What is a community land trust?
Community land trusts (CLTs) are community-based nonprofit organizations—governed by a representative board of CLT and community residents, funders and public representatives—that acquire land within a specific geographic area and use it to provide permanently affordable homeownership opportunities and lasting community assets for families and communities. By creating homes that remain permanently affordable, CLTs provide successful homeownership opportunities for generations of lower income families and maintain mixed-income neighborhoods by developing and preserving a stable inventory of affordable housing outside the market.
How do CLTs work?
In the CLT model, the nonprofit builds or acquires homes, and sells the homes to income-qualified individuals. The CLT retains ownership of the land that the house sits on, leasing the land to the homeowner for a designated period of time, typically 99 years. Separating the house from the land has two important benefits: it ensures that the land remains affordable by keeping it in the community’s possession; and it helps makes homeownership more affordable for low-income individuals, allowing them to more easily buy homes and build wealth through equity and shared market appreciation.
What is permanently affordable housing?
Affordable housing built with public dollars usually comes with an expiration date, meaning that the affordability benefit the public investment provided can be lost after fifteen to thirty years, and residents may be displaced. One of the greatest benefits of community land trusts is the preservation of affordable homeownership for generations. Through a one-time public investment to lower the purchase price and the agreement the homebuyer makes to sell to sell at an affordable price, CLTs create a portfolio of homes that can be purchased by future low-income families, even when the prices of surrounding homes rise substantially higher.
What are the benefits of CLT homeownership?
CLTs benefit families and communities in the following ways:
- CLTs help prevent displacement: By retaining ownership of the land underlying the homes, CLTs provide homes that remain affordable regardless of changes in the surrounding neighborhood. These homes offer a buffer from rising land prices during hot real estate markets, protecting residents during down markets, and preserving the mixed-income demographics of neighborhoods at risk of gentrifying.
- CLTs help increase family financial security by providing housing stability and wealth-building opportunities: Families that spend excessive amounts of their incomes on housing have insufficient resources for other essential needs, such as food and health care. By stabilizing housing costs, CLTs help residents build wealth and save for the future.
- CLTs support successful homeownership and economic mobility: CLTs help low-income families bridge the gap between rental housing and market homeownership. In addition, they increase the economic mobility of families by allowing them to share in the financial benefits of owning a home with a lower risk of foreclosure and provide a springboard for entering the conventional housing market.
- CLTs create stable and strong neighborhoods: CLTs contribute to fewer foreclosures, better upkeep of properties and stable occupancy. CLTs increase civic engagement by organizing residents to develop and implement a collective vision for community land.
- CLTs offer a flexible model: CLTs abandon the one-size-fits-all approach to affordable homeownership development by mixing land uses and types of housing across various communities and projects. This helps to maintain affordable housing in targeted areas, such as near public transit sites, while integrating mixed-use structures that could include commercial space and supportive services for low-income families.