An Introduction to the Community Land Trust

Homeownership Program Provides Workers With Affordable Housing

Jan 14, 2009

Designed to provide long-term housing affordability, the Community Land Trust helps homeowners create better neighborhoods.

Think the economic crisis has destroyed all possibilities for a better home life? Community Land Trusts offer a potential homeowner a more empowering future through their affordable homeownership programs.

What is a Community Land Trust?

Introduced in the 1960s by the founders of the Institute for Community Economics (ICE), a Community Land Trust (CLT) is a nonprofit organization that acquires and holds land in permanent land trusts. CLTs then sell the residential and commercial buildings on the property – minus land costs – to low-income workers, making housing more affordable.

A CLT homeowner is usually given a 99-year renewable lease on the land which grants the homeowner, his or her family, and their descendants the right to use the land for as long as they want to live in the house. While the homeowner do not own the land, he or she still enjoys all the benefits of homeownership including tax deductions, equity home building, and stable housing costs.

Realizing that many low-income neighborhoods degrade due to absentee homeowners who allow their homes to deteriorate while charging high rent to community members, CLT land leases require that a homeowner uses the CLT home as his or her primary residence, ensuring that CLT residents take care of their property.

Should a homeowner decide to move out, he or she must sell the home back to the CLT or to another low-income household at a below market price determined by their lease’s “resale formula.” In this way, CLT houses remain permanently affordable while still enabling the former homeowner to earn equity on their home.

CLTs are governed democratically by a board of directors elected and run by CLT residents and community members who work to ensure the needs of residents and the greater community are met. This helps foster a greater sense of community and lets residents create a system of self-governance.

Some CLTs offer homeowner training and assistance – including home repair loan funds and other special arrangements for a CLT homeowner with unexpected financial problems. When it comes time for the homeowner to sell their CLT home, most CLTs also help in the selling process, enabling the homeowner to keep more of the resale price.

While primarily used for affordable housing programs, CLT land can be used to create other community assets, including businesses, parks, plazas, and gardens. Some CLTs also offer housing cooperatives, condominiums, and affordable rentals.

According to Daniel Fireside’s article “Community Land Trust Keeps Prices Affordable – For Now and Forever” published in the Fall 2008 issue of Yes! Magazine, none of the CLT homes, condominiums, or housing cooperatives offered by the Vermont-based Champlain Housing Trust (CHT) have experienced a foreclosure in 2008. Likewise, none of the more than 1,600 residents in CHT apartments fear eviction thanks to their affordable rent.

Such stories have brought more attention to CLTs and the affordable housing they offer to a growing population of people threatened with foreclosure. As the mortgage crisis worsens, CLT advocates hope more organizations will see CLTs as viable affordable housing programs.

How to Find a Community Land Trust Program

People interested in learning more about CLTs should visit the Institute for Community Economics website, which offers detailed information on CLT affordable housing programs as well as list of current CLT programs in the United States, Canada, and the United Kingdom.

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The copyright of the article An Introduction to the Community Land Trust in Mortgages/Loans is owned by Michael Jung. Permission to republish An Introduction to the Community Land Trust in print or online must be granted by the author in writing.