Community Land Trusts

Amid widening racial disparities in homeownership, exacerbated by the increasing influence of private equity firms in the housing sector and the failure of existing policies to rectify both historical and current housing discrimination, there is an urgent need for strategies that promote equitable land ownership and wealth-building opportunities for low-income communities of color. A community land trust (CLT) is a non-profit organization that acquires and manages land and buildings to guarantee housing with lasting affordability and community control. The first community land trust, New Communities was created in 1969 to support black farmers. This pioneering initiative was the result of a collaborative effort among farmers and civil rights activists, including members of the Student Nonviolent Coordinating Committee (SNCC). 

CLTs differ from traditional housing non-profits in that they separate land ownership from property ownership and are governed directly by community members. In the classic CLT model, the CLT acquires land, through purchase or donation, to develop affordable housing, community centers, gardens, or other improvements to the land. The CLT sells homes at below-market rates to low- and moderate-income families, while the CLT leases the land to the owner on a long-term basis. In exchange for purchasing homes at below-market rates, CLT homeowners agree to resale price restrictions that limit the amount of appreciation they will receive. A portion of that appreciation is reinvested in the home in order to maintain the affordability of the home for the next lower-income buyer. Many CLTs also provide affordable rental housing. Today, there are an estimated 225 community land trusts in the United States that provide between 10,000 and 15,000 homeownership units and close to 20,000 rental units. 

CLTs can promote equitable development in different neighborhood contexts. In “hot” markets, CLTs can provide long-term affordability to address gentrification and prevent displacement. In weaker markets, CLTs can be a tool for neighborhood reinvestment and stabilization. Studies have found that CLTs provide stable homeownership and asset-building opportunities for lower-income households that would otherwise be locked out of market-rate homeownership. While the capped resale appreciation formula is different from traditional homeownership, the CLT model works because it shares both the risk and reward of home equity between the homeowner and the land trust.  For example, CLT homeowners are ten times less likely to default on their homes than their private-market counterparts. 

Check out Grounded Solutions Network, Democracy Collaborative, and Lincoln Land Institute for additional resources and more information about community land trusts.

• Elected and appointed city officials can provide resources and funding to support CLT formation and expansion, donate or offer discounted sales of public land, and link developer land donation mandates and inclusionary housing programs to CLT programs.
   
• Lending institutions, community development financial institutions (CDFIs), banks, and other property owners can offer supportive financing and priority in the acquisition of foreclosed or abandoned properties.
   
• Community-based organizations and other advocates can organize to create CLTS in their communities and educate public officials and lenders on the structure and benefits of CLTs.
   
• Affordable housing developers can partner with CLTs to share their development and property rehabilitation expertise.

Successful CLTs usually leverage public, private, and philanthropic financing for property acquisition, effectively recruit residents by educating community members on CLT ownership, establish democratic governance structures, and develop additional community assets. Local governments can provide critical support throughout the process. Here are some key policy considerations:

• Scope and mission: Some CLTs serve entire metropolitan regions while others focus on a single neighborhood. For new CLTs, these determinations will depend on the interest of the founding members and community needs, the nature of local housing needs and market, and the existence of other community-based organizations.
   
• Determine housing needs: CLTs can offer both affordable homeownership and rental housing options. Their flexibility also allows for both the purchase of land for new construction as well the acquisition and rehabilitation of existing properties to preserve and expand affordability. CLT leadership must decide the best strategy for promoting housing affordability and community stability based on local housing needs and resource availability.
   
• Acquire land and housing: Land acquisition is critical for the development and preservation of housing. Cities can support CLTs by either offering donated land, discounting vacant lots or abandoned properties, or otherwise providing acquisition financing support. If they have an inclusionary zoning program, cities can also partner with CLTs to own and/or manage inclusionary units or in-lieu fees. Public, private, and philanthropic capital can also support CLT's efforts to acquire land and homes.
   
• Financing - At the organizational level, CLTs need access to funding to acquire, develop, rehabilitate, and maintain affordable housing. Cities can support CLTs by offering them grants and low-interest loans as well as by creating new sources of funding directed towards permanent affordability. At the individual level, lending institutions also need education before they are able to offer mortgages to CLT homeowners. Cities can work with lenders to expand their coverage.
   
• Affordable pricing and resale formula: CLTs make homes available by setting an initial price that is below the market rate and affordable to their target market - often low-income residents who need deeply affordable housing. To maintain affordability for future homebuyers, CLTs place limitations on the amount of price appreciation and return on investment that a homeowner can capture at the time of sale (also known as shared equity). A CLT's resale formula is often included in the ground lease, along with the income range requirements for new buyers. These conditions should be clearly communicated to any prospective buyer.
   
• Resident and community control: A classic CLT is a membership organization, open to all residents in the focus area, and has a tripartite board structure consisting of 1/3 CLT residents, 1/3 other members, and 1/3 public representatives and people with specific technical capacities.
   
• Communications and outreach: Given the unconventional ownership structure and the resale price restrictions, CLT homeownership can often be confusing or even concerning to prospective residents and lenders alike. Cities can help educate stakeholders about the merits and unique structure of CLTs.
   
• Additional uses: Though CLTs are often focused on developing housing, they can also include agricultural, non-profit, or commercial spaces.

Efforts to foster community land trusts should ensure that organizations have significant public support and access to financial resources. Widespread outreach and education are needed across sectors to build effective support for the permanent affordability and communal wealth-building potential that CLTs offer.

• In Seattle, the Africatown Community Land Trust (ACLT) has worked to establish mixed-use spaces that support Black-owned businesses and celebrate the legacy of Black families and businesses in Seattle. The most recent project for ACLT is the Liberty Bank Building which has more than 100 affordable rental units, in conjunction with the ground floor retail space reserved for black-owned businesses that include Earl’s Barbershop and Communion on Union restaurant. 
   
• In 2019, the Rondo Community Land Trust in St. Paul completed construction on Minnesota's first commercial land trust. The Selby Milton Victoria Project includes two mixed-use commercial/residential buildings which provide 9,300 sq. ft of long-term affordable commercial space for small, local and minority-owned businesses, along with 34 units of affordable senior housing. The trust aims to prevent displacement of Black-owned businesses in the area due to rising property prices and recently gave all seven commercial spaces to Black business owners. The businesses opened in May 2019. 
   
• The Community Arts Stabilization Trust in San Francisco was established in 2013 to create permanent and affordable space for artists, creative entrepreneurs, and arts and cultural organizations. They work toward this mission by acquiring property to sustain the arts, building the capacity of cultural organizations around leasing and owning property, and by leveraging mission aligned funding.
   
• The Houston Community Land Trust (HCLT) is making homeownership possible for low-income residents in historically Black and Latinx neighborhoods. In 2016, the City of Houston developed the New Home Development Program in partnership with the Houston Land Bank and a then-nascent HCLT to provide permanently affordable housing options in a rapidly developing and gentrifying city. The City allocated $16 million towards this program and $5 million toward the Houston Land Bank to acquire lots where the affordable homes will be built. Another $10 million was allocated for contractors to build the housing, and another million was used for the HCLT's start-up costs. HCLT works to find qualified, low-income home buyers to purchase subsidized homes and enter the land trust, at which point Houston Land Bank transfers properties to the land trust. While more traditional affordable housing subsidies often carry an expiration date, what compelled city officials to support and fund the CLT is the permanent affordability and sustainability the model provides. The Houston Community Land Trust was established in 2018 and by 2020, had assisted 21 households in achieving homeownership - making it the fastest growing single-family home CLT in the U.S.
   
• In 1999, community members and the City of Portland founded Proud Ground (formerly Portland Community Land Trust) to provide access to homeownership for low-income residents as housing prices skyrocketed in the Portland Metro region. Since its founding, this community land trust has served over 400 first-time homebuyers. The average Proud Ground homeowner is a family of three earning 61 percent of the Area Median Income (AMI). Sixty percent are female-headed households; 59 percent are families with children; and 42 percent are households of color. In Proud Ground’s CLT model, homeowners receive a fair return on their initial investment and agree to maintain that affordability for the next homebuyer. While still building wealth, Proud Ground homeowners help future generations of homebuyers have access to affordable homes, like they did. 
   
• Neighbors in the West Charlotte community of Charlotte, North Carolina came together in 2017 to create the West Side Community Land Trust as a way to preserve and develop their neighborhoods for the benefit of low-income residents in the face of rapid reinvestment and subsequent displacement of long-time residents. The organization is governed by a board with majority control given to residents of the West Charlotte community and is creating both homeownership and rental housing opportunities. In 2022, the land trust broke ground on the Nathanael Carr Senior Community, a 4.5-acre site that includes 120 units of permanently affordable senior housing. In 2023, Mecklenburg County Commissioners dedicated $6 million from the county’s American Rescue Plan Act (ARPA) funds to the land trust so that they could purchase 32 homes from a single landlord and keep them permanently affordable.