A community land trust is a non-profit membership organization that owns and stewards land for the benefit of the community in order to preserve the affordability of housing on the land permanently. A community land trust separates the ownership of buildings from the ownership of the land underneath those buildings. Lexington CLT homeowners own their homes, but the community through the community land trust, retains ownership of the land. Homeowners lease the land from Lexington CLT for a nominal, monthly fee through a renewable 99-year ground lease. As a condition of the ground lease, homeowners agree to certain resale restrictions on their homes in order to protect its ongoing affordability and to preserve it as an affordable housing opportunity for future buyers. The structure of homeownership on a community land trust is a little different, but Lexington CLT homeowners enjoy the same essential benefits of homeownership.
Community Land Trusts provide access to land and housing to people who are otherwise denied access; increase long-term community control of neighborhood resources; empower residents through involvement and participation in the organization; and preserve the affordability of housing permanently.
Homeowners who decide to sell receive: (1) their down payment, (2) their equity (the amount paid towards the principal on their mortgage), and (3) a portion of the appreciation of the home’s value. This helps owners build wealth while ensuring other low-income buyers can purchase the home at an affordable price for generations.
Communities benefit by keeping these ownership homes affordable buyer after buyer – retaining the initial public investment dollars. Families who rent a home with the CLT are assured a quality construction home and affordable rent payments. In addition to homeownership and rental home opportunities, some CLTs maintain commercial or mixed-use buildings on CLT-owned land.