Community Land Trust

What Are Community Land Trusts?

CLTs are a uniquely American invention, having several strains of influence on them, among those medieval common land patterns from Europe; Native American ideas of nonprivate land ownership; U.S. ideas on land banking, reform, and sharing; and progressive views on communal property or social property.

The basic idea of a community land trust is to factor out the usually inflationary value of land from the equation of impediments for people to buy a home. That is, the value of a home in the United States, at least most of the time, is equal to its land value and the property or structure on it. In most cases, until recently, land values in most parts of the country were increasing, either slowly or very rapidly. In areas where land was scarce or limited, land values increased, thus inflating the price of homes, often beyond the reach of the average American.

The structure or house on the property, whatever its original value, tends to remain stable or actually deflate or depreciate in value over time due to use, wear, and other factors. It is rare for the structure itself, unless of historic value or due to major renovations, to actually increase in value. Thus, in places where housing became or is unaffordable for poor and working people, it is almost always due to “abnormal” increases in the value of the land in that area.

The reality of this phenomenon has become apparent during the Great Recession that began in 2007. Housing prices began to drop, some precipitously, in various areas of the country. Most dramatically, this occurred in Las Vegas, Nevada; Phoenix, Arizona; and parts of Florida and California. The reason, of course, is that the rising values of homes prior to the Great Recession were an aberrant phenomenon, and the market demand couldn't sustain it. As more and more homes were built in the above areas and prices climbed higher and higher, there was simply no longer demand for them by buyers, and the housing market collapsed. Of course, there were many other complicating factors.

Until 2007, the need for CLTs in many parts of the country was enormous. Now, with inflationary housing (read land) pressures decreasing, the urgency of the affordable housing crisis has eased, [Page 71]too (at least from the price perspective). This does not mean that CLTs are no longer important or do not have a long-term role to play in resolving housing affordability issues in this country. For example, the foreclosure rates among CLT homeowners are about one eighth that of regular homeowners. Moreover, land trusts have increasingly gotten into other community endeavors, such as rental housing, vacant lot maintenance, community parks and gardens, and even nonprofit business ventures.

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