Community Land Ownership: Community Land Trusts

Community land trusts can be helpful partners to cities in advancing affordable, sustainable, and resilient housing options and combating gentrification and displacement. Community land trusts (CLTs) are nonprofit organizations designed to enable community control^{See footnote 1} and stewardship of land for uses that benefit the public.^{See footnote 2} CLTs have been particularly successful at preserving affordable housing by removing land from the speculative market.^{See footnote 3}   They acquire land through purchase or donation and build new or preserve existing affordable housing or other community assets on the land. Then CLTs sell (or sometimes rents) the improvements, but retain title to the underlying land. The buyers of the structures are granted a lease to the land (typically for a term of 99 years) for a small annual fee (e.g., $1,200/yr.). And resale of the property is restricted using a resale restriction formula to ensure permanent affordability.

CLTs can also play important roles in supporting urban resilience and sustainability initiatives. They help to address the primary stressor that affects an individual’s resilience — safe and affordable housing. Additionally, many CLTs incorporate green design elements into their housing projects such as renewable energy, and energy and water efficiency improvements, which reduce the total cost of housing for residents.^{See footnote 4} CLTs can also play important land stewardship roles and support other publicly beneficial projects in neighborhoods, including community solar, green infrastructure for stormwater management, and projects that provide other community amenities such as parks, urban gardens, or community centers.

CLTs can also be a powerful tool for enhancing social cohesion and reducing economic inequality. They deliver important social benefits that are critical for community resilience, including enhancing community control over land-use decisions and creating shared community spaces and facilitating activities that build relationships among residents. They have also been highlighted by community-based organizations as a powerful tool for addressing gentrification and displacement. In some communities, CLTs are working to counteract gentrification by helping tenants threatened by displacement raise revenues needed to acquire and preserve properties for housing or commercial uses (see e.g., Oakland CLT). Where large scale redevelopment or resilience projects are contemplated that may increase property values and rents, cities can work with CLTs to proactively develop or preserve housing to reduce gentrification and displacement pressures (e.g., 11th Street Bridge Equitable Development Plan that recommended creation of the Douglass Community Land Trust).^{See footnote 5}  By preventing displacement and preserving and enhancing social networks, CLTs build social cohesion in communities, which research has shown is a critical component of community resilience.^{See footnote 6}

In many communities, CLTs are also working to enhance economic resilience for residents and the broader neighborhood. First, CLTs provide wealth-building opportunities for homebuyers and help to bridge the racial wealth gap, by giving lower income residents the opportunity to buy an affordable home and share in some of the equity generated by the appreciation in value of the home, with the remaining equity used by the CLT to maintain the property and build new CLT-owned housing. Additionally, CLTs enhance housing stability by providing financial counseling to help residents save a downpayment and secure mortgages needed to acquire a CLT-home, protecting residents from predatory lending and foreclosures, and helping residents finance maintenance and improvements to their homes. Many CLTs are also incorporating commercial, co-working, and artisan space to support local business and entrepreneurial activities among residents. In this way, CLTs have provided critical support to build up local economies by acquiring and preserving buildings housing local businesses and nonprofits.

Cities can support CLT work on affordable housing, resilience, and sustainability at all phases (from startup to long-term operations), including by:

• Supporting CLT planning and business development processes;
• Providing technical assistance and training;
• Amending laws to ensure that the CLT-model is compatible with funding sources, regulatory programs, and housing policies (e.g., tax law, inclusionary zoning);^{See footnote 7}
• Creating preferences for CLTs in grant and loan programs, and providing direct cash subsidies or loan guarantees;
• Streamlining administrative processes and providing regulatory concessions (e.g., waiving application and impact fees, relaxing zoning requirements);
• Providing city-owned or tax-foreclosed land to CLTs through donations or below-market sales; and
• Adjusting tax assessments for CLT-owned properties to ensure fairness for shared-equity homeowners.^{See footnote 8}

Considerations of Community Land Trusts

Lessons Learned

• Cities should consider donating or offering below-market sales of city-owned or tax-foreclosed lands to support CLT efforts to build community-led, sustainable, resilient, and affordable housing. Although this requires cities to forego some of the revenue they can generate through land sales to the highest bidder, public-private partnerships with CLTs will help to ensure that cities are putting their most valuable asset — land — to publicly beneficial uses that help cities advance their affordable housing, equity, sustainability, and resilience goals. Without access to low-cost land and other subsidies, it is difficult for CLTs to compete on the private market with for-profit developers and to offer homes at prices that lower income residents can afford. Land banks can also be used as a way to clear title to tax-foreclosed and underutilized properties and transfer title to CLTs to promote redevelopment of permanently affordable homes and other community-serving amenities. 
• Cities can also provide start up funding, technical support, and staff to help establish CLTs and build their capacity to acquire properties, build affordable homes, craft legal documents (like groundleases and resale restriction formulas), and access sources of funding for resilience and sustainability features, in ways that are consistent with local, state, and federal funding requirements.