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Land trust concept catching on in N.D.

GRAND FORKS — In August, Crystal Bailly-Dale paid $115,000 for a newly constructed Grand Forks house with enough space for her and her three children.

That’s not a misprint. The lower-than-market cost of the two-story, 1,900-square-foot home is a product of a recently formed nonprofit organization named the Grand Forks Community Land Trust. The GFCLT provides a $30,000 subsidy because the organization — not the homeowner — owns the lot.

“Crystal lives on the lot, but we still own it,” said Emily Wright, a Grand Forks Housing Authority official who is also founder and executive director of the GFCLT, the first such organization in North Dakota, although it’s available in 45 states.

“She’s buying the house, but not the land.”

The lot last was occupied by the Church of God, which was destroyed by the 1997 flood. If Bailly-Dale sells the property, she receives 40 percent of the value appreciation while the GFCLT receives 60 percent.

 “We keep a portion of the appreciation so we can pass on the subsidy to keep the home affordable for the next family,” Wright said.

Although the land trust formed by Wright is the first in the state, Minot, Bismarck and Fargo are at various stages of organizing one. Representatives of the other three cities were in Grand Forks last week for a symposium run by Wright.

The Grand Forks trust has built and sold two homes, has two more in the construction phase and nine more lots available for building. The city has donated the 13 lots.

The new mechanism was needed, Wright said, because of the skyrocketing home prices in Grand Forks.

“Five years ago, you could have found a Grand Forks house for $115,000,” she said. “Today, any home in Grand Forks costing less than $200,000 will attract a purchase agreement in a day or two.”

In addition to moving her family into the home Aug. 1, Bailly-Dale has graduated from the University of North Dakota and landed a job at Macy’s this year.

“I’m off assistance and my rent money is no longer going toward nothing,” she said.

The two homes under construction are expected to be completed and available for sale in February or March.

“We have a waiting list,” Wright said. “We hope to have four to six homes built next year.”

Minot seeks land trust

The land trust option was a hot topic at the symposium for North Dakota officials dealing with an affordable housing shortage. Nowhere is the housing shortage more obvious than in Minot.

“Oil and water do not mix,” said Connie Philipenko, a board member of the developing Minot Community Land Trust.

Philipenko was referring to the oil boom that has attracted thousands of workers to the western half of the state and to the 2011 flooding in Minot that devastated the city’s housing stock. Both developments have contributed to its housing shortage.

According to U.S. Census Bureau numbers, Minot’s housing sales averaged $152,000 over 2010-12, a 23 percent increase over the previous three years. In that same time span, Fargo and Bismarck’s home costs have climbed 9 percent and Grand Forks is up 4 percent.

Minot rents have risen even higher because about half of the rentals were lost to the flood.

“Before the flood, a two-bedroom might rent for $750 to $800 a month,” Philipenko said. “Now, it’s $1,200 to $1,400.”

She said high-end homes are selling quickly, so contractors concentrate on that market because of the greater profit margin. But new affordable homes are scarcer.

“Our goal is have 30 more homes in three years, both on empty lots and homes we can fix,” Philipenko said.