Spotlight

In Oakland, Community-Owned Real Estate is Bucking Gentrification Trend

Sarah Trent | March 12, 2018

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For two decades now, the building at the corner of 23rd and International avenues in east Oakland has been a community hub for people and organizations with few other places to go.

In a neighborhood that is low-income and majority people of color—flanked to the east by the largely Latino/Hispanic Fruitvale district and to the west by a predominantly Asian population—the building and its adjacent garden have offered sanctuary for long-time residents as well as four people of color-led social justice organizations serving their low-income neighbors.

Cycles of Change and its Bikery Community Bike Shop (pictured, above) offers youth programming, bike repair classes, and road safety training; Sustaining Ourselves Locally (SOL) promotes food justice through community workshops and paid youth internships; Shaolin Life runs a martial arts studio where monks from the Shaolin Monastery in China share centuries old traditions; and Liberating Ourselves Locally (LOL), which recently merged with Peacock Rebellion, features a maker space and uses the arts as a healing force for the queer and trans community. All four organizations regularly collaborate and share space, with the backyard garden serving as a focal point and gathering space for all.

Upstairs, eight residential units have been maintained at rents far below the skyrocketing costs of the rest of Oakland, where the combined pressures of limited housing, a growing tech sector, and increasing wealth and income disparities have caused an affordable housing crisis and the unprecedented displacement of thousands of residents.

When the tenants on 23rd Avenue received notice last January that their landlord was planning to sell their building, they thought that they, too, would soon join the ranks of Oakland’s displaced. Instead, a year later, they now own the keys to their building—thanks to an innovative collaboration involving the Oakland Community Land Trust, their former landlord, and hundreds of community members.

23rd Ave. Oakland
Devi Peacock in the 23rd Ave. garden (photo: Luba Yusim)

Moreover, the deed to the property has been placed in trust forever, preserving it for future generations of low-income Oaklanders.

“Taking this land off the market forever is big,” said Devi Peacock, founder of Peacock Rebellion. Community and arts organizations like those in this building “are so often a stage of gentrification,” Peacock added. “That this land will always stay in community is an important investment in generations of community control.”

23rd Ave. is among a wave of tenants and organizations from New York to California exploring the use of land and real estate trusts to fight back against gentrification and displacement in their neighborhoods. While unique in its circumstances, the 23rd Ave. project is among the most successful and far-reaching examples to date, and may offer insights for other communities looking to secure a bit of ownership and stability in fast-changing markets that favor deep-pocketed developers over longtime residents.

Resident-driven Real Estate

When Cycles of Change, SOL, and LOL brought their dream to “Liberate 23rd Avenue” to the Oakland Community Land Trust, the timing was fortuitous.
“We’ve spent the last year or two working on developing a strategy to prevent displacement in small, multi-unit properties just like this one, especially in contexts where the projects are resident driven,” said Steve King, executive director of the land trust, which stewards land, housing, and other community-serving real estate for the benefit of low-income Oakland residents. “That this group had self-organized and was approaching us was squarely in line with the work we’d been trying to get off the ground.”

Not only were the residents and tenants involved, their landlord was too – something that’s quite rare, King said, but that the land trust and others are working to encourage. In this case, the landlord, Ming Cheung, was connected to and supportive of the community that had grown in her building, so she offered the tenants first right of refusal to purchase the building: If they could find the money to buy the property—which could fetch $1.5 million or more on the open market—it was theirs.

The land trust is working with East Bay Community Law Center and other groups on legislation in several Bay Area cities that would give tenants rights to counter offers made on their buildings, much like what Ming offered her tenants. Similar legislation already exists in Baltimore and Washington, D.C. (where debate over their version of the law was recently reignited).

The land trust’s approach to displacement and affordable housing is unique: while many organizations are working to develop affordable rental or public housing, Oakland Community Land Trust focuses on resident-driven rather than developer-driven projects—projects that center the knowledge and input of residents in ownership, management, decision-making, and more. That some of the commercial tenants on 23rd Avenue were already organized as collaboratives and were interested in collective ownership made for a natural fit.

23rd Ave. Oakland
A 23rd Ave. tenant stakeholder meeting

The land trust has also uniquely homed in on small, multi-unit properties with between five and 25 units. Prices on these units have not accelerated as much as other properties in the region, said Zach Murray, Oakland Community Land Trust program manager, but are where the bulk of displacement in Oakland is happening. In addition, many of these properties are not well maintained, creating health crises on top of housing issues, he said.

The issue of maintenance and safety was dramatically highlighted by the 2016 Ghost Ship fire that killed 36 people in the Oakland warehouse-turned-artist collective just 10 blocks east of 23rd Avenue, leading to evictions of artists and residents in similar buildings across the city. The incident has reverberated across the work of the land trust and other groups concerned with the eviction and displacement of vulnerable and marginalized Oaklanders. The 23rd Avenue building was up to code and properly zoned. But the land trust is working to purchase other buildings that are not, and has seen increased interest in its work in the last year.

Multi-layered Funding

While the circumstances at 23rd Avenue set up the tenants and land trust for an ideal union, pulling the finance stack together was not as straight forward. Throughout the process, available dollars and interest rates changed as affordable housing dollars dried up in programs both at local lenders and the City of Oakland.

A crowdfunding campaign last spring raised $90,000 from more than 600 donors—more than enough for a down payment to secure the building.

The rest of the $1.5 million purchase was financed by the land trust and a loan from Northern California Community Loan Fund, a community development financial institution (CDFI) that lends to community-based nonprofits and enterprises. The city kicked in funds, too, from a pot of money designated for site acquisition and preservation of existing housing. (Ironically, this was not part of the Bond Measure KK dollars Oakland residents had just approved to fund affordable housing projects and other anti-displacement measures, though the possibility of those resources did help jumpstart the conversation).

The Bikery (photo: Luba Yusim)

Since the sale closed in November, the land trust holds the title to the building and the land underneath it. However, the ultimate goal is “to work with the residents to establish a different ownership structure over time,” King said.

For now, rents have been maintained at their low rates and the commercial and residential tenants have begun to hold monthly stakeholder meetings. Now, the task is on them—with ongoing technical assistance from the land trust—to consider what their ownership aspirations are and how to best leverage this property to create opportunity not only for themselves, but for future generations.

“My goal is for residents and tenants to have equity in the end,” said Eri Oura, one of the tenant organizers who led the way to purchasing the building. “That’s where intergenerational wealth can be cultivated for folks that have never experienced that.”

For Peacock, the opportunity feels more immediate: “There is financial value, yes,” Peacock said, “but the real value is survival. I don’t live in this building and I stress a lot about housing. But this isn’t about just places to live, this is also about preserving the cultural services that make life worth living—the places where people make culture.”

Meanwhile, at the Oakland Community Land Trust, King and his team are building on what they learned on 23rd Avenue to preserve another seven-unit residential building nearby. They’re also working to create their own acquisition fund, hoping to pool dollars directly from community foundations and other funders rather than putting an institutional lender in the middle. “We need innovative and responsive investing mechanisms,” King said. “They need to be patient, long term, and cheap.”

Despite their success on 23rd Avenue, King is hesitant to lift the project up as a model. “In reality, it shouldn’t be up to a group of residents to take on as much as everyone did here. It’s a failure of the system that they had to be that involved.”

Photo at top: Luba Yusim

Sarah Trent is a freelance writer based in Oakland. 

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Comments

  1. Thanks for getting our story out there! We also got some acquisition funds from the Community Arts Stabilization Trust’s Keeping Space – Oakland program <3

  2. Congrats! I was privileged to get a tour of the building and garden as part of the Grounded Solutions Network annual conference. Great work!

  3. Great article that demonstrates the need for alternative finance to drive innovative solutions to the affordable housing crisis in the United States that allows people to create wealth, local businesses, and jobs.

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