What is a Community Land Trust
What is a Community Land Trust?
Community land trusts (CLTs) are nonprofit organizations that provide long-term affordability and shared equity homeownership opportunities for low- and moderate-income communities and families. CLTs can be used for several types of development including rural, commercial, and retail. In addition, they work to conserve land or urban green spaces. But the primary goal for CLTs is to create homeownership opportunities that are permanently affordable for people that come from lower and moderate-income families. Most often, affordability is created through a grand or subsidy used to help reduce the initial sales price. Today, there are around 277 community land trusts across the United States.
Who Controls a Land Trust?
Typically a community land trust is a nonprofit or quasi-governmental organization governed by a board, staff, and community members which may include CLT homeowners and non-profit/NGO organizations. This diverse stakeholder group ensures that the interest of the community is protected and that organization promotes the well-being of the community and meets neighborhood needs.
How do Community Land Trusts Work?
- An individual or family buys a house that sits on land owned by the community land trust.
- The purchase price will be more affordable because the homeowner is only buying the house, not the land. In many cases, a subsidy is also provided to help offset the sales price.
- Homeowners will lease the land from the community land trust in a long-term (most frequently 99-years), renewable lease.
- In lieu of a land lease, CLTs may also opt to create affordability through deed and covenant restrictions or inclusionary zoning that incentivizes builders and developers to build affordable homes.
- The homeowners agree to sell the home at a restricted price to keep it affordable, although they may be able to realize appreciation from improvements they made while living in the house.
In many cases, CLTs provide additional support to potential homeowners through housing counseling, homebuyer education, and referrals to qualified lenders with Land Trust experience.
Community land trusts play a critical role in building community wealth for numerous reasons:
- CLTs provide low-and moderate-income people with opportunities to build equity through homeownership and prevents vulnerable residents from being displaced due to gentrification and speculation.
- CLT housing protects owners from downturns because people are not overextended. Foreclosure rates for land trusts are 90% less than conventional home mortgages.
- In many cases, one-third of a land trust’s board is made up of community residents, allowing for direct participation in the decision-making process and community control of local assets.
- CLTs reduce the wealth gap and create opportunities for greater racial inclusion through homeownership.
For a better understanding of what a CLT is and how they operate, please refer to the link below:
“Community Land Trusts.” Grounded Solutions, Grounded Solutions, groundedsolutions.org/strengthening-neighborhoods/community-land-trusts.
“Community Land Trusts.” Local Housing Solutions, Local Housing Solutions, 13 Aug. 2021, localhousingsolutions.org/housing-policy-library/community-land-trusts/.