Community Land Trust:
And How to Set one up
A community land trust is a nonprofit corporation which acquires and manages land on behalf of the residents of a place-based community, while preserving affordability and preventing foreclosures for any housing located upon its land.
The first attempt to establish a CLT in the U.S. was founded with the purpose of helping African-American farmers in the rural South to gain access to farmland and to work it with security.The community land trust (CLT) is an equitable and sustainable model of affordable housing and community development that has slowly spread throughout the United States during the past 40 years.
Since 1992, the defining features of the CLT model in the United States have been enshrined in federal law (Section 212, Housing and Community Development Act of 1992). There is considerable variation among the hundreds of organizations that call themselves a community land trust, but ten key features are to be found in most of them.
Nonprofit, tax-exempt corporation - A community land trust is an independent, not-for-profit corporation that is legally chartered in the state in which it is located. Most CLTs are started from scratch, but some are grafted onto existing nonprofit corporations. Most CLTs target their activities and resources toward charitable activities like providing housing for low-income people and redeveloping blighted neighborhoods, making them eligible to receive 501(c)(3) designation from the IRS.
Dual ownership - A nonprofit corporation (the CLT) acquires multiple parcels of land throughout a targeted geographic area with the intention of retaining ownership of these parcels forever. Any building already located on the land or later constructed on the land is sold off to an individual homeowner, a cooperative housing corporation, a nonprofit developer of rental housing, or some other nonprofit, governmental, or for-profit entity.
Leased land - Although CLTs intend never to resell their land, they provide for the exclusive use of their land by the owners of any buildings located thereon. Parcels of land are conveyed to individual homeowners (or to the owners of other types of residential or commercial structures) through long-term ground leases. This two-party contract between the landowner (the CLT) and a building’s owner protects the latter’s interests in security, privacy, legacy, and equity, while enforcing the CLT’s interests in preserving the appropriate use, the structural integrity, and the continuing affordability of any buildings located upon its land.
Perpetual affordability - The CLT retains an option to repurchase any residential (or commercial) structures located upon its land, should their owners ever choose to sell. The resale price is set by a formula contained in the ground lease that is designed to give present homeowners a fair return on their investment, while giving future homebuyers fair access to housing at an affordable price. By design and by intent, the CLT is committed to preserving the affordability of housing (and other structures) – one owner after another, one generation after another, in perpetuity.
Perpetual responsibility - The CLT does not disappear once a building is sold. As owner of the underlying land and as owner of an option to re-purchase any buildings located on its land, the CLT has an abiding interest in what happens to these structures and to the people who occupy them. The ground lease requires owner-occupancy and responsible use of the premises. Should buildings become a hazard, the ground lease gives the CLT the right to step in and force repairs. Should property owners default on their mortgages, the ground lease gives the CLT the right to step in and cure the default, forestalling foreclosure. The CLT remains a party to the deal, safeguarding the structural integrity of the buildings and the residential security of the occupants.
Community base - The CLT operates within the physical boundaries of a targeted locality. It is guided by – and accountable to – the people who call this locale their home. Any adult who resides on the CLT’s land and any adult who resides within the area deemed by the CLT to be its “community” can be-come a voting member of the CLT. This “community” may encompass a single neighborhood, multiple neighborhoods, or, in some cases, an entire town, city, or county.
Resident control - Two-thirds of a CLT’s board of directors are nominated by, elected by, and composed of people who either live on the CLT’s land or people who re-side within the CLT’s targeted “community” but do not live on the CLT’s land.
Tripartite governance - The board of directors of the "classic" CLT is composed of three parts, each containing an equal number of seats. One third of the board represents the interests of people who lease land from the CLT (“leaseholder representatives”). One third represents the interests of residents from the surrounding “community” who do not lease CLT land (“general representatives”). One third is made up of public officials, local funders, nonprofit providers of housing or social services, and other individuals presumed to speak for the public interest ("public representatives"). Control of the CLT’s board is diffused and balanced to ensure that all interests are heard but no interest is predominant.
Expansionist acquisition - CLTs are not focused on a single project located on a single parcel of land. They are committed to an active acquisition and development program, aimed at expanding the CLT’s holdings of land and increasing the supply of affordable housing (and other types of buildings) under the CLT’s stewardship. A CLT’s holdings are seldom concentrated in one corner of a community. They tend, instead, to be scattered throughout the CLT’s service area, indistinguishable from other owner occupied housing in the same neighborhood.
Flexible development - There is enormous variability in the types of projects that CLTs pursue and in the roles they play in developing them. Many CLTs do development with their own staff. Others delegate development to nonprofit or for-profit partners, confining their own efforts to assembling land and preserving the affordability of any structures located upon it. Some CLTs focus on a single type and tenure of housing, like detached, owner-occupied houses. Other CLTs take full advantage of the model’s unique flexibility. They develop housing of many types and tenures or they focus more broadly on comprehensive community development, undertaking a diverse array of residential and commercial projects. CLTs around the country have constructed (or acquired, rehabilitated, and resold) single-family homes, duplexes, condos, co-ops, SROs, multi-unit apartment buildings, and mobile home parks. CLTs have created facilities for neighborhood businesses, nonprofit organizations, and social service agencies. CLTs have provided sites for community gardens and vest-pocket parks. Land is the common ingredient, linking them all. The CLT is the social thread, connecting them all.
Community Land Trust Model
How to set one up
1. Decide on the board of directors, these people are called the trustees. They are they people who are entrusted with making sure that the land is used in the manner the creator of the trust lays out in the mission statement.
2. Create a mission statement. This is a document that lays out the purpose of the trust and the specific uses that the creator of the trust intends for the land.
3. Apply to the IRS for non-profit status, while the trust may benefit people financially and even pay the trustees, the entity itself may not keep the money it earns.
4. File a creation of trust writ with your local land or assayer's office. This will make the trust official.
A community land trust typically acquires and holds land, and sells any residential or commercial buildings. Two types of land trusts exist. A conversation trust acquires and protects open spaces and agricultural land and a community land trust focuses on housings opportunities and community development. Many land trusts need to develop diverse funding sources to support their projects. If you want to develop a land trust in your area, you should focus on how to get funding to set up a community land trust and how to continue its operations.
1. Attend local foundation and nonprofit events in your region to network with potential funding sources for your project. When you attend mixers or other events, speak with others about your project and collect contact information.
2. Search for potential federal funding sources on the federal grants database, grants.gov, which provides grant listings for various government agencies, including the Department of Housing and Urban Development. Depending on what kind of land trust you want to set up, you may use search keywords, such as low-income housing, land trust, housing, community development.
3. Search for funding from private foundations and corporate foundations through the Foundation Center website, foundationcenter.org. Although this database is subscription-based, you may request a free, 24-hour trial subscription to determine if the database will help you find potential funding sources. When searching, you may use the type of support, name of the foundation or keyword searches to find potential funding opportunities. You may use searches like community land trust, housing, homeownership, land preservation, low-income housing and similar terms based on the purpose of your land trust.
4. Gather information about the cost of land in your area, as well as income levels and housing statistics. This can help you focus your efforts on specific areas of need within your community. You may consider gathering data from your state's Department of Housing and Urban Development or other applicable community organizations.
5. Narrow down your list of funding sources that support housing, community development or similar programs and make a list of requirements for each application. This will help you develop your grant proposal. Most grant proposals require a cover sheet, statement about the history and accomplishments of an organization, need statement and project summary, budget information and applicable attachments (such as a non-profit determination letter from the Internal Revenue Service and the previous year's tax return.)
I really hope this was helpful...Masalaama
Marcus "Ishma'il Abdul Haq" Allgood
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