What is a Community Land Trust?
Community land trusts (CLTs) are community-based, social impact, nonprofit organizations, created to ensure long-term housing availability and affordability. Based on the idea of ‘Perpetual Affordability,’ community land trusts become the stewards — maintaining the land permanently. New homeowners purchase their property with an affordable long-term lease on the land. When the home is sold, the owner earns a portion of the increased property value, having agreed to invest the remainder in maintaining the trust. This act of “paying it forward” allows for the sale of the home to the next family or individual at an affordable price.
Why the Community Land Trust
During the national housing market downturn in 2008, unemployment rates and foreclosures on traditional mortgages rose dramatically. At the same time, there was a decline in foreclosures for owners in nationwide community land trusts*, and according to data from The Housing Fund and Vanderbilt University, substantially lower delinquency and foreclosure rates compared to owners of market-rate homes**. Conventional homeowners were ten times more likely to be in foreclosure proceedings than CLT homeowners at the end of 2010 (respectively 4.63% in the conventional market versus 0.46% in mortgages held by CLT homeowners), the same study found.
The success of the CLT model has been instrumental in providing over 500 long-term affordable housing units in Pinellas County since 2008.
*Lincoln Institute of Land Policy.
** Stable Home Ownership in a Turbulent Economy — a study conducted by a researcher from The Housing Fund and Vanderbilt University and commissioned by the National Community Land Trust (CLT) Network.