This essay as told is based on a conversation with Melisa Gomez-Romo, 40, an associate at One Roof, a nonprofit organization that provides housing services to Minnesotans. In 2022, before she started working there, she and her husband purchased a home for their family of five in Duluth, through One Roof’s community land trust program.
Community land trusts allow low-income home buyers to purchase homes at a discounted price in exchange for the trust maintaining ownership of the land. There are 471 accredited land trusts in 46 states. Here’s a way to find one near you.
The essay has been edited for length and clarity.
My husband and I moved to Duluth in 2018. We had a goal: either buy a house within five years or move back to Fayetteville, Arkansas.
However, post-COVID, the real estate market has become truly unaffordable here. Duluth is considered a climate paradise, which is why people with higher incomes have moved to the area and purchased huge amounts of property. This caused real estate prices to rise.
A few years ago, you could buy a first home here for $90,000, but prices have increased considerably. Now homes cost between $170,000 and $500,000.
With house prices rising dramatically, we were afraid we wouldn’t be able to get housing without help – that if we went to a bank we might go out of business because our credit score wasn’t good enough or our student debt would be too high.
Community land trusts were an unfamiliar concept
I learned about community land trusts while driving through a neighborhood. I noticed a house with a for sale sign, as well as another that said “One Roof Housing.”
I searched for the house on Zillow and learned more about One Roof. It is a community housing organization that provides homebuyer education and also sells affordable homes through a community land trust program.
Community land trust programs work like this: you buy a home from the organization, but rent the land underneath, which reduces the cost of the home – homes sold through the program are sold below the rate of the market. When you decide to sell the house, you must sell it back to the organization, and the organization receives a portion of its equity.
There are different methods of acquiring homes: some are sold to One Roof specifically for the Land Trust program, and others are sold back to the Land Trust program.
This was a new concept for my husband and I, but it opened up the possibility of one day owning a home.
Sometimes that’s all we need: the seed to plant.
My family doesn’t come from money
When we first moved to Duluth in 2018, we lived in an apartment complex converted from an old school. Although it was affordable (our rent was $995 a month), it was built in the 1800s and was deteriorating. Every time it rained, the windows let water into our apartment.
We also lived in a rough part of town, but we knew we didn’t have the credit or money to buy a house. We decided to focus on the stability of our children, who had been diagnosed with autism, and on strengthening our credit.
Gomez-Romo’s children. Courtesy of Melisa Gomez-Romo
When year three rolled around our apartment, my husband and I finally had the credit and money to consider homeownership.
At the time, a very good friend purchased a land trust home with One Roof. She encouraged us to try the process. My friend is Mexican Ojibwe and a single mother. I thought, “If she can do it, maybe we can do it too.” »
I am Hispanic. My parents were immigrants from El Salvador. My husband is a first generation foster child of Mexican descent. For people like us, who don’t come from generational wealth, word of mouth can be very important.
This is because when you hear about the home buying process from someone who shares similar life experiences with you, it gives you more credibility and makes it more realistic.
My husband and I became first-time home buyers
In 2021, my husband and I took a home stretch workshop with One Roof, which taught us how to become a homeowner.
One of the key learnings from the program was that the cost of moving into another apartment was comparable to a down payment on a house. We also learned that banks offer programs that could help us become first-time home buyers.
Growing up in a Hispanic household, you sometimes don’t know how to talk to lenders or the bank. So it was necessary for us to have someone say, “Hey, we can help you with the whole process.”
Additionally, learning that we had enough money ($5,000 in savings) and the criteria for homeownership (a 750 credit score) was life-changing.
The family home on a winter evening. Courtesy of Melisa Gomez-Romo
By 2022, we had become first-time home buyers. Thanks to One Roof, we purchased a cute little house in a perfect neighborhood for $135,000. We have a 99 year lease for the land under our house, with a monthly rental fee of $35 to One Roof.
Before we moved in, One Roof repaired it from the basement to the roof – and that was something very important to us. With the harsh winters in Duluth, snow can ruin a basement or home’s foundation.
Our house was built in 1910 and has three bedrooms and one bathroom. Its value is estimated at $175,000. If the house had not been owned by the land trust, we would not have been able to purchase it at that price.
Our lives are much better
When you purchase a land trust home, not only must you qualify for the land trust program, but you must also qualify for a mortgage with the bank. Everything the bank requires for a typical house will be exactly the same.
In 2022, the One Roof Land Trust requirements were that you could not exceed an annual gross income of $70,850.
The only difference is that you must make a separate appointment with a lawyer to sign a legal document stating that you are leasing the land. Additionally, for insurance purposes, the land trust is listed as part of the home ownership.
Having a house is a very important deal for us, as it did not seem feasible due to our financial situation.
If it was just the two of us, my husband and I could have stayed in an apartment – it might have been manageable. But the children needed a lot more space and privacy.
Now we no longer have to share community spaces, like a laundry room, and our kids have a front and back yard. We also don’t have to worry about rent increases every year when we renew our lease.
Gomez-Romo’s children in their garden. Courtesy of Melisa Gomez-Romo
When my husband first applied to get our land back, we had talked to many people and heard negative things about it. People would say, “You’re not getting the full percentage of the equity in your home.” And we’re like, “All the money we have is going to rental now, so we’re not losing anything at all.”
People also said, “Oh, you’re not going to make any money on the house.” »
But I think of it this way: If we were to sell our house back to the land trust, we would continue to help make it affordable for the next family. So it doesn’t bother us at all.
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