Community Land Trusts
A Community Land Trust (aka housing trust) is a
non-profit organization that owns land and housing
to prevent its cost escalation. Check out Wikipedia's definition.
CLTs are one viable and vital piece of the puzzle to help make housing affordable IN PERPETUITY for individuals and families committed to living and working in communities of any size.
NeahCasa is incorporated as a CLT and is committed to this form of shared equity for the benefit of both homeowners and the community as a whole.
How a CLT Works:
A CLT can buy (or be given) land to hold to make it available at lower cost for housing. Houses already existing on the land or newly built are either made available for "ownership" via long term leases, or rented at affordable rates.
"Ownership" of the house is conveyed via a 99 year ground lease to someone in the community. The ground lease can be renewed for an additional 99 years. It is inheritable and gives homeowners virtually the same bundle of ownership rights as market-ownership with certain resale restrictions. Any increase in equity is shared between the homeowner and the trust. There are structured resale formulas to work all this out.
Other shared equity arrangements are also possible that may accomplish some of the same ends.
Housing Trusts Benefit the Community
Because the CLT owns the property under the house in perpetuity, it keeps the land out of the rising real estate market. Only the house can be sold and the terms of that resale are controlled by the trust. Thus the trust will preserve affordability for future buyers without requiring additional subsidies.
Housing Trusts Assure Affordability
Placing land in trust eliminates inflation in land values. Holding homes in trust eliminates secondary financing cycles and transfer costs. Shared equity resale restrictions allow homeowners to keep and grow equity, while preserving affordability for the next owners.
Housing Trusts are Successful
Over 200 CLTs operate in the United States and England, with an outstanding track record. Florida is setting up a statewide program. Chicago has set up a city-wide program. The Burlington CLT in Vermont (one of the originals) is so successful that the state legislature requires all public housing funds go to CLTs so most towns have them.
Many successful CLTs exist in the Northwest and Oregon (Portland, Clackamas, Bend, Ashland to name a few). Most relevant to us on the north Oregon coast, are those on Washington's San Juan Islands that have been operating 10 years or more, under conditions are similar to ours. See lists in Resouces below.
Housing Trusts are Controlled by the Community
Housing Trusts are 501c3 public benefit organizations. They are community controlled because membership is drawn from people who live on trust-owned land (leaseholders), from community organizations, and from everyone in the wider community who wishes to join. Members elect a governing board of one third from each of those groups.
Housing Trusts Reduce Transaction Costs on Housing Purchases
Advertising, attorneys, realtor and recording fees amount to a third of the sales price of a home over a person's lifetime. Ongoing housing trust ownership dramatically reduces such costs, while other innovative community housing exchanges and ownership patterns can also contribute.
Housing Trusts Can Do Some Creative Things to Acquire Land:
- Elderly homeowners can donate their land to a CLT but be given a "life estate" which allows them to continue to live on it until their deaths. The CLT can handle maintenance during that period.
- Local jurisdictions can donate surplus land to a CLT to ensure that it is affordable forever to local residents who need support.
- There are tax benefits available to individuals who make a gift or below-market-value sale of land to a CLT or other non-profit such as a conservancy trust.
Conservation Options for Private Landowners and Conservation Options: A Landowner's Guide from the Land Trust Alliance or available from your local land trust summarize the benefits.
Housing Trusts Can Also:
- Create a Low/No Interest Revolving Loan Fund - A number of federal and state programs exist for special categories - veterans, elderly, low-income, and other special needs, that provide funds for revolving loan funds. Habitat for Humanity uses a similar no-interest system. A community based program would speed up elimination of finance portion of housing costs.
- Relocate & Dismantle Houses - Usable houses are demolished every year to make room for new development. In some cases, it makes sense to relocate those houses for new occupants. In other cases it is possible to carefully dismantle the house and reuse the materials. Knowledge of the process and a stock of available land is essential.
- Buy and hold agricultural land and/or housing - This is an important area of concern that needs is getting attention nationally and needs a lot more attention locally.
- Create New Solutions for Special Needs Housing - Innovative models are much needed for a new generation of cooperative, flexible caregiving homes for elders, those needing hospice, and the handicapped.