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Community Land Trusts: Affordable access to land and housing

Community Land Trusts: Affordable access to land and housing

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The Community Land Trust (CLT) is an increasingly important strategy for addressing affordability of land and housing for low- to moderate-income residents of communities throughout the United States. CLTs are generally non-governmental, nonprofit organizations which acquire land and hold it in trust for the benefit of the local community. They provide opportunities for residents below a certain income threshold to lease the land and buy or rent affordable housing, create community gardens, and/or practice sustainable agriculture and forestry.


The Community Land Trust (CLT) is an increasingly important strategy for addressing affordability of land and housing for low- to moderate-income residents of communities throughout the United States. CLTs are generally non-governmental, nonprofit organizations which acquire land and hold it in trust for the benefit of the local community. They provide opportunities for residents below a certain income threshold to lease the land and buy or rent affordable housing, create community gardens, and/or practice sustainable agriculture and forestry.


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03/26/2014

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CLTs may generate sufcient ground
rent or lease fees to cover some of their
operating expenses and ongoing stewardship
responsibilities. Te inherent nature of ground
rent as an afordable monthly payment for
homeowners (generally < $50 per month)
means that the average CLT does not generate
enough lease fees to cover all of its operating
expenses or specifc project costs. In cases
where a CLT manages and leases apartments
or commercial space, maintenance fees and
rental fees also generate income.

Growth does not mean that CLTs can begin
to generate enough income from lease fees to
cover their operating costs. As CLTs grow to
include more housing units and more lease
fees, their operational costs can be expected
to increase. One uncommon exception where
signifcant income could be generated from
lease fees can occur in more expensive housing
markets, where CLTs may charge a higher
monthly ground rent ($50 to $100) while still
providing afordable housing options for CLT
homeowners.

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COMMUNITY LAND TRUSTS: AFFORDABLE ACCESS TO LAND AND HOUSING

A typical CLT may charge between $10 and
$100 per month as a lease fee for the land it
owns and which is used by residents who own
or lease homes, or businesses on CLT land.
Lease fees at the higher end of this range can
lead to greater sustainability for the CLT, but
can undermine the mission of the organization
by reducing the afordability of homes or
businesses on CLT land. Up-front subsidies
such as grants and low-interest loans can allow
the CLT to charge higher lease fees without
directly impacting residents or reducing their
ability to make mortgage payments.

As an example, Burlington Associates
illustrates in the following chart how increased
lease fees directly impact the homeowners’
ability to borrow funds to purchase a home.
Particularly for low- to moderate-income
residents on a fxed income, each dollar paid
toward a lease fee means a dollar less can be
paid toward the mortgage.

In the following example, modifed from
a sample provided by the National CLT
Network, a CLT can estimate the amount of
fees it can generate toward its annual income:

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