Community Land Trusts
Summary
A Community Land Trust (CLT) is a non-profit organization stewarding land and property for the benefit of its place-based community members through the use of a ground lease that ensures permanent affordability and community control. Although often used for housing, it can also provide community control over commercial, agricultural, and civic spaces. As of 2022, there are more than 300 CLTs in the US.
The key strategy of CLTs is the decoupling of land and property. Typically, once a CLT acquires land, either with or without property on it, it’s then placed in the trust for the community in perpetuity and subsequently leased to a prospective property owner. The property owner could be anyone from a single family to an affordable housing developer. The ground lease specifies the resale formula, limiting the price so it’s affordable for the next property owner.
💡 Affordability is preserved through two primary mechanisms
1. Decoupling of land and property
2. Resale formulas, often specified in the ground lease agreement
Community governance of CLTs is commonly balanced with a tripartite board structure including equal representation of CLT resident interests, broader community members’ interests (residents in CLT’s service area) and the public interests. Some CLTs modify and add additional member classes such as staff members and general dues-paying members.
Advantages
Permanency: CLTs permanently remove land from the market for the community
Uncouple land and property: The land/parcels cannot be resold, but the properties and buildings on the land can be sold. This also reduces the price of properties since land is not part of the transaction.
Direct ownership: Community members can directly purchase and own properties on CLT land.
Mainstreaming: The CLT model today, which first emerged in the 1970s, is used by more than 300 organizations. This means potential funders are more familiar with the model and that there is a wealth of knowledge and lessons to draw from.
Challenges & Critics
Slower real estate acquisition: CLTs hold on to the land in perpetuity by design, which, unfortunately, also renders the asset illiquid. Moreover, due to CLTs’ reliance on donations, grants, and fundraising, the acquisition process tends to be slower.
Limited mortgage options for property buyers: Due to the restricted property resale value stipulated in the ground lease, individuals find it harder to secure a mortgage. Furthermore, lenders backed by Fannie Mae often demand that CLTs terminate all affordability provisions in the event of foreclosure, threatening the core value of CLTs.
Shifting from community-control of land and grass-root organizing to affordable housing development: Given the dire housing crisis, and perhaps the mainstreaming of the movement, more CLT practitioners are shifting the focus of CLTs to affordable housing development and forgoing, or at least deemphasizing, community control.
Emerging Practices
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Embed in the solidarity economy ecosystem
Solidarity economy requires permanent and affordable spaces. CLT can work directly to, or together with organizations that, develop solidarity economic activities and cultivate cooperative values through member and resident education
💡 Example: Cooperation Jackson links its CLT to a community and education center, urban farm, and industrial space.
📖 Solidarity economy definition: “a global movement to build a just and sustainable economy where we prioritize people and the planet over endless profit and growth. Growing out of social movements in Latin America and the Global South, the solidarity economy provides real alternatives to capitalism, where communities govern themselves through participatory democracy, cooperative and public ownership, and a culture of solidarity and respect for the earth.”
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Use of community plan
A community plan with a robust participatory planning process (in which a CLT led or is involved) can be used to enhance accountability from local government stakeholders.
💡 Example: Parkdale Neighborhood Land Trust presented neighborhood goals from the community plan they had worked on three years prior in response to a funding proposal by the city council to quickly take control of the narrative and acquire a site.
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Emphasis on social return on investment
If a CLT combines traditional funding sources with other community investment approaches (such as a community investment trust), the CLT needs to clearly convey the investment’s emphasis on social return.
💡 Example: Northern California Land Trust collaborated with East Bay Permanent Real Estate Cooperative (EB PREC) and leveraged EB PREC’s community investment to acquire Coop 789. In order to become a community investor for EB PREC, they require the prospective investor to sign the agreement on EB PREC’s bylaws and eight points of unity, which include “We move at the pace of community, not capital” and “We reject the speculative market as a profit-making strategy.”
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Acquire land through inside/ outside strategy
Develop strong relationships both inside (government, developers) and outside (grassroots mobilization organizations) institutions of power and money. This requires the abilities and savvy to operate on both sides.
💡 Example: Oakland CLT relied on an existing relationship with the City and the direct action and organizing of Moms 4 Housing and Alliance of Californians for Community Empowerment to act as an intermediary that facilitated the sale of the vacant investor-owned home to the CLT.