Jun. 19—EAST GRAND FORKS — North Star Neighbors Community Land Trust broke ground on its first expansion into East Grand Forks Thursday afternoon.
“This is going to be a welcome joy for us to have in the city,” East Grand Forks Mayor Mark Olstad said.
“(We’re) excited to see how the first one goes (and) see how fast (they sell); I’m sure it’s going to go just like that,” he added, snapping his fingers.
Started as a priority through the Northwest Minnesota Foundation, North Star Neighbors already has a presence in Thief River Falls and Red Lake Falls, and has also just broken ground on homes in Roseau. North Star Neighbors has a total of four lots in East Grand Forks and will start on two this summer.
“(We’ll) use that interest to guide the third and fourth home on what makes the most sense to build,” said North Star Neighbors Executive Director Cory Boushee. “As we get interest in and see how quick these move, we’ll pull the trigger on building homes three and four.”
North Star Neighbors was incorporated as a community land trust in 2023. The land trust works on a shared equity model where both the trust and the homeowner have a stake in the property. Land trusts don’t always build new homes but can buy homes in partnership with a prospective home buyer if the land trust deems it fits into their portfolio.
For the homes, North Star Neighbors retains ownership of the land and the homeowner owns the homes and then has a long-term ground lease with North Star Neighbors. The model helps lower home prices for buyers who may not otherwise be able to afford a home.
In the initial sale of an East Grand Forks property, funds
from the Minnesota Housing Finance Agency and North Star Neighbors
help lower the purchase price for the homeowner. When the home is sold, the homeowner receives the funds of 25% of the appreciation of the home, with the rest staying with the property, helping maintain affordability, buyer after buyer. The land trust isn’t limited to first-time buyers, potentially providing options for older people who are downsizing.
The properties held by the community land trust are limited by income. The top income is $89,500, with successful applicants often between $70,000 and $90,000 right now, according to North Star Neighbors.
The homes being built will be approximately 1,700 square feet, two-story homes with three bedrooms. The four lots are all located on Pinehurst Court Northwest. Some of the lots the city had developed and others were previously owned by the Forx Builders Association for use for the Northland Community and Technical College home building project, which was discontinued. The four vacant lots were sold to North Star Neighbors for $120,000.
Boushee said that he’s had some interest in the homes, and Olstad added that inventory for affordable homes like these is low.
“I think (North Star Neighbors) is going to have success at doing this,” Olstad said. “I think it’s going to be great and we can keep going.”