From New York to California, communities struggling with a shortage of affordable housing are giving renewed attention to a model of housing preservation that ensures home prices and rents stay within reach for low-income households.
In the community land trust model, a nonprofit organization retains ownership of land and sells or rents housing to lower-income households. To make certain would-be homeowners and renters benefit from the arrangement for years to come, the trust caps the resale prices and rents of the housing, maintaining affordability for the next homeowner.
Today there are around 250 CLTs across the U.S. and several organizations, including the Center for NYC Neighborhoods, are examining the model for use in New York City, where the affordability crisis is demanding innovative solutions.
There are a lot of reasons to love CLTs — here are seven of them.
1. CLTs help neighborhoods resist gentrification
When CLTs place land in control of communities, they are also taking land and housing out of the speculative market. That means that CLT housing remains affordable even when gentrification pressures mount, which protects families from displacement.
2. CLTs give more families the opportunity to own homes and co-ops
Fewer and fewer working families can afford to buy a home in the five boroughs. CLTs create opportunities for families to buy homes at affordable prices. When they decide to sell, they will keep a portion of the appreciation but will sell at a below-market price, making the home affordable to another family of limited means. Keeping the home affordable, from family to family, will benefit generations of New Yorkers rather than one lucky household.
3. CLTs give community members a meaningful voice in development decisions
Community members and CLT renters and homeowners are always involved in the governance of community land trusts. This helps direct the CLT toward development that is in the interest of its community and that reflects the values of its residents.
4. CLTs enable lower-income households to build wealth
A family that owns a house or co-op on a CLT benefits by steadily gaining equity in their home. The family can then use this equity as a downpayment on a market-priced home. In this way, CLTs act as a stepping stone for low-income families to go from renting to building wealth — which they can pass on to their children.
5. CLTs prevent foreclosures
CLTs take an active role in preventing foreclosure. They work with homeowners to make mortgages affordable and sustainable, and provide financial literacy education. They can also assist with major home repairs and intervene early when a homeowner is at risk of falling behind on his or her mortgage. As a result, CLTs typically experience low foreclosure rates. At the height of the foreclosure crisis, homeowners living in CLTs were 10 times less likely to be in foreclosure than homeowners in the conventional market.
6. CLTs make taxpayer dollars for affordable housing go further
Every affordable apartment or house is funded with significant government investment and when affordability restrictions expire — often in as little as 15 years time — the owner of the apartment gets to cash out. In the CLT model, tax dollars that are applied to the initial home construction are preserved for subsequent homeowners. This means public investments have a longer and larger impact in a CLT.
7. CLTs promote civic engagement
There are many examples throughout the country that indicate that residents who took leadership roles in their CLTs also became leaders in their local communities. Engagement on CLTs boards, committees, and sponsored activities can translate into residents acting to spearhead positive change within their communities.