Community Land Trust (CLT)

A Community Land Trust (CLT) is an independent, private organization that owns land and takes care of (or “stewards”) that land, making sure it is being used to benefit the community The CLT owns land in perpetuity.

A CLT can acquire existing homes or vacant land through donations or other funding methods. The properties do not have to be next to one another in a group – they can be scattered throughout the community. A CLT can also build new homes on land that they acquire.

CLTs most often help first time homebuyers make the difficult jump from renting to home ownership.

Community residents can purchase homes, but not the land on which the houses sit. Instead, residents enter into low-cost, long-term property leases with the CLT, known as ground leases, typically for a 99-year period.

Because the value of the land is taken out of the purchase transaction, a CLT home becomes lower priced than the market would normally dictate.

Although CLT residents can never sell the land their home is on, they otherwise have the same rights as other homeowners. During the term of the ground lease, they enjoy full use of the property and other rights associated with homeownership.

CLT residents have most of the same obligations as other homeowners, including liability for property taxes and full responsibility for home and property upkeep.

CLT residents can sell their homes, although the CLT has a right of first refusal for every sale and there is a cap on resale profits so that the housing remains more affordable for the next owner.

CLT residents may not rent out their properties. Instead, CLT leases typically include an occupancy requirement that the property must serve as the owner’s primary residence. CLTs allow residents to pass the property lease and ownership of the home to their children, which promotes generational wealth-building within families.

Community land trusts recycle a single private investment. Resale formulas mean that the one initial price reduction which made a home more affordable stays with the home, keeping it more affordable in perpetuity, as opposed to being lost when the first homeowner sells.

Homeowners in CLTs have much lower rates of delinquency and foreclosure than homeowners in the regular market.