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Community Land Trusts

Community Land Trusts (CLTs) purchase and retain ownership of land to ensure its ongoing use for community purposes.  Often they are set up to promote the long-term affordability of rental buildings and ownership housing.  CLTs promote ongoing housing affordability by retaining ownership of the land beneath homes and multi-family buildings, even after those buildings are sold to income-qualifying households or other nonprofits.  By retaining land ownership, CLTs permanently remove the price of land from the home’s cost, thereby reducing the degree to which rising land prices inflate the cost of the home when property changes hands.  This land ownership also gives the CLT legal leverage to require that homes are sold at affordable prices based on agreed-upon resale formulas, or rented at affordable levels. 

Once the domain of nonprofit organizations, a growing number of municipalities have formed land trusts of their own to promote affordable housing, including Irvine, Chicago, Washington DC and 17 cities in Florida.  These are sometimes referred to as Affordable Housing Trust Funds.

CLTs or Affordable Housing Trust Funds can help preserve the affordability of scattered as well as contiguous housing.  For instance, a land trust could acquire and sell units in smaller buildings to first-time homebuyers, while selling larger buildings to nonprofits able to manage them as affordable rental housing. 

Case Studies

Laconia, New Hampshire

The Laconia Area Community Land Trust (CLT) has a number of initiatives geared to provide access to land, housing and economic opportunities for low to moderate-income families. The Laconia Area CLT began its’ work when residents of Laconia requested help in renovating the area. In the Avery Hill neighborhood of Laconia, subpar buildings were either demolished and rebuilt or entirely renovated. As a result, seven buildings with 14 affordable housing units were created in Avery Hill. Land Trust properties are seen as community assets and have helped to generate $44.5 million for the community. Full real estate taxes are paid on all properties in the communities the Trust serves, with $1.7 million paid to date. The Laconia CLT also provides Transitional Housing for homeless families. Sixty formerly homeless families have participated in their Transitional Shelter Program while others living in permanent housing have received transitional services.

Laconia CLT is responsible for 195 permanently affordable apartments in Belmont, Laconia, Meredith and Tilton, a 13-unit manufactured housing park in Meredith with six rental units and seven home-ownership units. They have also secured two permanently affordable homeownership homes and apartments at below market rates for low and moderate-income families. Currently, 24 additional units are under construction in Wolfeboro, NH.

The Laconia CLT provided 1,727 people with free seminars on financial literacy, first time home buying and foreclosure. As a result, 216 families that participated in the homebuyer seminars have accounted for $32.1 million in home purchases. In addition, 86 homes have been saved from foreclosure and 11 low-income families are currently saving for down payments in Laconia CLT’s Individual Development Account (IDA) Savings Accounts where their savings are matched three to one.

Seattle, Washington

Homestead Community Land Trust, incorporated in 1992, creates permanently affordable homes and offers households ongoing support to homeowners to avoid foreclosure. In 2004, Homestead launched its “buyer-driven Advantage Program” which provided purchase assistance grants to 48 eligible homebuyers between 2005 and 2009, allowing them to purchase market rate homes for sale and bring them into the land trust. In 2005, Homestead introduced developer partnerships by partnering with Shelter Real Estate LLC, Habitat for Humanity of Seattle/South King County, the Low Income Housing Institute, and Blue Heron JS, LLC. Between 2005 and 2010, these partnerships have attributed to the creation of 53 more affordable homes.

Homestead further plans to increase developer partnerships. These partnerships will result from incentive zoning and other regulatory means, thus expanding their service area to include more of King County, WA when opportunities coincide with capacity, as well as continuing their Advantage Program through 2014. Homestead currently has 102 homes in the trust with a goal of adding 100 homes each year by 2015.

Charlotte, North Carolina

Charlotte established an Affordable Housing Trust Fund to provide public funding to private developers in exchange for affordable units using a competitive bid process. The City Council set aside $10 million for the fund in 2001, and voters then approved another $35 million. The city has the flexibility to make the funds available as either a loan or grant for land acquisition or construction. By 2007 the fund had enabled the construction or rehabilitation of more than 2,800 units, more than half of which were for households earning below 30 percent of area median income. This number included 223 units of new affordable ownership housing, more than 900 new multifamily rental units, nearly 600 rehabilitated multifamily rental units, and more than 1,100 units for households with special needs. The average subsidy per unit was less than $14,000 (and sometimes included other affordable housing funds).