CLTs have been established in different kinds of communities, with different kinds of projects meeting different community needs, but they share some important features, including a distinctive approach to the ownership of real estate, and a distinctive approach to community-based governance.
A Distinctive Approach to Ownership…
- Acquiring Land for the Community. Sometimes CLTs acquire vacant land and arrange for the development of housing or other structures on it. At other times, CLTs acquire land and buildings together. In both cases, CLTs treat land and buildings differently. The land is held permanently by the land trust so that it will always benefit the community. Buildings can be owned by those who use them.
- Homeownership on Community Land. Buildings on CLT land may serve different needs, but, when possible, CLTs help people to own their own homes on this land. When a CLT sells homes, it leases the underlying land to the homeowners through a long-term (usually 99-year) renewable lease, which gives the residents and their descendants the right to use the land for as long as they wish to live there.
- Still Affordable for the Next Homeowners. When CLT homeowners decide to move out of their homes, they can sell them. However, the land lease requires that the home be sold either back to the CLT or to another lower income household, and for an affordable price.
A Distinctive Approach to Governance…
- Membership organization. CLTs are usually organized as “membership corporations,” with boards of directors elected by the members. Usually there are two groups of voting members. One group is made up of all the people who live in CLT homes (or use CLT land in other ways). The other group is made up of other people in the community who are interested in what the CLT is doing – including neighbors of CLT residents, and people who may want to have CLT homes in the future.
- Board structure. Usually the CLT board includes three kinds of directors – those representing resident members, those representing members who are not CLT residents, and those representing the broader community interest. In this way, control of the organization is balanced to protect both the residents and the community as a whole.
Why a CLT?
In Growing Communities…
In many communities today population growth and economic investment are driving up real estate prices so that fewer and fewer working people can afford to live in the communities where they work. Fewer still can afford to buy homes in those communities. Limited public funds are available to subsidize housing costs for lower income households, but the gap between the amount of subsidy needed and the amount of subsidy available continues to widen as housing costs soar.
To address this problem, community land trusts are being developed in a growing number of communities – in expanding metropolitan areas from Cleveland, Ohio to Portland, Oregon; in university communities from State College, Pennsylvania, to Boulder, Colorado; in expensive resort communities from the Florida Keys to the San Juan Islands of Washington State and in many other communities as well. These CLTs control housing costs by permanently limiting land costs and “locking in” subsidies so that they benefit one homeowner after another and do not need to be repeated each time a home is sold.
And in Disinvested Neighborhoods…
The problems of low-income neighborhoods typically revolve around disinvestment and absentee ownership. As homeownership declines older buildings are likely to be bought by absentee investors who allow the buildings to deteriorate while charging high rents. The rent paid to these absentee owners leaves the community. It is not saved by the residents, not spent in local stores, not used to improve the community. If residents do organize themselves to improve their neighborhood, it will be the absentee owners who will reap the benefits of increased property values.
Through a CLT, however, residents themselves can capture the value they create so that it benefits their own community rather than absentee investors. For instance, when residents of Boston’s Dudley Street neighborhood organized to rebuild their community, they decided to establish a CLT so they would not ever lose control of what they had worked to build. Their slogan was “Take a Stand, Own the Land.”
Important Features of a CLT
Acquiring Land for the Community
Sometimes CLTs buy undeveloped land and arrange to have new homes built on it; sometimes they buy land and buildings together. In either case, the CLT treats land and buildings differently. CLT land is held permanently – never sold – so that it can always be used in the community’s best interest. Buildings on CLT land, however, may be owned by the residents.
Access for Low-Income People
The CLT provides access to land and housing for people who are otherwise priced out of the housing market. Some CLT homes are rented, but, when possible, the CLT helps people to purchase homes on affordable terms. The land beneath the homes is then leased to the homeowners through a long-term (usually 99-year) renewable lease. Residents and their descendants can use the land for as long as they wish to live there.
Prices Stay Affordable
When CLT homeowners decide to move, they can sell their homes. The land lease agreement gives the CLT the right to buy each home back for an amount determined limited by the CLT’s resale formula. Each CLT designs its own resale formula – to give homeowners a fair return for their investment, while keeping the price affordable for other lower income people.
The land lease requires that owners live in their homes as their primary residences. When homes are resold, the lease ensures that the new owners will also be residents – not absentee owners.
A CLT can work with various ownership structures for multi-family buildings. The CLT itself may own and manage a building as rental housing, another non-profit may own it, or the residents may own it as a cooperative or as condominiums. In each case, the CLT will ensure long-term affordability.
Helping New Homeowners
CLTs can provide a variety of training opportunities and other services to first-time homeowners, and can provide crucial support if homeowners face unexpected home repairs or financial problems. In these cases the CLT can often help residents to find a practical solution, and may help to make necessary financial arrangements.
A Flexible Approach
CLTs have been established to serve inner-city neighborhoods, small cities, clusters of towns, and rural areas. A CLT working in a small city neighborhood may be the only local housing group, though it may collaborate with citywide and regional organizations. Other CLTs, serving larger geographical areas, may work closely with a variety of local organizations. CLTs may develop housing themselves or may hold land beneath housing produced by other non-profit (and sometimes for-profit) developers.
A CLT may build new homes, rehabilitate older homes, or acquire existing housing that needs little or no renovation. Some CLTs have bought mobile home parks to provide long-term security for mobile home owners.
In addition to providing affordable housing, CLTs may make land available for community gardens, playgrounds, economic development activities, or open space, and may provide land and facilities for a variety of community services. In rural areas, CLTs may hold land for gardens, farming, timber and firewood, and may hold conservation easements to protect open space and ecologically fragile areas.
Who Controls a CLT?
A CLT is ultimately controlled by its members. All CLT residents are members, and other people in the community may also join. The members elect the CLT’s Board of Directors. Usually there are three kinds of directors on the Board – those representing resident members, those representing members who are not CLT residents, and those representing the broader public interest. In this way, control of the organization is balanced to protect both the residents and the community as a whole.