Community leaders and residents seeking to foster neighborhood stability and long-term affordability have several emerging models for community land ownership at their disposal. Among these, Community Land Trusts (CLTs) and Community Investment Trusts (CITs) stand out as distinct approaches, each with unique governance structures and mechanisms for achieving community benefit. While CLTs primarily focus on securing affordable housing, CITs aim to build local wealth through commercial property investment.
Understanding the differences between these models, including their governance, how they ensure long-term affordability or economic benefit, and their specific advantages, is crucial for evaluating their suitability for local neighborhood development. This comparison will help clarify how these models operate and how other shared equity models relate to CLTs.
Community Land Trusts (CLTs): Governance and Affordability
Community Land Trusts (CLTs) are nonprofit, community-based organizations designed to acquire and hold land permanently for the benefit of the community. They are a proven model for communities to control land and development, providing lasting community assets and shared equity homeownership opportunities, according to the Grounded Solutions Network. CLTs develop various projects, including rural and urban agriculture, commercial spaces, affordable rental and cooperative housing, and the conservation of land or urban green spaces.
A defining characteristic of CLTs is their governance structure. They are typically governed by a tripartite board of directors, which includes CLT homeowners, other community residents, and public representatives, as noted by the National League of Cities. This structure ensures balanced representation and embeds community building and collective decision-making into the trusts themselves, emphasizing self-determination, according to the Brookings Institution.
CLTs secure long-term affordability by separating land ownership from homeownership. The CLT owns the land, while homeowners purchase the structures on that land and lease the land from the trust through a long-term ground lease. This ground lease includes a resale formula that caps the price when the owner decides to sell, preserving affordability for future low-income buyers, as explained by the Lincoln Institute of Land Policy. For instance, the City of Lakes CLT's resale formula allows owners to benefit from 25 percent of the increase in value while capping the price to maintain affordability, according to the National League of Cities. This mechanism ensures perpetual affordability, resisting gentrification and displacement, and capturing the public's investment for long-term community benefit, as highlighted by the National League of Cities. However, this model limits the total equity an owner-occupier can accrue, and the land itself always remains in trust, which is a trade-off compared to traditional housing markets, the Brookings Institution points out.
