Group Title: Affordable housing issues
Title: Affordable housing issues ; vol. 12 no. 1
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 Material Information
Title: Affordable housing issues ; vol. 12 no. 1
Series Title: Affordable housing issues
Physical Description: Serial
Language: English
Creator: Shimberg Center for Affordable Housing
Publisher: Shimberg Center for Affordable Housing
Place of Publication: Gainesville, Fla.
Publication Date: December 2001
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Bibliographic ID: UF00087009
Volume ID: VID00012
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.


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M.E. Rinker, Sr., School of Building Construction College of Architecture PO Box 115703, University of Florida, Gainesville, FL
32611-5703 TEL: (352) 392-7697 SUNCOM: 622-7697 FAX: (352) 392-4364 e-mail: AFFHSNG@NERVM.NERDC.UFL.EDU

Volume XII, Number 1

December 2001

One of the primary barriers to the production of affordable housing is the cost of the land. Communi-
ties across the country have recognized this situation and have established private, non-profit corpora-
tions called community land trusts. These corporations acquire and hold land for the good of the
community and provide secure, affordable access to land and housing for community residents,
particularly for those residents with incomes too low to be served by the local housing market.
The following information is presented to introduce the community land trust concept. The material is
based on work by the Institute for Community Economics, Inc., whose web site can be visited at The Institute provides technical assistance nationwide to community housing
development organizations (CHDOs) and potential CHDOs that operate or plan to establish a
community land trust.

The Community Land Trust (CLT) concept
was developed in the 1960s as a means of
encouraging affordable resident ownership of
housing and local control of land and other
resources. It is a democratically controlled non-
profit corporation that owns real estate in order
to provide benefits to its local community.
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.

CLTs acquire vacant land and arrange for the
development of housing or they may 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 while the
buildings can be owned by those who use them.
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) renew-
able lease, which gives the residents and their
descendants the right to use the land for as
long as they wish to live there. When CLT


H 0 S N

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.

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 includ-
ing neighbors of CLT residents and people who
may want to have CLT homes in the future.
Usually the CLT board includes three kinds of
directors those representing resident mem-
bers, 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.

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 com-
munities 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 num-

ber of communities in expanding metropolitan
areas, in university communities, in expensive
resort communities, and in many other commu-
nities as well. These CLTs control housing costs
by permanently limiting land costs and "locking
in" subsidies so that they benefit one home-
owner after another and do not need to be
repeated each time a home is sold.
The problems of low-income neighborhoods
typically revolve around disinvestment and
absentee ownership. As homeownership de-
clines older buildings are likely to be bought by
absentee investors who frequently allow the
buildings to deteriorate while charging high
rents. The rent paid to these absentee owners
leaves the local economy. It is not saved, spent
in local stores, or used to improve the commu-
nity. 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.
Sometimes CLTs buy undeveloped land and
arrange to have new homes built on it; some-
times 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.

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.
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 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 af-
fordable 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.
CLTs can provide a variety of training oppor-
tunities 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
often can help residents find a practical
solution and may help make necessary finan-
cial arrangements.
CLTs have been established to serve inner-city
neighborhoods, small cities, clusters of towns, and
rural areas. A CLT working in a small city neigh-
borhood 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 de-
velop 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 ser-
vices. 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.

A CLT is ultimately controlled by its mem-
bers. 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.

The Institute for Community Economics
(ICE) provides technical assistance to commu-
nity-based organizations working to promote
community control of local land and to develop
permanently affordable housing. Priority for
technical assistance is given to community land
trusts (CLTs) and groups that want to establish
CLTs. Direct technical assistance to both urban
and rural groups is provided through site visits,
telephone and email consultation, and regional
and national training and conferences.

For additional information about community
land trusts contact:

Institute for Community Economics, Inc.
57 School Street
Springfield, MA 01105-1331
Tel: (413) 746-8660
Fax: (413) 746-8862

Affordable Housing ISSUES is prepared bi-monthly by the Shimberg Center for Affordable Housing for the purpose of
discussing contemporary issues facing affordable housing providers. Reproduction of this newsletter is both permitted and
encouraged. Comments or questions regarding the content are welcome and should be addressed to Robert C. Stroh, Director.

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