History & Future

Unforeseen challenges with rehabilitation, including rising costs and our inability to secure the funding necessary, meant we could not finish renovations in a timely manner. 

In 2019, City Roots Community Land Trust won a grant from the New York State Attorney General for $850,000. We originally planned to use this grant to purchase and rehabilitate vacant homes entirely through the Rochester Land Bank, but when the COVID-19 Pandemic began and the Land Bank temporarily stopped acquiring new properties, we had to find another way to invest this money or we would have lost it. Through a partnership with the City Wide Tenant Union of Rochester, we learned of a set of properties owned by one landlord that were in serious need of repair. These properties were occupied by tenants who were demanding that something be done to fix their homes. That is why, in April of 2021, we decided to purchase eight of these highly distressed buildings and do our very best to transform them into quality, affordable housing for the people who lived there.

When we acquired these properties we were aware of roughly 250 open code violations across them. These violations ranged from significant healthy and safety issues to minor problems with the exteriors of the buildings. In total we have invested more than $775,000 to purchase the buildings, cure violations and renovate residential and commercial units to a high standard. As we worked to assess and renovate these buildings, we discovered many previously unidentified issues including another ~100 code violations that significantly raised the cost of rehabilitation from our initial estimates. Thus far, we have cured more than 180 of the initial 250 violations as well as countless violations never officially cited. There are five occupied units left with health and safety violations inside the units. Three of those units are not safely accessible by staff at this time. One unit needs an inspection that has been hard to coordinate with a tenant, but the actual violation was corrected nearly a year ago. The final affected unit will require work that cannot be completed until the unit is vacated.

The significant number of code violations discovered since we’ve taken these properties over has dramatically increased the cost to complete renovations on these properties compared to our initial projections. We have now reached a point where we have no more funding available to rehabilitate these properties, and where seeking additional funding for that rehabilitation no longer appears to be an option.

Due to deep, systemic poverty and an inaccessible, overburdened system of social support, City Roots was not able to develop the capacity to properly serve our residents. 

Like so many tenants in Rochester, the people who live in the buildings we acquired continue to deal with chronic, generational poverty and the various problems that arise from it. Providing stable, affordable, quality housing to this population of people requires far more than just housing itself. It requires levels of financial, social, physical, and emotional health support that our organization has not had the capacity to provide. 

Prior to acquiring these properties, our small staff had no professional experience providing this kind of supportive housing. In the months and years since acquiring them, we have struggled to grow our internal capacity to meet these needs and instead have tried to rely on partners. Without the infrastructure in place to offer supportive housing services, we did our best to seek out partnerships with service providers, and in some cases were successful, but more often than not we were unable to secure the level of supportive services our tenants needed. In our assessment, this was the result of a serious lack of accessible services in the community for the people we housed. 

It is financially impossible for an organization of our size to provide deeply affordable rent without significant, ongoing subsidy.

City Roots has never charged market rate rent. Every single unit of rental housing we have ever owned was rented at a deeply affordable, below-market rate and the average monthly rent cost for CLT housing is just $670. However, in the last two and a half years we have lost nearly $200,000 in unpaid highly-affordable rent and collected only $82,000 directly from tenants and through regular support services like DHS. In addition to this, we received $23,600 in rent support through special programs that were available during the COVID-19 pandemic, but those programs only covered a portion of unpaid rent costs and are no longer available. 

We have explored programs that could help address the inability of our tenants to directly pay rent, such as Project Based Vouchers, which attaches ongoing rent subsidies to housing units. Unfortunately, our properties do not currently meet the requirements of these and similar programs and it takes many months or years to pursue these kinds of programs. 

After speaking with several long time experts in the CLT field, in particular the folks at Common Land Solutions, it became clear to us that, given its size, our real estate portfolio could not simultaneously be financially sustainable and affordable to the population we intend to serve. Specifically, it became clear that if we were going to make our current rental portfolio financially sustainable, we would need to charge market rate rent at the bare minimum, which is in no way affordable. 

Additionally, a more mature or larger organization with 50 or more affordable rental units may have been in a better situation to weather the loss of unpaid rent and sustain the costs of repairs and maintenance of these buildings long enough to access sustaining long term funds like project based vouchers. However, with just 17 operable units, we simply do not have the reserves to do so. In short, we no longer have the time or resources to grow our rental portfolio to a sustainable scale, and even if we did, reaching that point would require significantly compromising our values and mission.

The growing pains of a grass non-profit organization combined with a sudden and dramatic expansion of our real estate portfolio ended up being more than we could handle.

In addition to the challenges of this property acquisition, City Roots was also experiencing the normal growing pains that many young, grassroots organizations face. At the same time that we took on this enormous property management project, we were also welcoming the very first staff members to what had previously been an all-volunteer run nonprofit. 

In the years since, City Roots had to transform its internal operations, financial management tools, and board and staff roles while also advancing the work on the ground. Frequently, staff leadership and the board prioritized the immediate needs of residents or urgent day-to-day needs over the critical work of building systems that would make our work more sustainable and impactful in the long term. Sometimes this looked like our executive director unclogging a toilet instead of vetting and hiring a much needed new accountant, sometimes it looked like the board failing to prioritize important conversations or provide clear directives to staff. Over time, these challenges led to delays in understanding the scope of the problems we were dealing with and compromised our ability to act quickly to remedy them.

City Roots is actively working to improve our organizational capacity and restructure our real estate portfolio so that we can shrink our operations in order to sustainably grow in the future.

City Roots board & staff first began to realize the extent of the problems we faced in late Summer of 2022, and quickly began to take action. Some examples include:

• We underwent our first ever audit and hired a new accounting firm to completely overhaul our financial management systems. 

• We brought on several consultants with expertise in real estate finance, board development, human resources, and continuous improvement in order to fill gaps in our capacity. 

• We temporarily transitioned our staff structure to a co-director model to more equitably and efficiently distribute work and decision making.

• We sought out partners with expertise in social work and case management to support our tenants. 

However, by August of 2022 it became clear to us that the legal eviction process is one of the only tools available to landlords to address the kinds of challenges we face with our tenants, and often the only way for tenants to access critically needed resources. Eviction is not in line with our mission, and our staff and board have spent more than a year working on alternatives to help transition some residents to housing that better meets their needs. Unfortunately, in October of 2022, we unfortunately had to begin the eviction process for several tenants.

As these efforts progressed into January of 2023, we began to understand that City Roots would also need to make significant changes to our real estate portfolio to remain financially solvent. With the support and guidance of key consultants from Excelsior Performance Group, LLC and CommonLand Solutions, the board convened a special committee to dig deep into our situation, identify and assess possible solutions, and make a set of recommendations to the board and membership for restructuring our rental portfolio. This plan makes specific recommendations for each of our rental properties that include: 

• Selling them to first-time homebuyers, 

• Transferring them to mission aligned partner organizations in order to preserve them as affordable rental housing, and 

• As a last resort, selling the property out of the CLT. 

The board adopted this plan on February 27, 2023 and on March 20th, 2023 our general membership also approved the plan. Staff is now in the process of enacting this plan. 

The future of City Roots CLT focuses our efforts on stewardship rather than the development and management of rental housing.

We believe that Rochester needs permanently affordable, community owned housing and community space. Our experience as a landlord during the pandemic has only increased our commitment to making sure every person has safe, affordable housing, as their basic human right. We believe that City Roots CLT still has a critical role to play in creating these kinds of resources, but we also understand that how we do that needs to change. Specifically, when it comes to permanently affordable rental housing, we believe that City Roots need to focus on stewardship rather than development. In practice, this means identifying partner organizations to both develop and manage rental housing on land owned by City Roots CLT. These types of partnerships are very common in communities around the country and allow CLTs to do what they do best: create permanent affordability and community control through land ownership and community stewardship. We have learned first hand how difficult and expensive it is to rehabilitate historically under-maintained housing, and to support high need, low-income tenants and families. We still believe it is a part of our mission to help create more of the deeply affordable, supportive housing this population of people needs. However, after the last two years, we now believe that our role in that work should be to steward projects in partnership with experienced organizations who have the technical and financial capacities such projects require. 

This has and will continue to be difficult for everyone involved in City Roots CLT. It will take us time to finish working through these challenges and to fully restructure our organization. If we are going to succeed, it will take the support and investment of our entire community. We know we still have many questions to answer, and in the coming months we are deeply committed to answering those questions in an open, honest, and transparent way. The entire board and staff of City Roots CLT would like to thank you for your ongoing support of our work, your patience with us as we work through this process, and your continued belief in our mission. Please do not hesitate to reach out with any questions or concerns you may have.

In spite of the many challenges we face, we have a lot of hope for the future of City Roots Community Land Trust. As a steward of land and community, City Roots can play an integral role in building a Rochester that is safe and affordable to all. We hope you will join us in building that future.