What Is a Community Land Trust?

A Community Land Trust (CLT) is when a public entity or non-profit sells the improvement (the actual house) but not the land beneath it. The land is owned by the CLT and is then leased to the homeowner for a small fee. In GNDC’s CLT, the home is sold at an affordable price to an income eligible household and the land is leased for $25 per month/$300 per year. The homeowner’s property taxes reflect the value of the home itself, and the property taxes for the land are very low because of the small lease fee. 

The home increases in value, but at a set rate, usually 1.5% to 2% each year, so that the sales price is fixed and known at any given time. When the homeowner decides to sell the home, GNDC will be the likely buyer and the homeowner will recoup the mortgage principal they paid over time as well as the fixed amount of increased value. This system keeps the property taxes low and manageable and ensures that the home will be affordable to the next buyer.

 
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Benefits of a Community Land Trust

Community Land Trust affordable homeownership programs are a proven vehicle for long-term preservation and stewardship of public and private investment in affordable housing. Community Land Trust programs stand out for at least three reasons:

  • Community Land Trust programs provide long-term affordable homeownership units that give low- and moderate-income families safe, quality housing in stable communities, including communities that are undergoing development and rising prices. The resale and income eligibility restrictions preserve the affordable homes in perpetuity for the community.

  • Community Land Trust programs provide an entry into homeownership for households who were previously renting and cannot afford to purchase a home on the private market. CLT homeowners can learn the responsibilities of homeownership and build up some equity to take with them to their next home.

  • Community Land Trust programs are a reliable, sound investment for public and private partners. The financial assistance that these partners provide is retained in the homes for future homeowners instead of just the first generation of homeowners.

Source:

Platts-Mills, Eliza. “A Guide for Developing Community Land Trust Affordable Homeownership Programs in Texas.” The University of Texas at Austin School of Law, 2018, law.utexas.edu/wp-content/uploads/sites/11/2018/07/2018-07-ECDC-CLT-Toolkit.pdf.