Frequently Asked Questions About Community Land Trusts
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Community Land Trusts (CLTs) are nonprofit organizations that acquire and hold land for the collective benefit of the community. The CLT owns the land and can develop housing on it or contract others to develop on it. The homeowner owns the building on the land but leases the land itself from the CLT through a renewable long-term lease (usually 99 years). Residents can resell, though there are guidelines on who can purchase the home and at what cost. This model helps to keep housing costs permanently attainable for low and moderate income residents.
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By owning the land and leasing it under long-term, renewable leases, CLTs can keep housing costs contained. Even as surrounding property values increase, residents can maintain an affordable mortgage.
Although community land trusts provide long-term affordability through many different strategies, the primary tool is through a shared-equity resale model. This model balances a return on investment for the homeowner (at sale) by capturing a portion of market appreciation which the seller receives. The remaining appreciation remains "in the home" and is passed on to subsequent home buyers through a restricted price which enables a single home to serve multiple households over generations and remain affordable to both current homeowners and future buyers.
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Yes! Community Land Trust homeowners are able to build wealth through the sale of their home. The CLT utilizes a resale formula so the next income-qualified buyer can still buy an attainably-priced home, and not have to worry that rapidly increasing values among nearby properties may increase the cost of the CLT home. CLT homeowners build equity the same as traditional homeowners by paying down their mortgage and making improvements to their homes.
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Yes. Community Land Trusts work with homeowners to sell their home to a qualified household, when they are ready to sell. Sellers are typically able to forego hiring a Realtor.
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No. Income eligibility is determined at the time of purchase.
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Yes, unless there is a restriction tied to a specific funding source. The 99-year ground lease, which conveys ownership of the home, can be transferred to heirs. Heirs include any children, or anyone living in the home for more than six months such as a domestic partner, regardless of their income.
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Most CLT homeowners in Ohio earn 60-110% of the area's median income. They are from all walks of life and careers that contribute to their communities in a variety of ways - such as bus drivers, artists, healthcare employees, teachers, warehouse coordinators, electricians, and pharmacy coordinators. CLT homeowners represent a variety of household types: some are married, some have kids, others are single without children, or live with other family members, partners, friends, or roommates. They are people of all ages, races, genders, and levels of ability.
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When a CLT homeowner is ready to sell their home, the resale price (and thus asset appreciation) is set through a formula, which may prevent the homeowner from accessing the entire increase value of their home. CLT homeowners must sell to buyers who meet income qualifications, which also inform the final sales price. However, CLTs provide homeownership opportunities to buyers who otherwise may not purchase a home. CLTs also stabilize housing costs by removing escalating property values from the equation. Lastly, CLT homeowners build equity through mortgage payments and home improvements.
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