Equitable Adaptation Legal & Policy Toolkit
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 controlSee 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
- CLTs are the most cost-effective way of ensuring permanent affordability of housing with the lowest public subsidy over the long term.
- CLTs are supporting wealth-building and helping to close the racial-wealth gap in some communities by providing affordable homeownership opportunities for lower-income residents who receive some share of the appreciation of the property at sale, while paying affordability forward to the next buyer.
- Some CLTs are also playing important economic development roles in communities by supporting existing businesses and creating new opportunities for local business enterprises, including artists and community-serving nonprofits.
- CLTs often incorporate renewable energy and energy and water efficiency measures into housing projects to reduce total housing costs for residents and to reduce the environmental footprint of the city’s housing stock.
- They can also play other roles in delivering important environmental benefits, such as preserving and restoring greenspace, and stewarding land for parks or community gardens, or by incorporating green infrastructure stormwater management practices into CLT-owned lands.
- CLTs increase social cohesion by engaging residents in CLT governance and the management and maintenance of CLT-owned properties.
- They can help stabilize neighborhoods and prevent displacement, supporting diverse, mixed-income neighborhoods and helping to house residents who provide important community services (e.g., emergency responders, teachers, social service providers)
- CLTs can help to advance racial equity and remediate racist policies that limited homeownership for residents of color, such as redlining and exclusionary zoning, by enhancing community control and preserving and creating new affordable homeownership options in communities of color.See footnote 9
- CLTs can also be important city partners in engaging residents and enhancing community empowerment in land-use decisionmaking.
- In many communities, CLTs are also playing “place-making” roles by providing or protecting important community assets (such as parks, green space, urban gardens, and community centers) and by helping to preserve and provide space for important local institutions that provide cultural or social services to the community (e.g., health care, job training, etc.).
- CLTs can be administratively difficult to set up and often must navigate a patchwork of legal rules and requirements that vary by state.See footnote 10
- CLTs need significant start-up capital to be able to acquire and build their first projects and generate sufficient revenues to sustain long-term administration of the CLT in addition to building new affordable housing projects.
- CLTs often have to patch together funding and financing from multiple sources to advance projects and to incorporate improvements that enhance the resilience and sustainability of the housing (e.g., renewable energy, green infrastructure), which can be technically difficult and time consuming.
- CLTs do not need enabling legislation to operate in a state, however state enabling legislation can promote uniformity in structure and ease operation of CLTs by removing barriers within existing business association, property, and tax laws and by specifying affordability requirements and resale restrictions for CLT-owned housing.See footnote 11
- At the start-up phase, CLTs may need legal support to incorporate as a land trust, draw up legal agreements, and navigate state laws and regulations related to ground lease agreements, taxation of resale restricted housing, and other legal questions.
- City-CLT partnerships often require close coordination between city agencies and CLTs on ground lease arrangements, loan terms, covenants and other agreements that may need to be harmonized to ensure consistency with city rules and regulations and to ensure that CLTs are eligible for local, state, and federal funding sources.See footnote 12
- 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.
Case Study: Homestead Community Land Trust - King County, Washington
Case Study: Sawmill Community Land Trust - Albuquerque, New Mexico
In Seattle and King County, the Homestead Community Land Trust (Homestead CLT) is helping to preserve existing and build new affordable housing that incorporates green design features. The CLT currently stewards 13 acres of land with more than 200 homes for low and middle income homeowners earning 80 percent or less of area median income (AMI). Recent projects have incorporated green design features to increase the sustainability of land trust homes. The CLT is currently building twelve “net-zero” energy townhomes in area Renton, WA near transit, which will reduce both energy and transit costs for homeowners and help the region meet greenhouse gas reduction goals. Homestead CLT helps to reduce displacement pressures in areas experiencing gentrification and also provides wealth-building opportunities for homeowners who share in the equity from CLT-owned properties. The CLT has supported affordable homeownership opportunities for 238 households across King County benefitting more than 160 children and over 57 percent of CLT homeowners are residents of color. Homestead CLT residents have an average AMI of 57 percent and 68 percent of residents are families.
The Sawmill Community Land Trust (Sawmill CLT) in Albuquerque, NM provides an example of how CLTs can support community redevelopment and reduce displacement of existing residents. The Sawmill CLT was formed out of a community-driven planning process to redevelop the Sawmill-Wells Park neighborhood (between Old Town and downtown Albuquerque). The neighborhood had become blighted due to underinvestment and pollution from industrial facilities. The CLT’s first project, called Arbolera de Vida (Orchard of Life), was developed on a 27-acre formerly contaminated industrial property that it acquired from the city and facilitated clean up and redevelopment to include permanently affordable housing and other community amenities. The CLT stewards over two-hundred affordable housing units that incorporate green design features and has several more projects in development. Its developments also incorporate other community assets, including parks, community gardens and centers, and an orchard that contribute to community resilience in the neighborhood by building social cohesion, and improving public health and food security. This case study provides an example of a city-CLT partnership that helped advance environmental justice, sustainability, and intergenerational equity goals through the development of affordable housing projects that address pollution, improve public health, and build bonds between neighbors.