A Community Land Trusts (CLT) is a community-based nonprofit organizations that are formed specifically for the purpose of preserving affordable housing for future generations.

A CLT’s primary tool for achieving this goal is long-term ownership of land. Land trusts retain title to the land under affordable homes selling the buildings to homebuyers. The land trust then enters into a 99-year ground lease, which gives the homeowner day-to-day use of the land while preserving long-term control over its use and disposition in the hands of the land trust.

There are more than 200 CLTs in the United States. While each organization plays a slightly different set of roles, most CLTs develop and market affordable units, monitor owner occupancy regularly, review financing, and actively manage resales. CLT ground leases generally require homeowners to offer their units for sale to the CLT before marketing them to other eligible buyers. The CLT can then either purchase the unit or assign its purchase option to an eligible buyer from their waiting list.

Many CLTs perform this long-term stewardship only for housing that the CLT directly developed (either as new construction or through renovation of existing homes). But increasingly, CLTs across the country are partnering with private developers and playing a stewardship role over units produced through local inclusionary housing requirements. In these cases, a developer of market-rate housing builds units that they sell to a CLT at a price affordable to the CLT’s target homebuyers, and the CLT resells the home but not the land. The CLT then relieves the developer of any long-term monitoring or support responsibilities.

Burlington, Vermont, Irvine, California, Chapel Hill, North Carolina, and Denver, Colorado, all work with local CLTs for the administration and stewardship of some or all of these programs’ for-sale inclusionary housing units. In Burlington, for example, transferring the stewardship and administration of for-sale homes to the Champlain Housing Trust has enabled the city to reduce its program administration workload to approximately 10 percent of one full-time employee.

In Chapel Hill and Burlington, all new owner-occupied homes are placed with the CLT, though this is not explicitly required by policy. Burlington, however, does offer the Champlain Housing Trust first right of refusal for purchasing all for-sale inclusionary homes.

Chapel Hill, North Carolina

Community Home Trust, a CLT in Chapel Hill plays a key role in the administration of the town’s inclusionary housing program.

The town’s ordinance requires developers to provide units with lasting affordability and encourages private developers to work with the CLT to produce their affordable units. The private developers build the units and sell them to the CLT at an affordable price. The CLT then takes on the responsibility for finding eligible buyers and sells the homes to income-eligible buyers subject to 99-year resale restrictions.

This approach enables the CLT to preserve the home’s affordability over time and frees the town from this ongoing administrative burden. The market-rate developers pay the CLT a marketing fee, the local governments provide limited operating funding, and homeowners pay a monthly fee that supports the organization’s ongoing administration and monitoring costs.*

Advantages

  • A CLT has housing preservation as its primary mission
  • Community and homeowner involvement in governance can strengthen the program
  • Ownership of land provides a strong legal position for ensuring ongoing affordability
  • Ground lease fees can support ongoing administration costs

Disadvantages

  • Creating and sustaining a special purpose organization can be more expensive especially for a small number of units
  • Local government may give up some direct control over the program by partnering with a CLT