What is a Community Land Trust?
A community land trust (CLT) is a nonprofit, community-based corporation committed to the permanent stewardship of land and the permanent affordability of housing and other buildings located upon its land. Most CLTs target their programs and resources toward charitable activities like redeveloping blighted neighborhoods or providing housing for lower-income people, allowing the organization to qualify for a 501(c)(3) tax exemption from the IRS.
Land acquired by a CLT is never resold. It is retained by the CLT and held in trust for the community. Although a CLT never resells its land, it provides for the exclusive use of its land by leasing out separate parcels to individual homeowners, cooperative housing corporation(s), nonprofit developers of rental housing, or other nonprofit, governmental, or for-profit entities. These ground leases last for a very long time, typically 99 years.
Any residential or commercial buildings already located on lands acquired by a CLT or any buildings later constructed on these lands are not retained by the CLT. They are sold off to organizations or individuals who are leasing the CLT’s land. The owner of a house, a condominium, or a multi-unit residential or commercial building located on a CLT’s land holds a deed for the building and a lease for the underlying land.
The CLT retains an option to repurchase these buildings, should their owners ever choose to sell. The resale price is determined by a formula contained in the ground lease. This formula, which usually yields a resale price that is lower than the building’s market value, is designed to give the seller a fair return for his/her investment, while giving subsequent buyers fair access to a home or commercial space at an affordable price. By design and by intent, the CLT is committed to preserving the affordability of housing (and other structures) – one owner after another, in perpetuity.
© 2007 Michael Brown
The goal is to develop communities where residents can thrive.
Blue Goose Community Development is a 501(c)(3) organization.