Case Study: Irvine Community Land Trust - Irvine, California

The Irvine Community Land Trust (Irvine CLT) presents an example of a city-established CLT designed to support infill development of sustainable, permanently affordable housing. The CLT’s developments meet the City’s green housing standards by incorporating green design features (like energy and water saving utilities, low-energy lighting, renewable energy power). Housing developments also incorporate other community amenities like parks, community space, and community gardens. Additionally, Irvine CLT is building housing to provide services to residents with special needs; for example, its Doria housing project reserved 10 percent of homes for people with a history of homelessness, including veterans and people with mental illnesses. This example also demonstrates how cities can play a foundational role and help CLTs build up a portfolio of housing. Irvine took a leadership role in establishing the Irvine CLT and supported initial CLT housing projects. The Mayor served as the CLT Board’s first chair, and the city has had tremendous success in producing and preserving affordable properties through direct transfer of property from the city’s Inclusionary Zoning requirements to the CLT’s portfolio. Since its initial establishment, the CLT has transitioned to an independent nonprofit, but the city’s early support was critical to building the capacity of the CLT to acquire lands and develop affordable housing projects. 

Background

The City of Irvine, in Orange County, CA faces challenges with both affordable housing and a changing climate. Located inland approximately 12 miles from the coast, Irvine is the third most populous city in Orange County, California. This region of Southern California is anticipated to face increasingly severe heat waves, and water supply challenges as a result of saltwater intrusion and increasing drought.1  

In addition to climate resilience challenges, Irvine also faces significant affordable housing shortages. In 2005, the city convened a Housing Task Force to address the housing crisis in the region. The Task Force reported that from 1980 to 2002, median home prices (currently at $800,000) increased at more than double the rate of wages.2 At this same time, the city was anticipating expiration of inclusionary zoning covenants, which required affordable rental rates for low- and moderate income households and expiration threatened to further limit the city’s supply of affordable housing.3 The Task Force’s 2006 Housing Strategy set a goal of increasing the number of affordable housing units by 9,700 by 2025 and recommended the establishment of a community land trust to help the city meet this goal.4 

In 2005, the Irvine CLT was established to support city efforts to preserve and build affordable housing. Creating a CLT was seen as an opportunity for creating a large volume of affordable units as part of a pending redevelopment project that was slated for the decommissioned 4,700-acre El Toro Marine Corps Air Station site, which was annexed by the city in 2004.5 When first created, the Irvine CLT board was appointed by the city, but over time the CLT transitioned to more of a classic community-controlled governing board. And in 2017, the Irvine CLT incorporated as an independent nonprofit separate from city government.

Projects & Activities 

Affordable Housing: The Irvine CLT currently stewards 327 units of affordable housing throughout the city and has another 148 units in development. The CLT offers sale of homes with a 99-year ground lease to buyers between 80 percent and 120 percent area median income (AMI). Similar to other land trusts, the Irvine CLT offers homes on a shared-equity model where buyers purchase the improvement and get rights to the land through a 99-year ground lease that includes resale restrictions to ensure permanent affordability. Irvine CLTs resale formula allows sellers to recoup their initial investment price, plus the value of improvements, plus some share in the appreciated value at the affordable resale rate, which is based upon AMI at the time of sale. The Irvine CLT also stewards some rental housing, including the Alegre Apartments, a 104-unit apartment complex reserved for renters earning between 30 and 50 percent AMI. Some projects also focus on providing affordable housing options for specific at-risk groups, like veterans, individuals with developmental disabilities, and families at risk of homelessness.

Sustainability & Resilience:  Irvine CLT housing projects are designed to meet the city’s green housing standards,6 which helps to increase the sustainability of housing and lowers the total cost of housing by reducing energy and water bills. Projects meet LEED design standards and incorporate energy efficiency and water savings plumbing features, estimated to save residents on average $600 per year on heating and cooling costs.7 Drought tolerant trees and landscaping are used to reduce water use, increase water retention, and to maximize natural shade. Housing projects also incorporate community amenities, such as community gardens, community centers, pedestrian paths, exercise facilities, sports fields, and other natural features and open space.  

State & Local Support 

The city played a foundational role in creating the Irvine CLT. It provided an initial start-up grant of $250,000 to establish the CLT. The City Redevelopment Agency also provided staffing for the CLT and provided the technical “know-how” to help the land trust initiate its first projects. The Mayor and a City Councilmember served on the CLT’s board to help ensure coordination between the CLT and the city’s housing programs.8  

Additionally, the city helped create an initial pipeline of units into the CLT’s portfolio by providing for the direct transfer to the CLT of affordable units required through the City’s Inclusionary Zoning Program. Irvine’s inclusionary zoning rules require that developments over 50 units dedicate 15 percent of the units as affordable housing. Developments under 50 units can choose from a “menu of options” in lieu of providing affordable housing, including converting existing market rate housing to affordable housing for a period of 30 years, extending existing affordable housing covenants for a period of at least 40 years, paying in-lieu fees, transferring control of the units to a nonprofit housing agency, and dedicating land for affordable housing, among other options.9  

Funding & Financing

Irvine CLT works through public-private partnerships with for-profit and nonprofit developers to build and finance affordable housing projects, including by leveraging Low Income Housing Tax Credits and other local funding sources. The CLT also uses funding and loans from the Irvine Redevelopment Agency to support development projects and has tapped financing from the Orange County Health Care Agency to provide housing to people with special needs. Projects also often leverage Community Development Block Grant and HOME funding from the U.S. Department of Housing and Urban Development.10 

Lessons & Considerations

Cities can successfully establish and spin off CLTs to advance both affordable housing and community empowerment goals. The Irvine CLT shows how start-up support and enabling policies can help to build up the expertise, financial stability, and portfolio of housing that is needed to firmly establish and root a CLT in the community. Once established, the CLT can be transitioned to an independent nonprofit, enabling the CLT to center community members in the governance structure and to take on more community organizing and advocacy roles. 

Inclusionary zoning rules and large-scale redevelopment projects present significant opportunities for building a portfolio of CLT-owned homes and rental units. One of the biggest challenges CLTs face is accessing land and units to permanently steward as affordable housing. The City of Irvine used inclusionary zoning rules to encourage developers to create permanently affordable housing by conveying units to the CLT. This not only eases compliance with inclusionary zoning rules for developers, but also creates a pipeline for helping the CLT acquire housing units. 

 

Publication Date: July 26, 2020

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  • Irvine Community Land Trust

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City of Irvine Housing Strategy

Community Land Trusts: Irvine

City of Irvine Housing Strategy

City of Irvine, Green Building Standards