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Peace Village Co-op
A scalable model for adaptively re-using an underutilized church property to develop a permanently affordable housing co-op for people with very low-incomes.
Location: Eugene, Oregon
Size: 70 units on 3.6 acres
Status: Pre-development
Target Population: 30-50% area median income
Peace Village provides an exciting opportunity to scale up The Village Model—a collaborative, community-based approach to building and sustaining permanently affordable housing.
The Village Model not only reduces costs, it does so in a way that empowers residents through strategies grounded in democratic decision-making, community control, and long-term stability.
This is put into action by combining two forms of shared-equity homeownership in complementary ways— Community Land Trusts (CLTs) and Limited Equity Cooperatives (LECs)—or what we call Cooperative Land Trust Housing.
Primary Benefits of Cooperative Land Trust Housing:
1. Accessible Homeownership
>> Enabling owner-occupied housing for very low-income households…
CLTs commonly consist of single-family houses where individual households must qualify for individual bank loans. This poses major barriers to lower-income households and those with poor credit histories. In our collective ownership model, residents do not need to qualify for a mortgage individually. Instead, the CLT is able to provide a blanket mortgage for the entire LEC project, and any loans remaining from construction can be assigned to the LEC, rather than individual households. Co-ops have also proven to lower monthly housing costs by more than 20% compared to physically similar affordable rental housing managed by the same management companies.
2. Permanent Affordability
>> After a dollar is invested once, it’s there forever…
Our Village Model guarantees that housing developed will be permanently retained at affordable rates for people with low-incomes, whereas conventional low-income rental housing generally only guarantees affordability for 30 years or less. That means that each dollar invested by banks, government, foundations, or donors will go further. LECs preserve the affordability of housing by setting income limits for prospective members and restricting the resale value of a membership share. A partnership with a CLT adds an additional backstop to ensure perpetual affordability.
3. Long-term Stability
>> A multi-layered ownership structure ensures a safe and stable investment…
The CLT-LEC partnership never leaves anyone hanging. If an individual household misses a payment, all co-op members are in jeopardy and the LEC will step in to remedy the situation. As a result, co-ops offer lower risk to lenders and have proven to have lower default rates compared to rental properties owned by both for-profits and nonprofits. In rare cases where the LEC cannot remedy the situation, the CLT provides an additional backstop that will step in as necessary. Studies have found that homes owned as part of a CLT have proven ten times less likely to default compared to in the conventional market.
An excerpt from the Reverend Brian Heron
on the use of church land for affordable housing:
“We can do that!”
Those were the words of Jeanne Schulz, an elder at Peace Presbyterian Church in Eugene, from a tour of Emerald Village five years ago. Jeanne was referring to a Presbyterian Women gathering that was organized around visiting the site where a 22-unit tiny house development was in process on 1.1 acres in Eugene. Jeanne said that the awareness that their congregation was aging coupled with nearly two acres of developable church property led her and her group to spontaneously blurt out, “We can do that!”
Five years later, what was an initial spontaneous fleeting and far flung idea is now becoming a reality.
Square One Villages, the non-profit organization responsible for Emerald Village in Eugene and Cottage Village in Cottage Grove is set to develop Peace Village Co-op, a 70-unit affordable housing community for very low-income residents.