"Free" Land

Shrinking public budgets are placing housing affordability problems square on the shoulders of local communities. Successful local strategies have to deal with getting out from under two of the largest problems - finance costs and land costs.

"Free Housing" explains a strategy to break out of endless home financing cycles. Part of that strategy involves breaking out of the pattern of soaring land prices.

"Free Land" is an approach that uses a combination of several strategies to minimize or eliminate land costs for permanently affordable housing through nonprofits such as Community Land Trusts (CLTs):

  1. Obtaining free land from local jurisdictions, organizations, or agencies. This might be surplus land, vacated street or highway rights of way, or tax foreclosures.
  2. Obtaining "bargain sale" land from property owners facing capital gains tax from property sale or development, or facing estate taxes. A bargain sale is where the difference between a low sale price on a property to a non-profit and its market value is considered by the IRS to be a donation, offsetting other income of the seller for tax purposes. The owner's tax savings effectively pay for the land donated to the non-profit. (See Stephen J. Small's Preserving Family Lands book series.)
  3. Selling a portion of a property to pay off the remainder of the land and making it available "free" for permanently affordable housing.
  4. Allowing the bringing of land dedicated to permanently affordable housing into a community's Urban Growth Boundary at rural prices. (This is particularly applicable to coastal communities that need to relocate their development upland to deal with tsunami and global warming impacts.) Download Tom's LCDC letter.
  5. Passing ownership of such land parcels during the period they are being upzoned to urban density and value (or just upzoning of presently urban land to higher density) through a person or entity facing large income taxes from other reasons. A bargain sale or donation of the now-more-valuable upzoned land to a non-profit CLT can save that interim owner enough on taxes to repay their original "investment" in the land.

In combination, these or other creative variations (see Rezoning), are some of the only available options for obtaining land at costs that can support affordable housing in today's markets.

NeahCasa welcomes discussion with landowners that might benefit from such transactions and would like to invest in their local community.