, subsidies. Some way or another to put the infrastructure in, in order to create the houses. The $280,000 home that we’re selling has $35,000 of subsidy from the Rasmuson Foundation, plus the value of the land, which was free from the city. And it’s still $280,000. Right? So if the city or state could give us a vast tract of land, without some serious money, we can’t turn that into houses is the bottom line. But if you think about it, the people on Edgecumbe Drive did not pay for the development of Edgecumbe Drive. They didn’t build that road, and put in that street and put it in the utilities. Nobody does that. Right? Public entities put in infrastructure on public land to create housing. So it’s the same as anyone else. This isn’t particular because we’re a nonprofit. Nobody else is paying those costs either. But they are big.”
Hughey was joined by First Bank’s Sarah Allison (also a board member of the SCLT) and Dawn Wesley, who described the various financing options for buyers of land trust property.
Hughey said a significant barrier to creating more housing was that Sitka was hemmed in by government-owned land. He concluded by saying, “The biggest economic problem and demographic problem the community faces is affordable housing. It’s in the best interest of all of us one way or another to get land into housing.”
