Frequently Asked Questions
What is a community land trust?
A community land trust (CLT) is a nonprofit organization that provides affordable homeownership opportunities to households unable to purchase homes through traditional methods. CLTs do this by separating the ownership of the land from the ownership of the house. This enables them to put land in a trust, making home buyers responsible only for the cost of the structure itself. CLT homeowners lease the land from the nonprofit for a modest fee.
Do CLT homeowners have limited rights to the land since they lease it from the land trust?
No. CLT homeowners can make whatever improvements to the land that they like, just as they can to the homes on that land.
How are CLT homes sold for less than market rate?
The CLT is able to reduce the price of a home by removing the cost of the land from the purchase price. Because land is such a substantial part of the cost of a home, by removing that cost, the CLT is able to sell the homes at below market rates
Why are CLTs considered permanently affordable?
In exchange for purchasing a home well below market rate, CLT homeowners agree to limit the amount of equity they can realize should they choose to sell the home.
Can CLT homeowners acquire equity?
Absolutely. When purchasing the house, homeowners agree to a resale formula that caps their equity at a reasonable resale rate. This means that even if property values in the area skyrocket, the home remains comparatively affordable forever.
Where will CLT homes be located?
Land Trust homes can include both specific developments in a neighborhood and scattered site programs where homeowners find a home they wish to purchase and this property is then brought into the CLT as part of the purchase process.
Aside from resale value, what are other limitations to CLTs?
There are none. Homeowners reap all the tax benefits of homeownership and can leave the home to their heirs or anyone else they designate.
Who controls the CLT?
CLT homeowners are part of the governing trust of the land. With Spokane CLT, homeowners will automatically become members of the organization and make up 1/3 of the board of directors, joining local housing advocates, city officials, and other interested community members.
Since CLTs serve people with less access to the traditional market, do they have higher foreclosure rates?
In fact, it’s just the opposite. In 2008, CLTs had a foreclosure rate of 0.52 percent, compared to the national average of 3.3 percent.
How popular are CLTs?
There are currently over 240 CLTs in 38 states. The Pacific Northwest is home to 30 CLTs and there are 19 in the state of Washington.
Don’t hesitate to call us at 509-279-2351 or fill out the form on this site’s “Contact Us” page. We look forward to hearing from you and would be happy to tell you more about this exciting affordable housing model.