Cities Can Get Long-Term Affordable Housing Through Community Land Trusts, Lincoln Institute Report Says

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The CityÂ?CLT Partnership: Municipal Support for Community Land Trusts, recommends coordinated policies to stretch subsidies, shift stewardship, protect against foreclosures.

local governments may inadvertently structure CLT funding and oversight in ways that undermine the effectiveness of the very model they are attempting to support

Community land trusts provide long-term affordable housing, stretch subsidies and protect against foreclosure, according to The City–CLT Partnership: Municipal Support for Community Land Trusts, the latest Policy Focus Report published by the Lincoln Institute of Land Policy.

Cities can secure all these benefits by coordinating municipal policies to allow community land trusts to flourish, the report says. The danger is that "local governments may inadvertently structure CLT funding and oversight in ways that undermine the effectiveness of the very model they are attempting to support," said Lincoln Institute visiting fellow John Emmeus Davis, co-author of the report with Rick Jacobus, also a visiting fellow.

Community land trusts allow residents to purchase homes but not the land the housing sits on, which has the effect of reducing the price. Buyers agree to restrictions on resale. Historically most CLTs have been non-profit entities that have made long-term leasing arrangements without government assistance, but increasingly cities and counties have actively guided and sponsored their development. There are approximately 220 CLTs nationwide today; more information on CLTs is in this Lincoln Institute survey.

"Community land trusts are attractive for those promoting homeownership for lower-income families, and they are an efficient use of public funds for affordable housing," said Roz Greenstein, senior fellow and chair of the Department of Economic and Community Development at the Lincoln Institute. "The control on resale means that affordability lasts for generations, after a single initial investment. And administrative responsibilities lie with the CLT, not the city, to be stewards of this housing."

"CLTs also become a 'backstop' for lower-income owners at risk for mortgage foreclosure and have dramatically lower rates of foreclosure compared to market-rate homes," Greenstein said.

The City–CLT Partnership: Municipal Support for Community Land Trusts, by John Emmeus Davis and Rick Jacobus (Cambridge, Mass.: Lincoln Institute of Land Policy, 2008 / 40 pages / Paper / $15.00 / ISBN 978-1-55844-181-1) examines best practices in municipal support for CLTs. Local governments may offer administrative or financial support during the planning and startup phase, followed by donations of city-owned land and grants or low-interest loans for developing and financing projects, for example. They may help a CLT acquire and preserve housing provided by private developers who are complying with inclusionary zoning, density bonuses, and other mandates or concessions. As the CLT builds its portfolio, municipalities may provide grants to help support its operations. Finally, local jurisdictions may assist CLTs by revising their tax assessment practices to ensure fair treatment of resale-restricted homes built on their lands.

Based on a review of three dozen municipal programs and in-depth interviews with local officials and CLT practitioners, this report describes the mechanisms and methods that cities across the country are using to structure their investment in CLT startups, projects, and operations. In addition to describing the full range of options for providing municipal support, the report highlights specific model practices for rendering that assistance. These practices have the most potential to balance the interests of all parties by:

  • Protecting and sustaining the public's investment in affordable housing;
  • Expanding and preserving access to homeownership for households excluded from the market;
  • Stabilizing neighborhoods buffeted by cycles of disinvestment or reinvestment;
  • Ensuring accountability to funders, taxpayers, and the communities served by the CLT.

The report concludes with a discussion of three emerging trends: shifts in the city's roles from supporter to instigator, and from participant to governor; and a deepening of the CLT's primary role as a steward of affordable housing created with municipal assistance. While posing new challenges, these changes also present new opportunities for tomorrow's city–CLT partnerships.

The publication of the report was announced today in front of new homes under construction along Dudley Street that are part of the Dudley Street Neighborhood Initiative in Roxbury, Mass., Boston’s premiere community land trust. The City of Boston donated the land for the new townhouse-style homes, part of over 200 that will be added to the community land trust operated by Dudley Neighbors Inc, a subsidiary of the Dudley Street Neighborhood Initiative. The process was identified as an example of best practices in the report.

About the Authors:

John Emmeus Davis is a partner in Burlington Associates in Community Development, which he cofounded in 1993. He previously served as the housing director and enterprise community coordinator for the City of Burlington, Vermont. He is a visiting fellow at the Lincoln Institute of Land Policy.

Rick Jacobus has 15 years of experience in housing and community development. He joined Burlington Associates in Community Development as a partner in 2004, assisting in the development of community land trusts and inclusionary housing programs on the West Coast. He is also a visiting fellow of the Lincoln Institute.

About the Lincoln Institute:

Founded in 1974, the Lincoln Institute of Land Policy is a leading resource for key issues concerning the use, regulation, and taxation of land. The Lincoln Institute conducts research, holds conferences, provides education and training, undertakes policy evaluations, and publishes books and reports to improve the quality of public debate and decisions in land policy.

Copies of the report can be downloaded at http://www.lincolninst.edu. Print copies are available by contacting Anthony Flint at Anthony.flint @ lincolninst.edu.

CONTACT:

Anthony Flint

Director of Public Affairs

Lincoln Institute of Land Policy

617-661-3016 x116

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