What is a Community Land Trust?
Community Land Trusts are one of several approaches used to create permanently affordable housing. Other approaches include limited-equity cooperatives and use of deed restrictions. A brief comparison of these three models is contained later in this Toolbox.
A Community Land Trust (CLT) combines the best features of homeownership – control, predictability of mortgage costs, inheritability and wealth creation – with protection against gentrification through acquisition and permanent community stewardship of land for affordable housing. As a non-profit organization, the CLT holds land in permanent trust while improvements on the land are made available for families to purchase. This separation of the ownership of the land and the home enables the land cost to be removed from calculation of the purchase price of the home, thus making the home significantly more affordable. CLT land is made available at a nominal fee for the homebuyers’ use through a 99-year ground lease which defines the rights and responsibilities of both the homeowner and the CLT. A resale formula within the ground lease defines the owners’ equity share and calculation of the sales price upon resale. The long-term stewardship role that CLT’s play enables them to support their homebuyers well with pre-purchase education assistance if they encounter unexpected financial difficulties and early intervention to avoid foreclosures. The base of community support and the diverse composition of the CLT Board serve to guide the CLT in being responsive to the community’s needs.
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