[edit]What is the "Third Way"?

Currently, most land is owned and controlled 1 of 2 ways:

  • publicly - by the government directly, including public housing,
  • privately - by a homeowner, bank, or corporation,

But, Wall St is exploiting us and our government is enforcing it. Research and Theory#U.S. Land & Housing Statistics. Therefore, the movement this Spring seeks a Third Way: (3) community control over land, which we imagine as a local model of open direct democracy with the purpose of ensuring human needs in the community are met before profits in all future land use and development decisions.

Land and Housing: When a person traditionally "buys a home," they are actually buying 2 things: a parcel of land and the house that sits on it. The following examples legally separate the ownership of the land and "whatever the use is on top of the land," including a home, farm, factory, park, school, etc. to enable long-term community stewardship of local land-related resources. The land is essentially "decommodified" once you "bring democracy home" like this and we imagine can serve as a basis for long-term community stability & inclusive development.

The examples fall into two categories,

  • third way alternative structures (legal tools capable of democratizing landownership today) and
  • policy that supports or adopts the third way (broadening the impact).

Find tools for measuring variations of both categories on the Research and Theory page.

[edit]Alternative Structures

There are many examples of "Third Way" alternative structures that are already available tools for transforming land relationships in the United States at the local level. These alternative structures share in common two features:

  • (1) an organizational form for local direct democratic decision-making by which communities and residents may be empowered to Participate fully in issues of land use & redevelopment. This includes housing, but it also includes farm land, commercial space, and common space within a set geographical boundary. And,
  • (2) the decommodification of land -- that is, its removal from the speculative real estate market (because the community maintains long-term ownership as "stewards of the land").

In taking the land off the market & putting it into the hands of the community directly, those most-impacted are empowered to act to ensure their needs are met first, including deepening affordability of housing, ensuring Universal and Equitable Use of existing housing stock, as well as increased stability, Peace and Dignity for us all in our community &, more broadly, in the economy.


[edit]Community Land Trusts

[edit]What are Community Land Trusts?

Community land trusts (CLTs) provide a potential Third Way model for taking land off the market for use by the community. The "Classic" CLT holds land for the benefit of the community and sells the housing to a homeowner or housing cooperative (or lease-to-own). This enables the community to maintain lower costs of this housing over the long-term, avoiding speculative fluctuations (due to gentrification or disinvestment) and retaining subsidies past initial investments.


[edit]The basic structure of the CLT
  • a non-profit tax-exempt (501c3) organization
  • an open place-based membership
    • serving a single neighborhood, several neighborhoods, an entire city, an entire county, or, in a few cases, a multi-county region.
    • consisting of 2 membership groups: 1. leaseholders and 2. "other members of the community within the CLT's geographic area"
  • a board whose members represent 1/3 leaseholders, 1/3 the other community-based membership group, and 1/3 "general public" representatives, often this category of board members will include experts, local funders, government representatives, & other interested local non-profits (churches, schools, etc.).

Sample Organizational Documents & Guides:


[edit]The Ground Lease: Lasting Community Ties

Ground leases are central to the homeowners relationship with the CLT community. It continues to exist even if the house is destroyed and the CLT dissolves!

It is through a ground lease that a CLT executes its role in monitoring the resale of buildings on the land to potential homeowners or housing cooperatives. In doing so, the CLT enforces restrictions on profit, owner occupancy, and buyer eligibility (often related to income targets and other priorities), which can all be tailored to achieve the CLT's goals. The CLT accomplishes this via a GROUND LEASE (land lease). A typical ground lease is:

  • 99 years and renewable at the option of the homeowner or cooperative
  • Inheritable


The lease is the key to connecting the new owner to the community through their membership in the local CLT. The CLT then offers a range of post-purchase supports. . . Further, the lease serves to keep the house permanently affordable by including a resale formula that determines the home’s sale price and gives the family a share of the increase in the home’s value when they decide to sell the home. In this way, the investment made in the home to make it affordable to the first family, remains with the home to make it affordable to subsequent families as well. - Building Affordable Housing From the Ground Up, Cara Letofsky

Additional Resources on Ground Leases :


[edit]A Human Rights Model for Community Land Trusts?

Not all CLTs are created equal! This extremely versatile legal organizing tool can be a lot of things to a lot of very different people with different values & objectives. These differences can be quite noticeably reflected directly into the structure of a CLT: in its governance, policies and programs.

Therefore, it is often not as simple as "a CLT."

What then would a Human Rights-based Community Land Trust look like? What would be required of a CLT's structure, policies, and programs to ensure that such fundamental principles as Universality, Equity, Participation & Security of Tenure (a.k.a. Peace & Dignity) are the scaffolding of your CLT?



(1) Community-Based Membership Structure

(2) Policies & Programs designed to Eliminate Discrimination & Prejudice

(3) Policies Tailored to Meet Community Need (2 categories)

* Processes to Prioritize Equitable Use of Homes

* Mechanisms to Lower Financial Barriers to Access

(4) Post Move-In Support for Occupants



(1) Community-Based Membership Structure

2 membership classes (rights to elect & remove board members, amend bylaws…instead of dues, may use other “commitment” requirement)

  • Leaseholders
  • General membership: open to all other community members in CLT’s geographic area

3 categories of board members (oversight of CLT staff, finances, & mission/policy…)

  • Leaseholder representatives
  • General membership representatives
  • “Public” representatives: jointly elected by both classes & can have specific requirements, such as “grassroots representatives of underrepresented groups” in the community with known barriers to housing (can even define: low-income, mentally ill, older adults, homeless, formerly incarcerated, minority groups)

(2) Policies & Programs designed to Eliminate Discrimination & Prejudice

  • Anti-Discrimination Policy
  • Resident Selection Criteria & Application Process (see below)
  • Transparent Monitoring & Evaluation of Access Issues
  • Programs to address known Access Barriers

(3) Policies Tailored to Meet Community Need (2 categories)

Processes to Prioritize Equitable Use of Homes

  • Use of a regular (e.g. annual) Needs Assessment
  • Active Membership Campaigns to increase inclusive community representation & participation
  • Application Process & Resident Selection Criteria may be tailored to meet CLT’s goals of meeting assessed need by identifying “priorities” for, for example, local inhabitants, unmet need…
  • Enforcement of Anti-Speculation Provisions of Ground Lease (e.g. occupancy regulations, resale restrictions).

Mechanisms to Lower Financial Barriers

  • Resale Formula restricting profits, tailored to preserve affordability
  • CLTs may include Lease-to-Own & Multi-Family Cooperative options, in addition to single-family homes.
  • Sweat Equity may be used to lower upfront & maintenance costs. It may also be incorporated into other repayment agreements between the HO & CLT.
  • Subsidy Pools (or “community equity”) can reallocate subsidies to adjust prices according to need
  • Reserve Funds may also be used, in addition to sweat equity, to help with capital improvements
  • The use of a Progressive Income-Based Ground Lease Fee structure may be used to help capitalize a reserve fund, subsidy pool and other similar programs that lower financial barriers for those that need it. Instead of the typical “flat” fee of ~$25/month, an income-based model would require higher contributions from those who can afford it (in order to subsidize others) and lower fees (even sweat equity options) for those that cannot.

(4) Post Move-In Support for Occupants

  • Commitment to Helping Occupants with Financial Hardships with programs that: provide counseling services (work with lenders to get modifications/forbearances, support with resolving delinquencies including the option of repayment agreements for arrearages, 0% delinquency loans or grants for one-time defaults.
  • Worst-case scenario help to find Alternative Accommodations within CLT area or to needs, prior to displacement
  • Agreement between CLT & a Homeowner in ground lease that CLT has the Right to Intervene in cases of foreclosure and default (e.g. right to cure default, right to purchase if default, right to buyback after foreclosure)
  • No Punitive Fees or programs


  1. Not Inclusive Membership, Not Membership-Run, Inadequate Technical Assistance & Membership Development
  2. No Needs Assessment, Evaluation of Access Issues
  3. No housing options for Very Low Income residents, Inadequate mechanisms for Lowering Financial Barriers


[edit]Why CLTs?


  • Prohibits speculative exploitation
  • Establishes resale restrictions to ensure long-term community goals are central to future land use decisions (not market values)
  • May prioritize re-allocation of acquired housing based on need or other community purposes
  • May use sweat equity, subsidy pooling techniques and lease-to-own options to lower financial barriers
  • Members of the community -- both leaseholders and others -- may join the CLT and participate directly in the decision-making processes at all stages of planning, administration, & evaluation.
  • Can stabilize residents and communities through long-term community ownership of the land & mechanisms for protecting leaseholders during periods of economic hardship.
  • May be tailored to provide local jobs...


  • Not all CLTs aim to hold land for the "classic" purposes of deepening affordability and empowering the community to control future land uses. For instance, a minority of CLTs do not have a membership to which its accountable.
  • Without a partnership with the municipality and existing community development partners, it will be more difficult to obtain the necessary resources to maintain adequate housing (fund repairs) and deep affordability.
  • A high-level of community engagement may require an investment in technical assistance and training...

Other Measurements of CLTs:


[edit]Are CLTs Effective at Preventing Foreclosure?

Yes, according to a 2010 national survey completed by the Lincoln Institute of Land Policy & Vanderbilt University in partnership with the National Community Land Trust Network, see the Press Release & the Full Report.

Also see: What Foreclosure Crisis? Community Land Trusts Offer Secure Homeownership, by Van Temple (2008).


[edit]Are CLTs Effective at Creating & Preserving Affordability?

The initial affordability of a CLT home or building is limited by its total cost minus any subsidies. Donated deeds, sweat equity and lease-to-own models all lower initial costs. Use of housing cooperatives, where applicable, may also help lower individual costs. Limited subsidies acquired by the CLT (as opposed to the homeowner as an individual) may be retained for the benefit of subsequent residents, because resale formulas prohibit the reaping of windfall profits by owners.

The CLT may reallocate subsidies to adjust prices through its repurchasing at a formula-based price and reselling it at a lower price to a subsequent owner using funds from “subsidy pooling," where available.

[edit]Other Frequently Asked Questions

[edit]Getting Started

[edit]How-To Manuals & Guides


[edit]Building a CLT from the Ground Up: A Start-Up Checklist
Key decisions Before Incorporation
  • Beneficiaries. Who will the CLT serve?
  • Geographic service area. Where will the CLT operate?
  • Development. What kinds of housing or other structures will be developed on the CLT’s land, and what roles will the CLT play in the development process?
  • Governance. How will the governing board be structured and selected? Will the CLT have membership? If so, what role(s) will the members play?
  • Resources. Where will the CLT find funding to pay for projects and operations?
Essential Tasks Before Incorporation
  • Assign responsibility for key decisions about CLT structure, service area, beneficiaries, and activities.*
  • Begin outreach to community residents and key stakeholders.
  • Evaluate housing market conditions, optimal prices, and likely demand for units serving the target population.
  • Estimate the availability and sufficiency of public and private resources for land acquisition, housing development, housing subsidies, and CLT operations.
  • Conduct legal research as needed.
  • Prepare documents establishing the CLT and institutionalizing its structure and governance.
Formative Tasks After Incorporation
  • Seat and orient the CLT’s first board of directors.
  • Design the ground lease and resale formula.
  • Create an outreach plan and materials for building CLT membership and for educating the broader community.
  • Develop and implement homebuyer selection and orientation programs.
  • Create a three-year plan for bringing the CLT’s portfolio to scale, including a staffing plan, operating budget, policies and procedures, and housing development goals.
  • Apply for 501(c)(3) designation as a tax-exempt charitable organization.
  • Review municipal and state programs for compatibility with the CLT model and negotiate modifications to expand access to funding sources.
  • Negotiate property tax treatment for the CLT’s resale-restricted, owner-occupied housing with the local assessor.
  • Build relationships with private financial institutions in preparation for mortgaging of CLT housing.
  • Develop job descriptions for staff and complete a hiring process.



[edit]Needs Assessment, Monitoring & Evaluating Access Issues
[edit]Funding, Resale Restrictions & Subsidy Retention

Resale Formulas: Most resale formulas are designed to allow homeowners to recoup their original downpayment, to recover any payments that have gone toward the amortization of their mortgage, and to realize a reasonable return. What’s considered “reasonable” is much debated and varied.

Four generic formulas for setting resale price:

  • Indexed formulas, which link upward adjustments in the original purchase price of a house, condominium, or co-op shares to changes in a specified index.
  • Itemized formulas, which adjust the original purchase price by adding (or subtracting) specific factors that increase (or decrease) the value of the home.
  • Appraisal-based formulas, which upwardly adjust the original purchase price by giving the owner a specified percentage of market appreciation, as measured by appraisals that are done at the time of purchase and at the time of resale.
  • Mortgage-based formulas, which determine the resale price by calculating the maximum amount of mortgage financing that a homebuyer at a targeted level of income can afford at current interest rates – current, that is, on the day the home is offered for resale.

Resale Process: Sometimes sellers of shared equity homes find their own purchasers. More often, a third party (such as the CLT or LEC) maintains waiting lists of eligible purchasers. The third party may also have the right to choose a specific buyer for each property offered for sale or maintain the right to purchase the property themselves, reselling soon after to a buyer of their choice.

[edit]Rental, Cooperatives, & Mobile Homes on CLT Land


[edit]Sweat Equity & Rent-to-Own

"Sweat equity" allows residents to help with construction or rehabilitation of a building as a way of reducing the housing costs or gaining credit for a down payment on the home. Often these efforts include the neighborhood or a broader group of volunteers.


[edit]Buyer Selection Processes & Priorities

Example Homeowner Selection Criteria:


[edit]Operating Considerations

Roles & Responsibilities:

Ongoing Support & Oversight:

[edit]Examples of Community Land Trusts

[edit]Cooper Square Community Land Trust
  • Lower East Side, New York City
  • The 303 housing units are in multifamily buildings, most of them attached and within a three-block area
  • The buildings are owned and managed by a mutual housing association


[edit]Champlain Housing Trust


[edit]Jubilee Homes of Syracuse
  • Syracuse, NY


[edit]NY State CLTs
[edit]Mapleton Mobile Home Park, Thistle CLT Partnership
  • Use of gov't bond financing by CLT to purchase mobile home park upon request of residents
  • Serves very low income families

[edit]Housing Cooperatives

[edit]What is a Housing Cooperative?

A member of a housing cooperative is not a traditional renter or owner of a home; instead, they own a "share" along with other members that own equal "shares" of the owning entity, a non-profit. Each share grants occupancy rights to a specific home (suite, apartment) within the building and a vote in the decision-making related to the cooperatively owned entity. Most often, each household that holds a share has one vote.


  • Immediate Affordability: Monthly coop fees are usually much lower than market rent
  • Coop members may deduct mortgage interest and property taxes from income taxes like other homeowners
  • Coop members can also qualify for Section 8 rental subsidy to support their monthly housing costs


  • Difficulty in maintaining long-term affordability without use of land trust to enforce


[edit]The Different Forms of Cooperative Ownership
[edit]Mutual Housing Associations
  • Non-profit leases housing to residents.
  • Most residents have rights of occupancy, limitations on equity, and a balance of benefits
  • Membership consists of any residents that pay the association's dues & become tenant when apartment is available.
  • Board includes residents, future residents, public and private sector representatives.
  • Structured, operated, regulated, financed, and taxed as rental housing.
  • Mission is to expand to decommodify more & more housing.
  • Useful for owning scattered sites.


[edit]Limited Equity & No Equity Coops

Basic Features of LEC:

  • Collective ownership of a building by tenants, usually as a non-profit.
  • Resale restrictions and often maximum income limits for new purchasers
  • Shares are usually inheritable
  • Subject housing may be an apartment building, single-family, mobile home park etc.
  • Below-market interest rate mortgage loans, grants, tax abatements
  • Government or foundations may help subsidize development costs. 1949 Housing Act Section 213 allowed co-ops to take advantage of FHA mortgage insurance.
  • Board of directors elected by the member-owners based on ‘one member, one vote,’ where each unit is one membership
  • Combining with CLT can prevent loss of affordability if LEC is tempted to amend by-laws and convert to market rate

Basic Features of No-EC:

  • Cooperative leases the building (like renting) from non-profit
  • Purchase price, like rental security deposit, is reimbursed upon selling
  • If building comes up for sale, co-op sometimes purchases and turns into LEC

With limited equity, the co-op has rules regarding pricing of shares when sold. A sub-set of the limited equity model is the no-equity model, which looks very much like renting, with a very low purchase price (comparable to a rental security deposit) and a monthly fee in lieu of rent. When selling, all that is recovered is that very low purchase price.

In a limited-equity housing cooperative there are restrictions on what outgoing members can get from sale of their shares. These are usually imposed because the co-op's members benefit from below-market interest rate mortgage loans, grants, real estate tax abatement, or other features that make the housing more affordable. Limited equity cooperatives sometimes also have maximum income limits for new members. These restrictions can usually be found in the cooperative's bylaws or lending agreements.

In a leasing cooperative (zero equity), the cooperative leases the property from an outside investor (often a nonprofit corporation, such as a CLT, that is set up specifically for this purpose). Since the cooperative corporation does not own any real estate, the cooperative is not in a position to accumulate equity (just as a renter doesn't build any equity). However, the cooperative is often in a position to buy the property if it comes up for sale later and convert to a market rate or limited-equity cooperative. Some leasing cooperatives allow outgoing members to take with them at least part of their share of the cash reserves built up by the cooperative while they were in occupancy.

[edit]Getting Started

[edit]Examples of Housing Cooperatives

Tenant Interim Lease Program, NYC, Limited Equity Cooperative (LEC):

  • Equitable Use. Facilitated transformation of landlord abandoned or foreclosed buildings into LECs
  • Initial Affordability & City Support. City-funded rehabilitation, compensated sweat equity contributions, no mortgage or debt due for new co-ops. Rental payment assistance to those paying more than 30 percent of their income for rent if earning less than 50 percent Area Median Income (AMI).
  • Technical assistance and leadership training for new tenants.
  • Limited long-term Affordability: No resale restrictions. Struggling to afford needed repairs (arrears of taxes).

Cooper Square, NYC, Mutual Housing Association (MHA) on top of a CLT:

  • Initial Affordability: Community & political organizing and local governmental support drastically reduced land & financing costs
  • The CLT preserves the affordability of the MHA homes.

Columbia Heights, Washington DC, LEC:

  • Residents filed law suit over uninhabitable conditions, won ownership of building for $1, landlords transferred title to tenants and contributed $300,000 to rehabilitation of building to avoid criminal prosecution
  • Received no assistance with long-term costs

[edit]Policy that Supports the Third Way

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[edit]Federal Law

[edit]Social Movement Examples

[edit]Zapatista Community Decision-Making Model (Mexico)

The EZLN is a non-violent rural indigenous workers movement in southern Mexico that aligns itself with the wider alter-globalization, anti-neoliberal social movement, seeking indigenous control over their local resources, especially land. As the various excerpts below detail, they use a decision-making system of local direct democracy & a rotating delegation-based representative governance.

From Wobblies and Zapatistas by Staughton Lynd and Andrej Grubacic

When representatives thus chosen are asked to take part in regional gatherings, they will be instructed delegates. If new questions arise, the delegates will be obliged to return to their constituents. Thus, in the midst of the negotiations mediated by Bishop Ruiz early in 1994, the Zapatista delegates said they would have to interrupt the talks to consult the villages to which they were accountable, a process that took several weeks. The heart of the political process remains the gathered residents of each village, the asemblea. An anthropologist named June Nash has written a book about a village in Chiapas. She says that village functionaries (like the teacher and the storekeeper) meet frequently with the entire local population. According to Nash, at these meetings the functionaries are expected, not to talk, but to listen. p. 5-6
Representative democracy can be quite democratic if you try to make it democratic, rather than using large assemblages to impose preconceived ideas. The Zapatistas appear to be exemplary. In the first place . . . the community (the local movement) needs to take responsibility for the livelihood of anyone it asks to serve as a representative. Second, the representative should be an instructed delegate. In the initial negotiations in San Cristóbal, when a problem arose as to which the delegates had not been instructed, they said: “Sorry, we’ll have to go back to the village asembleas for instructions before we can respond.” Third and fourth, rotation in office must be enforced and the salary of a representative can be no larger than that of ordinary people back home. p.86

From Zapatista Spring by Ramor Ryan

Without government or state, how does political autonomy work in the Zapatista zone? How do the people organize to get things done, like realizing a water system for the community? In Roberto Arenas, like all Zapatista villages, the community assembly—with representatives from each household—meets in the community hall, weekly—or more frequently if there are things to decide. Together they determine the manner and method of developing their own village, taking into account what resources are available. Decisions are made by the assembly, preferably by consensus. If there is a split and no clear decision, the debates and discussions go on until the assembly reaches a consensus. Occasionally, this can take days on end. This is participatory democracy in action, warts and all.
This kind of assembly-based decision-making process is not unique to the Zapatistas: indigenous communities throughout the region have always worked like this, most likely since pre-colonial times. It is in this forum, that all the major decisions concerning the community are taken – from land issues to community development, to justice—and are then passed on to the relevant commission for fine tuning. The decision to join the Zapatistas and go to war on January 1st, 1994 was taken in such an assembly. And if asked what influence the EZLN has had on the traditional community assembly procedures, compañeros and compañeras will mention how more women and youth are now involved in the decision making than before. Previously the assemblies were dominated by older male members but with Zapatista influence, the old patriarchal ties are not as binding.
So it was that Roberto Arenas decided that their biggest priority was getting a fresh water supply. This necessity was prioritized over other pressing needs, like electricity, new work tools, a hammock bridge to span the river that separated them from the dirt road, and the construction of a church building.
The assembly nominated three water “commissioners” to investigate the matter and to petition the local autonomous council for help and support. The three made their preliminary survey of what would be needed and walked the arduous mountain paths through the jungle, arriving at La Garrucha, the regional autonomous municipality center. They attended the weekly council meetings— or juntas— overseen by the council representatives there by rotation, and attended by community members from any of the several hundred communities in this particular autonomous municipality (one of seven throughout the Zapatista zone of influence). This system of local governance is part of their aspiration to organize in a participatory manner, from the bottom-up instead of the top-down. The Zapatista slogan— to lead by obeying— captures this concept. pp.8-9

Self-management in Chiapas

From A New Direction For The Zapatistas

From these documents we learn that the "good government juntas" follow the libertarian structures established by the other layers of Zapatista self-management. By far the most provoking aspect is that the actual people who make up each junta are rotated in an incredibly rapid fashion. According to Marcos these rotations are from every "eight to 15 days (according to the region)". The delegates are themselves drawn from the members of the Autonomous Council (AC) and because these are rotated in turn (over a longer period which seems to be a year) this means that by the time everyone on an AC has been on the junta a new AC is created and so all these new people must in turn learn the ropes.
As might be imagined this is driving those who work with the Zapatistas nuts because it means every time you go to a 'good government junta' you are dealing with different people. This is by design and it is worth quoting Marcos at length as to why this is so.
"If this is analysed in depth, it will be seen that it is a process where entire villages are learning to govern.
"The advantages? Fine, one of them is that it's more difficult for an authority to go too far and, by arguing how "complicated" the task of governing is, to not keep the communities informed about the use of resources or decision making. The more people who know what it's all about, the more difficult it will be to deceive and to lie. And the governed will exercise more vigilance over those who govern.
"It also makes corruption more difficult. If you manage to corrupt one member of the JBG, you will have to corrupt all the autonomous authorities, or all the rotations, because doing a "deal" with just one of them won't guarantee anything (corruption also requires "continuity"). Just when you have corrupted all the councils, you'll have to start over again, because by then there will have been a change in the authorities, a


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