Municipal Support Is Significant to Capacity of Residential Community Land Trusts

A study published in Housing Policy Debate, “Affordable Housing through Community Land Trusts (CLTs): Examining Factors Associated with the Number of Units in CLTs,” assesses how the number of units operated by a residential community land trust (CLT) is associated with the CLT’s characteristics, community socioeconomic factors, and regulatory and political landscape. A community land trust (CLT) is a shared-equity housing model, in which a participating nonprofit, local government, or municipality owns land where units are sold or leased at below-market prices. CLTs serve as a tool for preserving affordable housing, maintaining community stability, preventing displacement, and combating gentrification. The study calls attention to the role of municipal support in the capacity of CLTs. 

The study drew information about CLTs from multiple data sources, including the Center for Community Land Trust Innovation, Candid, the Schumacher Center for a New Economics, and individual CLTs’ websites and reports. To examine CLT communities’ socioeconomic features, the study used American Community Survey (ACS) estimates. To evaluate the regulatory and political landscape, the study incorporated data from Grounded Solution’s national survey of inclusionary housing programs in the US (2018-2020) and the Center for Community Progress’s national land banks database.

The number of units operated by a CLT had the most statistically significant relationship with its organization’s characteristics. CLTs that are public, have more years of service and have rental units that are associated with a larger number of units. Public CLTs are those operated or initiated by a local government, which means public resources are more likely available. CLTs with more years of service likely possess the institutional knowledge and capacity to operate a greater number of units. Operation of rental units implies that a CLT is oriented towards serving low-income households, for which renting is a more feasible alternative. Since some CLTs operate rental units to meet lending requirements, the study recommends further research to better understand the interaction between underwriting practices, CLT funding, and rental housing. While CLTs exist in a wide range of communities, CLTs located in smaller to mid-size cities and with growing populations were likely to operate a greater number of units. 

In regard to regulatory and political landscapes, CLTs within incorporated areas tended to have a greater number of units. In addition, CLTs in areas with inclusionary housing policies had more units on average, but the relationship was not strong enough for statistical significance. The study recommends further research into how inclusionary housing policy and CLTs interact. 

The study recommends that policymakers support the operational capacity of CLTs in several ways, including through community grants, land banking programs, or tax breaks. Land banking programs, where a public organization acquires property that is otherwise abandoned, left vacant, tax foreclosed, or delinquent, is a way to grant land to CLTs. Community grants could make it more feasible for CLTs to expand on their existing operating capacity. Exempting CLTs from property tax, such as a measure already in place with California Senate Bill 1056, could further ease CLTs’ financing burdens.

Read the article here.