The City Council approved three measures tonight designed to encourage home ownership by people with limited incomes.

It designated the Citizens Lighthouse Community Land Trust as a Community Housing Development Organization. That makes the group eligible to apply for federal and city housing funds and improves its prospects of receiving grants from charitable foundations.

It also approved a $15,000 city grant to the Housing Opportunity Development Corporation for its counseling program designed to prepare moderate-income residents to qualify for home ownership.

And it reserved $180,000 in federal housing funds allocated to the city for potential use by the Evanston Housing Coalition in a housing rehabilitation project.

Alderman Ann Rainey, 8th Ward, said the land trust proposal represented a balkanization of affordable housing efforts. The city, she noted, already has three other such groups.

She said the trust presented a budget that calls for spending $142,000 in its first year on administrative costs, and that it anticipates only creating one new affordable housing unit per year.

“To me this sounds like a big waste of money,” Ald. Rainey said.

Alderman Steve Bernstein, 4th Ward, said “I don’t disagree that it would be nice if the organizations came together under an umbrella to collaborate and reduce costs.”

“But the reality is that they’re not asking for any money from us tonight, they’re only asking to be eligible for the program,” he said.

A community land trust’s operating model differs from that of other affordable housing groups.

It buys property and builds a house on it. It then sells the house to a low-income purchaser, but retains ownership of the land, giving the home owner a long-term lease. The trust also retains an option to repurchase the home at a price designed to ensure perpetual affordability.

Alderman Elizabeth Tisdahl, 7th Ward, said she shared Ald. Rainey’s concern about the high operating costs, but said that she was encouraged that the trust’s board is open to sharing expenses with other non-profits to reduce those costs.

The council reduced the housing counseling grant from $25,000 to $15,000 after City Manager Julia Carroll said she believed the cost to serve a projected 50 potential homebuyers per year was excessive.

The reservation of funds for the Evanston Housing Coalition came after the city discovered that, because of an error in a federal database, it was about to lose a portion of the money available to it if it didn’t quickly commit the funds to a project.

Bill Smith is the editor and publisher of Evanston Now.

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