Limited-equity co-op model moves Lopez Island affordable housing forward - Salish Current
May 30, 2024
Limited-equity co-op model moves Lopez Island affordable housing forward
Nancy DeVaux

Rose Prust, a teacher at Lopez School, is one of the new co-op owners now putting sweat equity into the Lopez Community Land Trust Oystercatcher Association affordable housing project. (LCLT)

May 30, 2024
Limited-equity co-op model moves Lopez Island affordable housing forward
Nancy DeVaux


Lopez Community Land Trust breaks ground on seventh affordable housing project

The logs piled by the side of the Fisherman Bay Road north of Lopez Village this winter have been replaced by construction activity as the Lopez Community Land Trust (LCLT) begins its newest affordable housing project, once again “unleashing the power of community,” as the organization says in its tagline.

The 5.5-acre property formerly called Fisherman Bay Curve has been renamed Oystercatcher Association, and is the seventh neighborhood of permanently affordable homes built by LCLT since it began in 1989. It is located just north of the Lopez Village Urban Growth Area (UGA) and borders one of LCLT’s existing housing cooperatives, Innisfree, which is within the UGA.

The property is zoned Rural-Farm-Forest and has been approved as Rural Residential Cluster. In San Juan County, Rural Residential Clusters can be permitted in certain land-use designations for up to 12 units, as a density bonus for affordable housing. 

Six new permanently affordable co-op homes are now under construction, after almost a year of delay in obtaining permits from the county during a tumultuous period in the planning department (see “San Juan County permit woes result in director firing,” May 12, 2023). At the time, LCLT Executive Director Sandy Bishop told the Salish Current that the department was characterized by “confusion,” with “no clear avenue to get consistent information.” 

A community design process took place after the land was purchased in 2021 and by 2023, six homeowners were selected from a pool of 30 applicants. The six provided input on design and are now participating in the building process, gaining skills while contributing sweat equity.

A Clearing and Grading Permit was issued last September, and a one-acre building site was cleared, leaving most of the forest intact. LCLT has also created walking trails through the forest.

Mari Nishitani, one of four interns working this summer with Lopez Community Land Trust, preps bales of local haylage for stormwater controls on the Oystercatcher construction site. (LCLT)

A portable sawmill was brought in and “all the lumber was milled on-site from trees on the 5.5 acre property, into siding, trim, shelves, benches and exterior posts,” Bishop said. A mobile wood-chipper has turned the mill ends into sawdust for landscaping, stormwater controls and pathways.

Training and sweat equity

Rose Prust, a teacher at Lopez School, is one of the new co-op owners, and now putting sweat equity into the project.

“Getting this home on Crayfish Way is everything to me,” Prust said. “I moved to the island at a low point in my life. This island accepted me and allowed me to be myself. Knowing that I will be able to stay here in safe, stable housing means more than I have words to say.”

As for the sweat equity component, she said, “Standing on the grounds as we build the houses feels like I’ve come home — and I cannot wait until I can bring my ‘fur babies’ to their new homes. Knowing that the community is not only supporting but giving their time to help us all build our homes, makes me feel closer to the people on this island than I have until now.”

All LCLT’s housing has been built using sweat equity, and LCLT has been its own general contractor, hiring subs and crews. Local businesses, volunteers and interns are used as much as possible to help keep costs down. “These are all wonderful people, dedicated to community,” Bishop said.

Mari Nishitani is a student from Pomona College interning for seven weeks on the construction site. 

“I’ve never done anything like this; it’s my first-time using power tools,” she said. She is learning about how community land trusts work and said she has been “amazed at all the community members involved.” 

She was impressed by the large number of people who attended a recent fundraiser, and she specifically mentioned a volunteer who brings lunch to the crew every day. “It’s amazing to me there is a person doing that,” Nishitani said.

A total of four students will intern this summer for at least six weeks each. The interns are hosted by Lopez Island community members, which reduces the cost of housing for the project.

Designing for affordability, efficiency and beauty

Oystercatcher Association is a co-op of three one-bedroom and three two-bedroom units. LCLT created a design similar to its existing co-ops, which Bishop says are “simple, thoughtful, environmentally friendly, net-zero energy and beautiful.” 

LCLT lists 17 awards on its website that it has received from regional, state and national organizations for innovative, sustainable, high-performance building, and net-zero energy affordable housing.

Bishop wrote in her most recent executive director’s column in LCLT’s newsletter that her commitment to environmental sustainability became resolute in 2008. 

“I had been studying the global climate change impacts, I was inspired by the response of many people, including Bill McKibben and Bill McDonough.” she wrote. “It was clear then, and clearer now, that, in tough times, it is those with the least who tend to suffer the most from catastrophic economic and environmental events. From that day forward I was determined that new housing developed by LCLT would model environmental resiliency and lower household operating costs to protect homeowners from an increasingly volatile world.” 

LCLT uses a limited equity co-op model of ownership, which has a proven track record on Lopez Island for creating affordability for its owners, both now and well into the future. These six homes will have one mortgage of approximately $808,500, with the average individual mortgage of approximately $140,000. 

The Oystercatcher Association site plan includes a parking lot with landscaping, six homes connected with walking paths that lead to the forest, an accessory structure for building materials and two electric-vehicle charging stations — all on one acre. (LCLT)

Owners buy into a project for the cost of a share in the co-op. For Oystercatcher Association, an original share on average is $12,000, including the value of their sweat equity and a down payment. 

A limited equity co-op can be considered a hybrid between ownership and rental. While it retains many of the rights and responsibilities of ownership, LCLT acknowledges it is extremely limited in equity gain.

In addition to the initial co-op member share, homeowners pay a monthly fee that includes a portion of the cooperative mortgage (principal and interest), ground lease fee, reserve fund and maintenance fees plus their utilities. The resale formula does not consider the monthly principal payments made by homeowners; thus, the monthly payment does not add to their equity.

Bishop said that because of the lack of equity build-up “we try never to max out the co-op members in housing related costs, which include the principal and interest based on the portion of the shared mortgage.” 

The limited equity co-op model has proven to be very advantageous for permanent affordability, staying affordable through generations. “People are paying well below market rate for their monthly housing cost” Bishop said, “and the difference allows savings for other investments outside of one’s residence.” 

LCLT also aims to unleash the power of entrepreneurship, co-founder Rhea Miller wrote in “The Field Guide to a Regenerative Economy.”

“When the basic requirements of shelter are assured, individuals have the opportunity to explore hopes and dreams they may have earlier put on hold,” Miller wrote.

This has proven to be true on Lopez Island where nearly one quarter of LCLT’s 60 co-op unit owners have been able to start up their own local businesses, Bishop said, further enriching the community.

Most of LCLT’s projects have served low-income households (with income at or below 80% of Area Median Income (AMI). Oystercatcher Association, however, is able to serve moderate-income households earning up to 115% AMI.

In San Juan County, 80% of AMI for a single person is $51,760, and 115% AMI is $78,600. Since AMI is adjustable by family size, a family of four is considered low-income if their household income is $73,480 or less, and 115% of AMI is $112,250.

Serving moderate-income households is possible only because the major funding source for the project is the San Juan County Home Fund. This local funding source was created in 2018 by a ballot measure approving a 0.5% real estate excise tax for affordable housing, and is available for projects serving moderate-income households, as well low-income. The usual government funding sources are available only to serve low-income households.

Since 2019, the San Juan County Home Fund has generated $13 million for affordable housing. Affordable housing groups have used the Home Fund to leverage additional grants and donations, raising another $34 million, creating a total of $47 million for affordable housing throughout San Juan County.

The San Juan County Home Fund awarded a grant to LCLT for this project of $1,107,000 in 2022, and an additional $250,000 in 2023 to complete the financing. The Washington State Housing Finance Commission has committed to a $900,000 Sustainable Energy Trust Loan, which will finance the co-op mortgage.

With everything in place, it will be a productive summer for LCLT, building upward from new foundations and demonstrating the true power of community, as done so admirably on Lopez Island. 

— By Nancy DeVaux

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