She sold her home for nearly half its $1 million value. The ‘pay it forward’ deal is a new tactic in the Bay Area’s housing crisis

So in January, the 81-year-old finalized a deal to sell her Point Reyes Station home at a steep discount to the Community Land Trust of West Marin, better known as CLAM, which buys property off the high-priced private market and converts it into affordable homes. In Loeb’s case, it’s a deal that will allow her to live the rest of her life in the house with no monthly payment, then entrust CLAM to “pay it forward” to others in need of lower-cost housing.

“This is my community,” said Loeb, who has lived in West Marin for 46 years. “I want to do what I can.”

For many California families, passing down a home that’s mostly or completely paid off is the biggest opportunity in a generation to build wealth. Loeb said her children supported the plan to forgo some of those financial gains, and she saw it as a chance to settle her mind in her golden years while leaving something behind for others struggling to crack into an increasingly out-of-reach housing market.

The $550,000 sale of her 1-acre property — home to three one-bedroom bungalows ringed by mountains and cypress trees, which Zillow estimates could be worth more than $1 million — is the first success for a new Age-in-Place initiative at CLAM. It’s also an example of the increasingly sophisticated ways that Bay Area land trusts and community groups are trying to ease the housing crisis, from equity-oriented Oakland homeownership programs to wrestling entire apartment buildings back from Silicon Valley investors.

In Point Reyes, a Census-designated place that encompasses the downtown Point Reyes Station and has a population of 895, the average home is worth around $1.6 million, up 22% from just one year ago, according to a Zillow estimate. But similar to other Bay Area tourist hot spots, the average local household earns a disproportionately low $74,000 a year, census data shows, fueling high demand for scarce affordable housing.

“It’s impossible to keep up,” said Ruth Lopez, program manager for CLAM, which sees demand far beyond the 18 income-restricted rental units it currently manages. “We have 200 people on the wait list.”

As far as Loeb knows, the house that she lives in was originally built as a chicken coop about 150 years ago. Another owner stuccoed over the walls and made it a utilitarian homestead with low ceilings and overhead plumbing. Loeb and her then-husband bought the surrounding 2-acre property with a friend in the 1980s, then kept 1 acre and their house when the friend later sold and moved to New Mexico.

Today, the airy main house that Loeb’s contractor ex-husband renovated over 18 years has blond wood floors, ample skylights and walls full of art made by Loeb and her son. The lofted bedroom feels like a tree house with its vaulted wood ceiling and a balcony perched over the irises, apple trees and tomato plants growing below.

“We wanted the outside to be inside,” Loeb said. “That was the whole point of coming to California.”

House rich, cash poor

Even on the rural edge of Marin County, today’s California isn’t the 1960s dream that Loeb was chasing when she moved here from New York at age 20. In Point Reyes, where her son used to get chased home from school by ranchers’ kids for looking like “a hippie,” Loeb now avoids the throngs of tourists who pack the small downtown on weekends. She worries about former school colleagues and other workers being forced into long commutes.

For Lopez, whose three kids attended the Papermill Creek Children’s Corner where Loeb taught, rising housing costs also make it harder for housing nonprofits like CLAM to keep a foothold. That’s why, a few years ago, she and her colleagues started looking at places like Colorado for creative ideas to buy new properties with prices rising.

“The average age here is like 65,” Lopez said. “We thought there might be some seniors who are kind of house rich and cash poor, and that might be our best strategy to acquire properties and help seniors stay in their homes.”

It was spring 2021 when Loeb started seriously considering selling her home to CLAM. Under a deal known as a “retained life estate,” she plans to live in the home for the rest of her life with no mortgage, keep earning income from two small rentals on the property, then task CLAM with converting her home to affordable housing after her death.

The two sides agreed that, in exchange for the lower sale price, the land trust would also cover tax bills and major repairs. This spring, the whole property was tented and fumigated to get rid of pests, and a new roof was installed.

Loeb said her daughter, who lives nearby, was supportive of the decision, and her son, an artist living in Memphis, told her to “just do it.” The land trust also required family to sign off.

“We don’t want anyone coming back saying, ‘This is elder abuse,’” Lopez said.

‘My legacy’

The fine print of retained life estate deals like the one Loeb opted for vary, but they aren’t new. Other types of charities and community institutions — food banks, universities, churches — have long offered donors the option of passing on valuable properties this way. After a homeowner transfers the deed to a nonprofit for an agreed-upon price, effectively securing “future ownership,” Lopez said, the owner gets to keep living there while gaining the tax benefits of a charitable gift.

Homeowners seriously worried about losing their homes may look to such arrangements instead of risky loans or reverse mortgages, and the process is designed to avoid postmortem red tape like probate court. In exchange, the land trust or nonprofit gains a property that would otherwise be too expensive to buy.

Other Bay Area affordable housing groups, including the Sonoma Land Trust, also offer to help facilitate retained life estates. In nearby cities, housing nonprofits confronting their own forms of gentrification are experimenting with different approaches, several focused on extending homeownership and estate planning to non-white families who stand to disproportionately benefit because of pervasive racial wealth gaps.

The Oakland Community Land Trust acquires single-family homes — including one famously occupied by activist group Moms 4 Housing — to be sold at discounted rates or leased to own. In the working-class Peninsula enclave of North Fair Oaks, the nun who leads the Catholic nonprofit St. Francis Center has amassed a multimillion-dollar affordable housing portfolio by leveraging private donations to buy buildings back from real estate speculators.

Across the country, philanthropy consultants such as Chase Magnuson have seen rising demand to tap into would-be donor dollars locked in real estate, sometimes through wonky-sounding trusts or through traditional wills. The trick, he said, is making sure all sides are prepared to deal with potentially costly hurdles like maintenance, insurance and other financial or family turmoil.

“They need to have professional financial help,” said Magnuson, president of Houston’s Real Estate for Charities, “so that they don’t do something wonderful and then run out of money.”

In Point Reyes, CLAM agreed to pay Loeb $300,000 up front for the house, then two subsequent payments totaling $250,000. The discounted purchase was financed by a mix of private donations, county affordable housing dollars and funding from the Marin Community Foundation, county records show.

Lopez said CLAM, which has an annual budget of around $850,000 and owns several million dollars’ worth of property, is still evaluating long-term options for Loeb’s home. Whenever the day comes that she no longer lives there, the land trust may sell the bungalows and lease the land at an affordable rate, Lopez said, or rent them all out below market value.

That all sounds just fine to Loeb.

“I don’t see how this town can survive without affordable housing,” she said. “And I mean, that’s my legacy, right?”