Purpose Interview: Trust Neighborhoods

Stabilize renters. Invest in communities. Trust neighborhoods.

Trust Neighborhoods is an inspiring non-profit organization helping neighborhood-based groups set up a Mixed-Income Neighborhood Trust (MINT) to attract investment while protecting against the displacement of long-term renters. Applying the concept of steward-ownership to the field of community development and wealth-building, the MINT model functions as a neighborhood’s ownership entity. Creating trustworthiness for both communities and investors, this innovative model turns community investment into a source of opportunity and inclusion, not displacement. Co-founder Kavya Shankar has been working closely with the team of Purpose US. She talks with Camille Canon on how the model works and shares thoughts and insights on the work and mission of Trust Neighborhoods.

Kavya Shankar, COO

Trust Neighborhoods

Camille: What challenges are you trying to solve?

Kavya: There are neighborhoods across the country that have been historically disinvested from and discriminated against. Those neighborhoods have had individuals or neighborhood groups who have long fought to bring more resources into those communities. 

More recently, we're starting to see a growing demand for urban, walkable neighborhoods. And so those same neighborhoods are now starting to get the investment that they long sought after. On one hand, the investment can do a lot of good: it can heal vacancy, fix blighted property, reduce crime. Overall, it can make the neighborhood richer in opportunity. 

But on the flip side, typically that investment is coupled with rising rents. Rents often rise so fast that long-term residents can no longer afford to remain in the neighborhood. And so you end up in a situation where a neighborhood has now become higher in opportunity, but the long-term residents have been displaced from the neighborhood and cannot benefit from that opportunity. So we are trying to say: As a neighborhood ‒ with these investments ‒ gentrifies and continues to grow, how do we make sure that this growth is in service of long-term residents, not just future residents and investors?

Camille: How are you approaching this challenge?

Kavya: We created a new community development tool called the Mixed-Income Neighborhood Trust (MINT). We partner with existing neighborhood groups and help them set up a MINT, which practically functions as a neighborhood’s own ownership entity. The MINT takes vacant and/or poorly maintained properties and converts them into quality mixed-income rental housing and retail. Vacant single-family homes and renter-occupied apartments are kept in the same portfolio and a small portion of those are floated at market-rate. As the neighborhood appreciates in value, the rents for the market rate properties go up and the additional money helps cross-subsidize the other units to keep them affordable for the long run and preempt gentrification-driven displacement while also offering a return to investors.

Camille: How do you make sure that control remains with and within the community?

Kavya: The community component is key to the MINT model. Its inclusive governance structure ensures community control. This is manifested in the authorship of the Purpose Trust Agreement that is written in collaboration with a neighborhood task force, but also in the control over the Perpetual Purpose Trust, which holds 100% of the MINT’s rental portfolio. Beyond community control, there is an economic and wealth building component to the MINT. If the neighborhood appreciates significantly in value above the threshold expected for investors, the remaining upside goes back to the neighborhood in the form of a reserve. The neighborhood can use this reserve at their own discretion. 

Another thing to note in terms of who is involved in the neighborhood task force that is specifically helping to support this project. Neighborhood groups usually have a lot of projects going on ‒ setting up the MINT is only one of them. So we work with the neighborhood groups on setting up this task force, which is really specifically focused on the MINT. 

We try to make sure that it is representative of the racial and cultural identity of the neighborhood, and that it includes renters, who are sometimes less engaged in existing neighborhood-level governance. We want a variety of tenures of people that have been in the neighborhood. And that group, their primary focus, is offering feedback that will inform the trust agreement ‒ the document that governs the Perpetual Purpose Trust. 

Camille: Could you tell me a little bit about the projects you are currently working with?

Kavya: Right now we're working with two pilot projects, which have both received funding: one in Kansas City and another in Tulsa. In both projects, we partner with already existing neighborhood groups and try to ensure that the neighborhood group has the legitimacy of the community.  That can mean a lot of different things, but it is important for us that there is a track record of measures and things that they have been working on that is in line with the priorities in the communities. 

What is nice about our projects is that there is an opportunity to build on and expand the capacity and range of the community groups. So, for example, in Kansas City, the neighborhood group is more home-ownership focused. They've historically been doing a lot of efforts to help more people buy homes. Our effort, however, is one around preserving renters and stabilizing renters in the community. And so what has been nice is that the process of working together and to implement and set up this Mixed-Income Neighborhood Trust has been a process of bringing more renters into the conversation and increasing the set of people who are involved. 

Camille: Imagine the neighborhoods you are working with at the moment in 10 years’ time ‒ what will have changed? 

Kavya: I think a lot will have changed. One is that they will be neighborhoods that people will feel a lot of pride around living in, where there is a strong sense of belonging and where the neighborhoods deliver high opportunities such as good economic, social, and health outcomes. I imagine the neighborhoods to have residents who have lived there for a really long time and are able to continue to afford living there. That renters are able to live alongside homeowners. And that this will form a cohesion to the community and a sense of ownership over being able to make the neighborhood what people want and need. 

Key is this vision of trustworthiness. Even before these changes, we want to create a feeling of trust that a renter will be a part of whatever the future of their neighborhood is if they want to be. Today that trust often, and rightly, isn’t there. Knowing you can be part of a neighborhood means not only taking part in governance, but also just literally being able to afford to live there. That seems like such a simple thing, but it hasn’t been true for too many people in too many neighborhoods.

Camille: What role do you think the ownership and governance structure of the MINT model will have played for this future scenario?

Kavya: I am sure that some of it will be through the ownership entity of the MINT. But hopefully, the MINT is just step one of the ability for the neighborhood to take on other tools and entities that really give people ownership over being able to shape their own neighborhoods for the better. I hope that those who are in the driver’s seat of the neighborhood are really representative of the demographics and background of the community. I would love to see the Operating Board of the MINT to be fully, one hundred percent, representative of the neighborhood. And that's all because this tool has given people who might not normally have a seat at the table or an ability to engage in real estate and neighborhood development, a real opportunity to shape what their community looks like for the long-term.