Propmodo Daily

By Franco Faraudo · Mar. 25, 2024

Greetings!

How is a program originally designed to protect Black sharecroppers from backlash for asserting their voting rights connected to the challenge of making housing more affordable? In today's email, we delve into this question, shedding light on the concept of community land trusts. We'll explore how these trusts, rooted in civil rights history, could play a pivotal role in improving housing affordability for thousands across the nation.

Also, traditional water pipe leak detection methods are inefficient and costly. But, new AI-powered systems are revolutionizing the process. Using sensors and audio analysis, AI can quickly detect problems, saving water, reducing costs, and preventing costly insurance claims. Learn more about how AI is deciphering the secret language of pipes to find water leaks before they become disasters.

Now, let's dig in!

Could Community Land Trusts Be the Key To Permanent Affordability?

One of the few things Americans seem to agree on these days is the need for more affordable housing. There's currently a shortage of more than 7 million affordable homes in the U.S. Despite the efforts of lawmakers on both sides of the aisle; progress has been agonizingly slow. Solutions have run the gamut: 3D-printed housing, modular construction, converting offices into affordable homes, and even mass-produced tiny homes have all been touted as faster ways to get needed homes built.

But one solution that hasn't seemed to get as much attention is now catching fire in several states: Community Land Trusts, or CLTs. These organizations have been around for decades, created to help residents stay in their communities by purchasing homes at a lower price due to their unique structure. Lately, CLTs have been popping up in areas devastated by natural disasters and in cities across the country looking to curb displacement.

The CLT model varies in its offerings, but the core structure remains consistent. These non-profit organizations acquire land, either with existing properties or for new construction. They then sell or rent out the homes built on the land. By retaining ownership of the land, CLTs significantly reduce the overall sale price or rental costs compared to similar homes in the area.

The first CLT emerged in the late 1960s to support Black sharecroppers in Georgia who lost their homes and jobs for exercising their right to vote. This pioneering effort sparked a national movement, and today, there are an estimated 300-450 CLTs across the country. These organizations have collectively provided tens of thousands of homeownership units and nearly 20,000 rental units nationwide. Vermont's Champlain Housing Trust exemplifies the model's potential, boasting around 565 ownership units and over 2,200 rental units. 

One of the most appealing aspects of the CLT model is its ability to preserve affordability for homeowners and renters, ensuring that housing units remain accessible in perpetuity. This year alone, community land trusts have garnered national attention. In Maui, Hawaii, residents of a neighborhood ravaged by wildfires are exploring the CLT model to rebuild following last summer's devastation, which caused widespread damage and claimed over 100 lives. Similarly, CLTs were established in Houston and the Florida Keys to provide housing solutions after these areas were severely impacted by hurricanes.

In Austin, Texas, where property values have soared in recent years, a CLT launched by the City Council in 2018 began accepting home purchase applications earlier this year—a move designed to combat gentrification. CLTs are gaining traction elsewhere as similar tools to address housing affordability, with Greensboro, North Carolina, moving forward with its own CLT plans. Meanwhile, in Atlanta, Georgia, a newly formed CLT recently purchased a small apartment building and will reduce tenant rents based on income.

But there are issues that could be holding back more of a widespread adoption of CLTs. One is the same issue that affordable housing nonprofits often face: getting funding. Community land trusts usually rely on a mix of public and private funding, including public grants, often the cornerstone of CLT funding. Funding sources can also come from philanthropic organizations and other nonprofit groups, ground lease fees from homeowners in a CLT, and through sales proceeds from homes sold within the land trust. 

The pool for potential homeowners is also limited. Buyers typically have to meet certain income requirements in order to purchase homes that are part of a CLT. For instance, Austin’s CLT requires that applicants be first-time home buyers with household income no more than 100 percent of the city’s Median Family Income. And when buying into most community land trusts, buyers often run into difficulties obtaining mortgages, and homeowners end up paying property taxes on land they don’t own.

Community land trusts are a proven model for creating and preserving affordable housing, something our country desperately needs more of. In cities hit hard by natural disasters or grappling with a depleted stock of affordable housing, CLTs are a valuable tool for creating more affordable homes and keeping residents from being priced out of their communities.

While CLTs offer these benefits, they do come with restrictions and requirements that may not suit everyone. The structure of community land trusts maintains affordability, yet there can also be downsides for owners. Despite these limits, CLTs remain good news for cities in need of more affordability options. They effectively build on other solutions and tools that are being implemented around the country.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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