Expanding affordable housing options in Waco is no small task in a city where home prices have raced ahead of median incomes.
One solution that’s gaining ground among local housing advocates is to sell homes, but not the land underneath them.
A “community land trust” allows a nonprofit organization to own and manage home sites, leaving the homebuyer to pay for only the home.
It was one of several proposals city staff presented to the Waco City Council in a work session Tuesday following up on initiatives set in motion by the 2022 Waco Strategic Housing Plan.
Local housing nonprofits have been discussing the idea for several years as a way to curb runaway housing costs. Separating the house from the land it sits on is intended to mitigate property speculation while keeping participating residents’ property taxes down.
“It also provides a gateway to homeownership for lower income brackets not served by traditional housing resources,” said Galen Price, Waco Housing and Community Development director.
“(They) can also be used to combat gentrification and avoid displacement among residents,” he told council members on Tuesday. In a typical community land trust development, homes are priced below market rate and cannot be sold in the future at market rate.
At the Houston Community Land Trust, which Waco staffers have studied as a model, the resale price is fixed at the initial purchase price, plus 1.25% appreciation each year, allowing homeowners to build equity “while ensuring the home is affordable to future limited-income buyers at resale.”
Price also detailed a separate but complementary initiative to establish a “land bank,” which could acquire foreclosed properties and preserve them for the community land trust. Since 2024, Waco city staff and a consortium of local housing organizations have researched what it would take to implement community land trusts in Waco.
The U.S. has some 300 community land trusts, but Texas has just seven, all in big cities such Houston, San Antonio, Dallas and Austin. If one were established in Waco, it would be the first of its kind for a medium-sized Texas city.
City officials estimate that it would cost $1.5 million to establish, operate and provide staff for a 10-property land trust. About $1.25 million of that total would be one-time expenses subsidizing home construction to a level that low- and moderate-income residents can afford, Price said.
A five-property trust would cost around $850,000, with $630,000 dedicated to home construction. Raising those funds could be more of a hurdle for a city of Waco’s size than in Dallas or Austin.
Options for public funding, private funding or a combination of both, are currently being explored, as is a city ordinance allowing community land trusts to be established in the first place, Price said. Waco Mayor Jim Holmes expressed openness to the idea but returned to the topic of funding.
“It seems like you need capital to get those cranked up,” he said. In interviews this week with The Waco Bridge, officials with local housing nonprofits voiced support for community land trusts.
“I think it’s a great opportunity to provide affordable housing that’s going to be perpetual,” said Delisa Burnell-Smith, president of NeighborWorks Waco, a nonprofit focused on increasing homeownership and access to quality rental housing.
“East Waco, North Waco, South Waco will be ideal for programs like this,” Burnell-Smith said. “The most important thing is getting people into homes and building generational wealth.”
She said the program could insulate homebuyers from skyrocketing property values in Waco, a trend which could pick up speed as the city redevelops swaths of downtown and completes major park projects.
Between 2015 and 2025, the median price of a home in the Greater Waco area more than doubled, from $137,500 to $285,000, according to the Texas Real Estate Research Center.
By contrast, the median household income within the city of Waco increased from $33,147 to $54,500 during the same period, a 66% change, according to data from the Heart of Texas County of Governments and Prosper Waco.
Lee Scheffe, a community organizer with housing nonprofit Grassroots Waco, sees land trusts as a promising buffer against rapid changes in land value and home prices especially in low-income neighborhoods in areas such as East Waco.
“I think the real strength of CLTs is keeping the land out of the real estate market, (which) prevents prices in the long term from rising on the property,” Scheffe said. “(That) means that affordability can be maintained over the long term.”
A 2019 Rutgers University study demonstrated how land trusts have beneficial effects for homeowners and surrounding neighbors during economic downturns, too.
Researchers found that during the 2008 foreclosure crises, Minneapolis neighborhoods with greater concentrations of community land trusts saw home values stabilize faster than neighborhoods where they were few or absent.
Waco Habitat for Humanity Executive Director John Alexander is a fan of the model, but he said there are still important conversations to be had with buyers in a city and a state where property ownership is sacred.
“The downside of (the model) is the homeowner doesn’t own the land. In Texas, that’s a really hard sell,” Alexander said, but “the house is more affordable because they don’t have to pay for the land.” “It’s going to require a lot of education,” he said.
