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 housing 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 on the land and sells the homes to income-qualified individuals. The CLT retains ownership of the land that the house sits on, leasing the structure to the homeowner for a designated period of time, typically 99 years. Separating the structure 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 earn equity on the structure.
What is permanently affordable housing?
Affordable housing built with public dollars usually comes with an expiration date, meaning that the housing is only required to remain affordable for a set number of years before the building’s owner is free to charge market-rate rent or convert the building to condominiums. When that happens, low-cost buildings are lost and low-income renters are displaced, and it’s almost impossible for the city to replace the affordable housing stock. One of the greatest benefits of CLTs is the long-term preservation of affordable housing for generations. By locking initial public subsidies into properties and imposing limits on resale prices, 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 benefits families and communities in the following ways:
- Buffers against gentrification and displacement: By subsidizing land through the private market, CLTs provide housing that remains affordable regardless of changes in the surround neighborhood, offering 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.
- Helps 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.
- Supports successful homeownership and economic mobility: CLTs help low-income families bridge the gap between rental housing and 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.
- Creates stable and strong neighborhoods: CLTs contribute to fewer foreclosures, better upkeep of properties and stable occupancy, and they can help reconnect vacant properties to the market. CLTs increase civic engagement by organizing residents to develop and implement a collective vision for community land.
- Offers flexible, scattered site model: CLTs abandon the one-size-fits-all approach to affordable housing development by mixing the use of land and the types of housing across various communities and projects, helping 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.