-- Article from the BH Pioneer dated March 18, 2009
-- Article from the BH Pioneer dated April 1, 2009 -- Article from the Rapid City Journal dated May 10, 2008 -- Article from the BH Pioneer dated October 22, 2008City to buy land from developers for pipes, transit center and affordable housing
-- Article from the BH Pioneer dated March 18, 2009
From jokers to aces, Dakota Land Trust makes homeownership more affordable for Deadwood card dealer
By Wendy Pitlick
Black Hills Pioneer
Published: Wednesday, April 1, 2009 11:04 AM CDT
Home ownership is coming up aces for Joel Edgar, the first client with the Dakota Land Trust.
Edgar, who deals cards at the Midnight Star in Deadwood, has been closely overseeing the construction of his new house on Washington Street in Lead, which is just over the hill from Edgar's current apartment. As the first Dakota Land Trust house, Wolf Creek Enterprises of Spearfish started construction last January and the firm is making steady progress.
Modeled after the Jackson Hole Land Trust in Jackson, Wyo., the Dakota Land Trust is a non-profit corporation which purchases lots to lease to homeowners under a contract purchase. Those who take advantage of the land trust sign a 99-year lease with the Dakota Land Trust for the ground their house sits on, effectively taking the cost of land out of the equation for the purchase price of the house. Under the arrangement, which was crafted to ensure houses in the land trust stay affordable forever, the homeowner pays $25 a month for the land lease and when he or she sells the house the homeowner takes 25 percent equity from the sale, plus any equity incurred from improvements made to the house.
It's a perfect arrangement for Edgar, who said he spent a long time looking for an existing house that he could afford, only to find that everything in his price range needed a lot of improvements. Using the Dakota Land Trust, Edgar was able to afford a brand new house that will have a year warranty for any structural needs that arise.
“I was looking to buy a house last summer. I just couldn't find anything in my price range that was worth buying. There were a lot of nice places, but everything would need fixing up and I've only got so much money to spend and if I've got all of that going toward a house payment I can't fix it up. So, I came in (to NeighborWorks Dakota Home Resources) asking about a governor's house to start with. They said we've got this new deal with the Dakota Land Trust.”
It was a perfect fit, Edgar said, as the more research he did about the arrangement, the more appealing it was.
“I appraised the house and it actually appraised for more than what I'm paying for it,” Edgar said.
Tara Brodkorb, director of the Dakota Land Trust, a partner with Neighborworks Dakota Home Resources, a non-profit organization that works to put local families and individuals into their own houses, said Edgar is a perfect example of what the Dakota Land Trust was designed to do. The program was designed specifically to make sure that people who work in the Black Hills can afford to live here.
“We are very, very excited,” Brodkorb said of the first Dakota Land Trust home buyer. “We're amazed at the progress and the number of people that have requested it. Now we are able to give it to them and show them that it's not just an idea, but we are able to show them and prove to them that it is an option and it is a very doable option.”
Currently the Dakota Land Trust is in its infancy stages, working to get lots that can be leased to families. The organization has already struck a deal with the city of Spearfish. Under the arrangement, the city will buy 10 lots for the Dakota Land Trust using a tax increment finance district, which pays for public improvements with the tax increment that increases after the land is developed. As the Dakota Land Trust leases those lots out to homeowners it will pay the city of Spearfish $5,000 per lot.
Those are the only dedicated lots the Dakota Land Trust holds now, Brodkorb said, though there are several other prospects in Deadwood, Spearfish, Rapid City, Box Elder and Custer. As the Dakota Land Trust finds potential buyers, the board of directors will then go after those lots to purchase them and lease them out.
Included in the Dakota Land Trust contract is also a life-long partnership that Edgar and Brodkorb both said they are very excited about. The partnership offers continuing homeownership classes that will help Edgar learn more about maintaining his home and budgeting during hard times. Additionally, the land trust will act as a go-between for Edgar and his neighbors to help resolve any issues that may come up.
The idea, Brodkorb said, is that once a Dakota Land Trust house is built nobody will be able to tell that it is any different than the homes that surround it. “It's going to be a normal house,” Brodkorb said. “The only thing is that we have now put one more homeowner into a home.”
Copyright © 2009 - The Black Hills Pioneer
Spearfish to pay $600K for affordable housing, Prairie Hills Transit lots
BY WENDY PITLICK
Black Hills Pioneer
Published: Wednesday, March 18, 2009 11:17 AM CDT
The city of Spearfish will spend $600,000 to purchase lots intended to create affordable housing in Spearfish and to give Prairie Hills Transit a new home, officials decided Monday.
Closing for the land purchase is expected to take place July 1, or when all of the infrastructure is built at the McGuigan Ranch development, the site of the lots.
The money will come from the city's second penny sales tax, Spearfish City Administrator Greg Sund said. Of the money, $260,000 will be used to purchase 10 lots, which the city will then donate to the Dakota Land Trust, a brand new venture aimed at providing affordable housing in Spearfish. The remaining $340,000 will be used to purchase about 4.8 acres for a new Prairie Hills Transit site. Under the agreement, the city will receive $5,000 from each house the Dakota Land Trust sells. The majority of the cost of the Dakota Land Trust lots and the Prairie Hills Transit property funds will be recouped from the tax increment finance district, which is being used to finance infrastructure improvements at the McGuigan Ranch development, where the lots are located.
Spearfish Developer Joe Jorgensen owns the McGuigan Ranch property.
A tax increment finance district in the development will help pay the Dakota Land Trust land, Prairie Hills Transit land, a water reservoir, a storm water detention pond, necessary and convenient costs, not to exceed $100,000, and professional services, not to exceed $200,000.
In addition to donating the lots, city officials discussed the necessity of drafting a contract that dictates what the lots are to be used for - for affordable housing units and Prairie Hills Transit facilities, such as mandating the land only be used for non-profit and/or affordable housing purposes. The details of conditions will be worked out before the land is transferred to the two organizations.
Since the reimbursement of the $600,000 is under a tax increment finance district, which the city approved last year, council members inquired about the potential payback by tax dollars. A tax increment finance district freezes collectable tax dollars on developed property so that the tax assessments collected and used by the county and the schools stay the same as if the property was never developed, for a maximum period of 15 years after the infrastructure is built. The extra tax dollars that result from the developed property assessment increases are used to retire the cost of purchases/improvements described in the TIF plan document. Therefore, the faster properties are built in the development, the larger the tax increments and the faster the debts will be paid off.
During the regular city council meeting Monday, City Planner Jayna Watson presented several different scenarios for the TIF payback. However, before her presentation she cautioned city officials about the nature of tax increment finance district paybacks.
“This analysis needs to be reviewed with the knowledge that the city does not control the rate of development,” she said. “It is important to enter into the purchase of this property with the knowledge that the city has no way to force a revenue stream to flow back and repay the source funds. It is entirely dependent upon economic conditions in the future.”
Watson's analysis assumed that at least 10 houses, valued at about $125,000 each with the Dakota Land Trust, would be constructed, and about 17 homes, with a conservative projected value of $145,000 would be built within the next five to 10 years. Using those projections, Watson said it would be reasonable to expect annual TIF revenue of about $60,000 per year starting in 2018, with a 10-year payback period ending in 2028, for a total of $600,000 paid back to the city.
In her analysis, Watson compared McGuigan Ranch to other subdivisions in town with similar socio-economic markets. The Reserve at Higgins Gulch, she said, has $5.9 million in new assessed value added from construction, acquired since 2007. Those figures would generate about $97,114 per year if that area were in a TIF District.
While discussing the purchase, Joy McCracken, executive director of NeighborWorks in Deadwood - the parent organization for the Dakota Land Trust, said she already has homebuyers ready for construction to start on the city's donated lots. In fact, McCracken reported that despite devastating national news about the housing market plunge, her office has not seen a decline in housing requests.
“We do have five or six families that are very interested (in the McGuigan Ranch lots),” McCracken said. “Our office isn't seeing a decline in housing activities. We did some research and we looked at February 2008 versus February 2009 and actually there have been more housing closings in 2009 than 2008. There are the same number of homes on the market. Today there are still no homes on the market (in Spearfish) under $125,000.”
Armed with that information, McCracken said she is very confident that the Dakota Land Trust will be able to quickly sell the lots donated by the city.
Sue Ames of Prairie Hills Transit was also optimistic about the city's land donation. Prairie Hills Transit currently has about $1.7 million of unallocated funds to use for their new bus barn facility, and the organization also received funds from the federal stimulus package. “We should be shovel-ready in 90 days,” she said of the agency's ability to construct their building after the land donation is completed.
Responding to councilman Eric Davis' question about a timetable for having infrastructure available at McGuigan Ranch to service these properties, Jorgensen said contractors are full speed ahead. Contractors hope to start moving dirt for the road that will service the properties this Wednesday, and infrastructure should be completed by the closing date of July 1, if not before then.
Additionally, Jorgensen said his booth at the Home Show, which showcased the development, yielded a very positive response.
“I have probably five potential single lot buyers and two duplex buyers, and some people were talking to us about multi-family,” Jorgensen said. “The interest is there. Interest rates are low and I think this is the market to be in today.”
Copyright © 2009 - The Black Hills Pioneer
A Place to Call Home … FINALLY
Dakota Land Trust working with families interested in purchasing a home
By Wendy Pitlick
Black Hills Pioneer
Published: Wednesday, Oct. 22, 2008
DEADWOOD-Dakota Land Trust is gearing up to put area families into homes they can afford throughout the Northern Hills.
“It’s really exciting because the people we are working with really want to live in Spearfish,” Joy McCracken, the executive director of the Deadwood-based trust agency geared toward creating affordable housing.
She is referring to two lots that have gained the interest of two families in Spearfish within the McGuigan Ranch subdivision north of town. Partnering with the developers and the city of Spearfish, funding was secured to purchase 10 lots that have been dedicated to the land trust. Now homeownership is becoming a reality for people that otherwise couldn’t have afforded because housing costs have increased so much in the last decade.
Recognizing increases in land costs and housing prices, the Dakota Land Trust was established to preserve land and various types of housing to fit the needs of those working and living in communities in western South Dakota.
In addition to the 10 lots currently available in Spearfish, McCracken sais there are a few projects underway in Deadwood and Lead.
“We’re building a partnership with Habitat for Humanity to do a project in Deadwood,” she said. “We have a potential family in mind.”
Located on Forest Street, the project would give one family an opportunity to live in a quality home and in turn save money because the cost of the land would essentially be taken out of the funding equation.
“Land trust is an apportunity to purchase a home by sharing equity. By sharing their equity that provides affordable housing for the current homeowner and the next homeowner,” she said. “In turn owning a home because more affordable to families that would not otherwise have the opportunity.”
In Lead, McCracken said that she is working with a potential buyer who is interested in a project.
“We’re working through the final approvals for that transaction,” she said. “It’s going to be a good thing for the residents in that area.”
With the Black Hills becoming more of a tourist destination, the lack of affordable housing has created a burden for the average middle class families in the area. Dakota Land Trust, with its innovative mission, provides residents the benefit of stable monthly payments and the opportunity to build equity through homeownership.
According to the Northern Black Hills Realtors Association and statistics the organization has compiled regarding the increase in housing costs in the area, options are very limited for the working class.
“A home that sold for $116,900 in 2002 is now selling for $165,500 and at the same rate of increase this home will sell for $234,000 in 2012,” said Shawn Rost, a member of the Dakota Land Trust board of directors. “That’s double the price in 10 years.”
If a family is interested in utilizing Dakota Land Trust’s services, McCracken advises them to contact the Deadwood office. Located at 817 Main St., in Deadwood the office number is 578-1401.
“We can counsel with them to make sure they understand the concept,” she said.
Then, once the family has gained approval from a local lender, they can select a lot.
Homebuyers with the community land trust program purchase only the house and enter into a long term agreement with Dakota Land Trust. The ground lease defines the roles and responsibilities of both the community land trust and the homeowner.
The lease is set at 99 years. These homes cost less than market rate homes and are only sold to families with limited incomes. If and when the family would decide to sell a Dakota Land Trust home, they sell only the house to another family with a limited income for the price that is determined by the resale formula in the ground lease. By taking the cost of land out of the real estate transaction, the home stays affordable for future generations.
Copyright © 2008 - The Black Hills Pioneer
Grant to provide affordable housing
By Scott Aust, Journal staff
Rapid City Journal
Published: May 10, 20098
The Dakota Land Trust, which incorporated last August, announced Friday it has received a $300,000 grant from the South Dakota Housing Development Authority, which will be used to buy land as part of a new affordable housing effort in western South Dakota communities.
"This grant represents the start of something big for all of those Black Hills residents who hold dear the seemingly elusive dream of home ownership," trust director Joy McCracken said. "In an age of skyrocketing land prices and a meltdown in the mortgage industry, the Dakota Land Trust is now well on its way toward helping our regional work force secure decent, safe and affordable housing on a long-term basis."
The trust was created in 2007 through Deadwood-based Neighborhood Housing Services of the Black Hills, with the support of community leaders throughout the area.
Under its plan, the trust will acquire and hold land. Through partnerships, homes put on the land will be sold to qualified homebuyers. Exclusive use of the land is conveyed to individual homeowners via a 99-year lease that is assignable to their heirs and is renewable at the end of the lease term.
The less-than-market-rate homes will be sold to families with limited incomes. When a family sells the home, they sell the house to another family with limited income, and Dakota Land Trust continues to own and lease the land.
Malcom Chapman, president of the trust board, said the land trust helps make sure the land stays affordable. No land has yet been acquired, but the trust is working with developers and is also embarked on an education campaign to tell people what the trust is and what it's trying to do.
"We're still somewhat in the infancy stages of this," Chapman said.
The ground lease allows the homeowner secure, long-term rights to use the land and full responsibility for the property. It is renewable and can be transferred to a family's heirs.
The DLT hopes to be able to help more than 100 families own homes during the next three years -- something they otherwise wouldn't be able to afford at market price.
In addition to the state grant, the land trust has also received a $300,000 commitment from Black Hills Vision, a regional economic development organization, to help support the trust.
"The Dakota Land Trust is designed to assist potential homeowners in securing a residence, providing assistance after their purchase, encouraging family-friendly neighborhoods, and promoting a mix of land uses and types of housing in scattered-site projects," McCracken said.
"This innovative program is based on the success of so many other regions of the U.S. that face the challenges of growth while preserving the opportunity to own an affordable home."
Contact Scott Aust at 394-8415 or scott.aust@rapidcityjournal.com
McGuigan Ranch approved for tax district funds
By Heather Murschel
Black Hills Pioneer
Published: August 22, 2008
SPEARFISH-The city of Spearfish approved the project plan for a third tax incremental finance district recently. Its boundaries, approved by the Spearfish City Council in August, stretch alongside the McGuigan Ranch property north of Spearfish and a parcel that is still partially owned by Pope and Talbot Inc.
The total amount of this district’s increment is set at $2,350,000 and soon affordable housing and a brand new transit center will be built and the landscape will change dramatically.
“I do support this,” said Mayor Jerry Krambeck. “I think it is a positive thing and I think it is worth trying. I have faith in this community … and the city can afford it.”
A Tax Increment Finance District (TIF Districts) is an economic development tool utilized by municipalities to use the assessed value of a particular land parcel each year to eventually pay off the debt incurred from making public improvements. The city of Spearfish is currently utilizing this financing theory at Exit 17 with the Elkhorn Ridge Golf Course and for infrastructure improvements at the Spearfish Industrial Park. In this case, the city is hoping to begin addressing affordable housing by purchasing land to do so and to address the growing pains for Prairie Hills Transit. In additions, infrastructure improvements are planned to promote future growth in that area of Spearfish.
“The project plan is based on build out of residential units for the next 12 to15 years,” Jayna Watson said Monday during a regular Spearfish City Council meeting. The purpose of the plan is to detail how tax increment funds generated by development from within the district will be used. The increment value has been estimated utilizing a 5 percent interest rate at a certified base valuation of property projected at 4972,310. According to the Lawrence County Equalization Office, today the property is worth $972,310 and in 2028, when the tax district retires, it will be worth an estimated $19,500,000. That amount will create a taxable increment of $18,527,690. However, Watson noted a major caveat with the numbers as the city cannot control the housing market or growth patterns and the return of these funds are entirely dependent upon a consistent growth pattern.
The boundaries were formed under the determination of blight, which is defined by state statute as an area conducive to disease or crime; developed areas impairing growth and open areas impairing growth.
In turn, Watson said in the spring of 2008, two non-profit agencies approached the city with a request to consider a city/agency partnership to fund land purchases for their respective projects to be located at a new development known as McGuigan Ranch, owned by Joe Jorgenson and Jim Benning. Today, DLT in Deadwood is the sponsoring agent and the city has agreed to purchase 10 lots, each estimated at 6,000 square feet. Those lots, purchased for $26,000 each, will be put into a trust that will force the property value to stay stagnant, therefore making the land affordable indefinitely.
The city of Spearfish is also purchasing 4.8 acres of commercial property to hand over to Prairie Hills Transit for an additional bus garage and staging facility.
The affordable housing aspect of this TIF is set at $260,000. The transit aspect of the TIF is set at $340,000. The project plan also includes $1.5 million for a water reservoir and another $250,000 for a larger storm water storage basin.
Eric Davis, who made the dissenting vote, said that he appreciates all of the thought that went into this particular district, but that he still doesn’t believe that the projects within the plan warrant a TIF District. “There are many benefits but I believe it failed to separate tax incremental financing from the projects,” he said.
The one million gallon water storage reservoir is planned to provide a backup supply of water to meet both domestic and fire protection needs at McGuigan Ranch and The Reserve on Higgins Creek, a development near Jorgenson and Benning’s property that is currently underway. In addition to the upgrade, Watson said that a storm water storage basin will be built on the west side of McGuigan Road, within the drainage area. It will be increased from .6 million cubic feet of storage to 1.6 million cubic feet and act as a detention area to reduce downstream flows.
Dakota Land Trust offering lots in Spearfish
BY WENDY PITLICK
Published: Tuesday, August 25, 2009
SPEARFISH-Dakota Land Trust, an organization which purchases and leases lots in an effort to allow families the opportunity to build affordable housing, has moved into Spearfish.
Joy McCracken, executive director of Neighborworks Dakota Home Resources, said the organization just recently signed its first agreement with a Spearfish resident who will build her house on a Dakota Land Trust lot in McGuigan Ranch. The agreement represents the first Dakota Land Trust house that will be constructed in Spearfish.
Modeled after the Jackson Hole Land Trust in Jackson, Wyo., the Dakota Land Trust is a non-profit corporation which purchases lots to lease to homeowners under a contract purchase. Those who take advantage of the land trust sign a 99-year lease with the Dakota Land Trust for the ground their house sits on, effectively taking the cost of land out of the equation for the purchase price of the house. Under the arrangement, which was crafted to ensure houses in the land trust stay affordable forever, the homeowner pays $25 a month for the land lease and when he or she sells the house the homeowner takes 25 percent equity from the sale, plus any equity incurred from improvements made to the house.
Earlier this year, the city of Spearfish worked with the Dakota Land Trust and developers of the new McGuigan Ranch subdivision to purchase lots for the land trust. The city will then sell those lots to the Dakota Land Trust as they are needed, at a price of $5,000 each. The lots will then be managed by the Dakota Land Trust under an arrangement that allows the homeowner to maintain ownership of the house, but lease the property underneath the house.
“I think it says a lot on behalf of the city of Spearfish,” McCracken said of the Dakota Land Trust lots in the Queen City. “The fact that they are willing to step up to the table to make affordable housing available to the people who work in their community,” McCracken said. “They definitely saw the need and that the people who work in that community were having a difficult time purchasing a home in that community. I really am impressed with the city of Spearfish being proactive to address the issue.”
With the average land cost between $35,000 to $45,000, McCracken explained that taking the cost of the land out of the equation for homeowners significantly reduces their cost. Before the land trust existed, she said families that wished to construct a $110,000 house would pay about $150,000 when adding the land into the equation. Now, when a family constructs a home on Dakota Land Trust property, the cost of that land is eliminated. That means a significant monthly savings, she said. Under a 5 percent interest finance agreement, which McCracken pointed out is a higher rate than most S.D. Housing Authority loans, the land cost means the difference between paying $805 per month for a $150,000 house and land, or a $590 per month payment for just the house.
McCracken said now that house construction has started in McGuigan Ranch, she expects people to become more interested in the Dakota Land Trust option in Spearfish.
“We knew that as soon as building activity started that would generate a lot of interest,” McCracken said. “Until we were ready to start building we didn’t put a lot of effort into marketing, so now we can start marketing land trust and getting families in those homes.”
McCracken said she anticipates that it will take two years or less tohave families take advantage of the 10 Dakota Land Trust lots in McGuigan Ranch.
Copyright © 2009 - The Black Hills Pioneer
-- Article from the BH Pioneer dated August 25, 2009 -- Article from the BH Pioneer dated October 28,2010 -- Article from the BH Pioneer dated October 28,2010
