Key Features of the "Classic" Community Land Trust

For over thirty years, the Institute for Com­munity Economics (ICE) in Springfield, Mas­sachusetts has promoted a model of commu­nity development and affordable housing known as the Community Land Trust (CL T). Since 1992, the main features of this "classic" model have been enshrined in federal law in a definition drafted by ICE and approved by Congress. Although there is considerable variation among the 130 organizations in the United States that call themselves a Commu­nity Land Trust, ten key features are to be found in most of them.

1.) Nonprofit. Tax-exempt Corporation

A community land trust is an independent, not-for-profit corporation that is legally chartered in the state in which it is located. Most CL Ts target their activities and resources toward charitable activities like pro­viding housing for low-income people and redevel­oping blighted neighborhoods, making them eligible to receive 501 (c)(3) designation from the IRS.

2.) Dual Ownership

A nonprofit corporation (the CL T) acquires multiple parcels of land throughout a targeted geographic area with the intention of retaining ownership of these parcels forever. Any building already located on the land or later constructed on the land is sold off to an individual homeowner, a cooperative housing corpo­ration, a nonprofit developer of rental housing, or some other nonprofit, governmental, or for-profit en­tity.

3.) Leased Land

Although CL Ts intend never to resell their land, they provide for the exclusive use of their land by the owners of any buildings located thereon. Parcels of land are conveyed to individual homeowners (or to the owners of other types of residential or commercial structures) through long-term ground leases. This two-party contract between the landowner (the CL T) and a building's owner protects the latter's interests in security, privacy, legacy, and equity, while enforc­ing the CL 1's interests in preserving the appropriate use, the structural integrity, and the continuing af­fordability of any buildings located upon its land.

4.) Perpetual Affordability

The CL T retains an option to repurchase any resi­dential (or commercial) structures located upon its land, should their owners ever choose to sell. The resale price is set by a formula, contained in the ground lease, which is designed to give present home­owners a fair return on their investment, while giving future homebuyers fair access to housing at an af­fordable price. By design and by intent, the CL T is committed to preserving the affordability of housing (and other structures) - one owner after another, one generation after another, in perpetuity.

5.) Perpetual Responsibility

The CL T does not disappear once a building is sold. As owner of the underlying land and as owner of an option to re-purchase any buildings located on its land, the CL T has an abiding interest in what hap­pens to these structures and to the people who oc­cupy them. The ground lease requires owner occupancy and responsible use of the premises. Should property owners allow their buildings to be­come a hazard, the ground lease gives the CL T the right to step in and force repairs. Should property owners default on their mortgages, the ground lease gives the CL T the right to step in and cure the de­fault, forestalling foreclosure. The CL T remains a party to the deal, safeguarding the structural integrity of the buildings and the residential security of the occupants.

6.) Community Base

The CL T operates within the physical boundaries of a targeted locality. It is guided by - and accountable to - the people who call that place their home. Any adult who resides on the CL 1's land and any adult who resides within the geographic area deemed by the CL T to be its "community" can become a voting member of the CL 1.

7.) Resident Control

Two-thirds of a CL 1's board of directors are nomi­nated by, elected by, and composed of people who either live on the CL 1's land or people who reside within the CL 1's targeted "community" but do not live on the CL 1's land.

8.) Tripartite Governance

The board of directors of the "classic" CL T is com­posed of three parts, each containing an equal num­ber of seats. One third of the board represents the interests of people who lease land from the CL T ("leaseholder representatives"). One third represents the interests of residents from the surrounding "com­munity" who do not lease CL T land ("general repre­sentatives"). One third is made up of public officials, local funders, nonprofit providers of housing or social services, and other individuals presumed to speak for the public interest ("public representatives"). Control of the CL 1's board is diffused and balanced to ensure that all interests are heard but that no interest is pre­dominant.

9.) Expansionist Acquisition

CL Ts are not focused on a single project. They are committed to an active acquisition and development program, aimed at expanding their holdings of land and increasing the supply of affordable housing (and other types of buildings) under their stewardship. Most CL Ts do their own development with their own staff. Others leave development to nonprofit or gov­ernmental partners, focusing their own efforts on assembling parcels of land and preserving the afforda­bility of the structures upon it.

10.) Flexible Development

The CL T is a community development tool of un­common flexibility, easily accommodating a variety of land uses, a range of income groups, and a diversity of building tenures and types, either scattered throughout a CL 1's holdings or integrated within the same mixed-use, mixed income projects. CL Ts around the country construct (or acquire, rehabilitate, and resell) housing of many kinds: single-family homes, duplexes, condos, co-ops, SROs, multi-unit apartment buildings, and mobile home parks. CL Ts create facilities for neighborhood businesses, non­profit organizations, and social service agencies. CL Ts provide sites for community gardens and vest­pocket parks. Land is the common ingredient, linking them all. The CL T is the social thread, connecting them all.