Community Land Trusts (CLTs) are community-based non-profit organisations dedicated to tackling housing affordability challenges by decoupling land ownership from building or home ownership. The organisation purchases land and holds it in trust for the community as part of a conventional CLT concept. The homes on the land are then purchased or rented by individuals or families, but the CLT maintains ownership.
The majority of households that benefit from CLT developments, which offer affordable housing, are those with low to moderate incomes. They achieve this by keeping houses cheap for future buyers by reducing their resale value. To assist people in purchasing real estate in their communities, CLTs may also offer financial assistance or subsidies.
Community involvement is a fundamental component of CLT programs. Citizens usually take part in the governance of the CLT, contributing to decisions about development, land usage, and other community projects. Involvement empowers locals and fosters the development of robust, welcoming communities.
Mechanisms of Community Land Trusts:
Community land trusts are a sort of shared equity ownership that enables land to be purchased on behalf of a community using both public and private investments. The CLT owns the land in perpetuity. The residences in the neighbourhood can be purchased, but not the land they are built on. Instead, occupants execute low-cost ground leases, and extended-duration property agreements with the CLT that typically span 99 years.
Although CLT homeowners retain the same rights as regular homeowners, they are not permitted to sell the land on which their house is situated. For the term of the ground lease, they get full and exclusive use of the property in addition to the customary privacy rights that come with being a homeowner.
Residents of CLT are still permitted to sell their homes, even if there is a cap on resale profits to maintain the dwelling affordable for the next owner. Nonetheless, the CLT retains the authority to reject any transaction. It is forbidden for CLT residents to sublet their houses. Most CLT contracts contain an occupation clause requiring the property to be the owner’s principal residence. However, CLTs encourage wealth accumulation within families across multiple generations by enabling landowners to provide their children both the ownership and the lease of the property. The members of the CLT bear primary responsibility for its management. On CLT boards, however, there may occasionally be non-members or representatives from regional administrations.
Impact on Urban Housing Affordability:
Increased Availability of Affordable Housing
One of the most important techniques utilised by the Community Land Trust to reduce economic inequality is through increasing the supply of affordable housing. Community Land Trusts can help low-income individuals and families acquire affordable housing by owning and developing land. This enables everyone to have access to cheap, safe houses, irrespective of their financial condition.
Promoting Economic Development
Community Land Trusts can boost economic growth in low-income areas and contribute to economic growth and employment creation by providing chances for local enterprises and entrepreneurs.
Promoting Wealth Creation and Asset Building
Community Land Trust helps low-income individuals and families establish assets and increase their wealth, which helps to lessen economic inequality. CLTs make affordable housing available to people and provide homeownership opportunities, allowing them to build equity and safeguard their financial future.
Community Ownership and Decision-Making
Local communities can be strengthened by Community Land Trusts through promoting community ownership and decision-making. They can ensure that the needs and interests of their members are prioritised by involving them in governance and management.
Case Studies of Successful CLTs
L’écluse: Community Land Trust Brussels
This nine-home complex in Molenbeek, created by the Brussels-Capital Region Housing Fund, is continental Europe’s first occupied CLT. This building was constructed as part of an urban redevelopment initiative and adheres to low-carbon requirements that are now in effect throughout the Brussels Capital Region. The four-storied building stands out in contrast to the brick structures around it.
Communal spaces
Community Land Trust Brussels (CLTB) eeks to incorporate non-housing spaces into its projects. For example, a common laundry room for residents, a place for a local non-profit organisation, and a community garden.
Type of Targeted Population
Rather than attracting better-off people, Community Land Trust Brussel aims to create chances for local citizens to stay in their areas with better-condition dwellings. CLTB has chosen to target those struggling the most to find quality housing in the private market.
Resale Mechanism
The household recovers the money it invested in the purchase of the home, plus a 25% share of the rise in value since the acquisition. The approach is intended to assist households in selling their homes at conditions that may allow them to purchase property in the private market. CLTB receives 6% of the 75% remaining in the community to fund operational expenditures. The remainder is deducted from the sale price of the following household, allowing it to purchase property at a lesser cost. As a result, the formula limits property prices such that they remain affordable for other low-income families without requiring an additional subsidy.
Stadtbodenstiftung/ CLT Berlin
In Germany, land values and rents have risen significantly in the major cities, while populations are declining and home prices are falling in rural areas. As a federal political system, housing is a concern for both national and municipal governments, yet policies are not always consistent. Germany as a whole continues to emphasise private property and free-market housing solutions, whereas Berlin is experimenting with options such as common good, non-speculative, and community-driven housing. While there is extensive German experience with cooperative housing, city housing corporations, and other forms of non-profit housing, Berlin is the only emerging CLT model.
Housing affordability in Berlin is seen negatively by both community groups and municipal governments. Gentrification is becoming an increasingly serious issue, as is ongoing land and property speculation. This tendency to perceive current tenants as a barrier to more profitable private expansion, while rents continue to rise.
Since 2017, housing experts, community activists, researchers, alternative project developers, and local government representatives have met to establish the Stadtbodenstiftung, which is based on the CLT model. It is projected to make a substantial contribution to the provision of inexpensive housing as well as the preservation of accessible commercial and other areas in the long run by encouraging non-speculative forms of common ownership. The trust works with tenants to develop self-management strategies, stimulate input into the use of commercial areas, accept responsibility for active involvement, and enable solidarity structures.
Affordability Mechanism
The project likely involves rescuing older buildings in collaboration with their current resident groups. The land would be permanently taken off the market and controlled by the Stadtbodenstiftung CLT. A housing co-operative, for example, would take ownership of the buildings and manage a mix of residential and commercial spaces, with a long-term lease on the property.
Governance
The Stadtbodenstiftung exemplifies collaboration among the community, local administration, and supportive financial institutions. It includes nearly equal representation from residents and/or social space users, people who live or work in the neighbourhood, experts, supporters, and local government officials. Cooperatives, tenant groups, scholars, specialists, and neighbourhood activists have all collaborated on the model’s development.
Truro CLT
To gain a better grasp of the housing situation, Truro CLT launched a community-led survey, interviewing low-income workers from shop to shop and business to business in the city centre. In this survey, 89% of respondents stated they would prefer to live in Truro rather than commute every day because of high housing costs.
Truro CLT aspires to construct excellent, affordable homes for low-income workers who cannot afford to live in the area and are now housed outside of it in badly maintained, overpriced, and short-term insecure private sector rentals. The trust aims to develop environmentally sustainable buildings and restore historic structures to enhance energy efficiency, utilising local builders, contractors, and materials whenever possible. Truro CLT prioritises design aspects that focus on new and creative concepts paired with ease of access, revitalising the city centre and fostering community cohesiveness among Truro residents and businesses.
Affordability Mechanism
Truro CLT intends to own land and buildings, as well as contract with a law agency with input from the board on local legislation, the rent is based on the local housing allowance for the area. The CLT also intends to establish an emergency fund to cover rent for those experiencing substantial interruptions in their lives, as well as to house those who have nowhere to go due to extenuating circumstances.
Governance
Truro CLT has 61 members and 6 directors, with about 100 active participants in its public meetings and events. Its membership and leadership reflect Truro’s broad socioeconomic, professional, and ethnic backgrounds.
Advantages of CLTs
Long-Term Affordability
Long-term affordability is a major advantage of CLT homes. Through the imposition of resale limitations and the limitation of equity formulas, CLTs guarantee that homes remain affordable for future generations. By doing this, gentrification and community displacement are avoided.
Community Stewardship
Communities have control over the use and development of their land via Community Land Trusts. By letting residents prioritise local needs like affordable housing, green spaces, and community facilities, CLT projects improve community stewardship.
Sustainable Development
CLT initiatives advance sustainable development methods by conserving and using land effectively. As they preserve land for low-cost housing and community services, CLTs prevent urban sprawl while also safeguarding natural resources.
Community Building
Community Land Trust encourages residents to form strong social networks and engage with their communities. CLTs create dynamic and resilient communities by bringing people together around the same values and goals, where neighbours support and care for one another.
Flexibility and Adaptability
Over time, CLT efforts can change to accommodate the objectives and requirements of the community. CLTs are adaptable and can expand to meet new opportunities and difficulties, such as providing more affordable housing options, preserving green spaces, and assisting neighbourhood businesses.
Disadvantages of CLTs
Limited Equity Growth
While CLT homes provide long-term affordability, homeowners may see minimal equity accumulation compared to standard homeownership models. Resale restrictions and restricted appreciation potential can reduce the economic benefits of property.
Limited Availability
CLT programs are limited in size and scope. Due to the substantial financial, land acquisition, and organisational resources required for their establishment and management, CLTs may not be available in all areas or communities.
Governance Challenges
Managing a Community Land Trust requires navigating complicated relationships and governance structures among homeowners, the CLT organisation, and the community as a whole. Maintaining accountability, transparency, and community involvement may be challenging and time-consuming.
Administrative Burden
For the purpose of managing land holdings, leases, homeowner connections, and community engagement activities, CLT projects require robust administrative systems and procedures. CLT operations might have a significant administrative burden that calls for specialist staff and resources.
Regulatory Hurdles
Zoning regulations and other obstacles may limit the potential for land use and development in CLT programs. For CLT initiatives to be successful, collaborating with local governments and other stakeholders to remove legislative barriers is essential.
Community Land Trusts have demonstrated the need to pool resources from the community and cooperate to achieve sustained growth. By using local knowledge, promoting social cohesion, creating resilient economies, enhancing cooperation, and expanding their efforts, these organisations have the power to bring about long-lasting positive change. By maintaining the focus on sustainable development and recognizing and valuing the vital role that communities play in shaping their destiny. In general, Community Land Trusts provide a special remedy for the issue of affordable housing by enabling people to become long-term, sustainable landowners.
Reference list:
Taylor, K. (2022). Community Land Trust. [online] Investopedia.
Available at: https://www.investopedia.com/community-land-trust-5206374.
FasterCapital. (n.d.). Impact of Community Land Trust. [online]
Available at: https://fastercapital.com/startup-topic/Impact-of-Community-Land-Trust.html
CASE STUDY: CLT BRUSSELS. (n.d.). Available at: https://vb.nweurope.eu/media/12700/community-land-trust-brussels-case-study-1.pdf
CASE STUDY: TRURO CLT. (n.d.).
Available at: https://vb.nweurope.eu/media/12275/case_study_truro-clt.pdf.
CASE STUDY: STADTBODENSTIFTUNG/ CLT BERLIN. (n.d.).
Available at: https://vb.nweurope.eu/media/12699/case_study_berlin_sbs.pdf
FasterCapital. (n.d.). Impact of Community Land Trust. [online]
Available at: https://fastercapital.com/startup-topic/Impact-of-Community-Land-Trust.html.
