Community Land Trusts

 

 

Introduction

Democratic Community Control of Land History of Community Land Trusts How it Works Making the trade-off


Social Movement in this Time

 

Democratic Community Control of Land

"The effective control of land in the public interest is the single most important means of achieving a more equitable distribution of the benefits of development.”

H. Peter Oberlander, Professor of Community & Regional Planning, Univ. of British Columbia

During this time of housing crisis and the privatization of public resources, such as parks, schools, recreation centers and services, the need for democratically controlled community land- as opposed to private or corporate controlled land- is greater than ever.

However, community control over land is a concept which can be applied in many different ways and, in fact, is practiced in a range of ways throughout the world, based on the unique needs of communities and the policies, laws, customs and practices of the society in which that community is located.

A democratically controlled Community Land Trust (CLT) is just one mechanism to realize community control over land and draw closer to the goal of elevating housing to the level of a human right.

African Communicalism: Ejim in Mexico; India; Pre-Colonial America

Today, most land is owned and controlled in one of two ways: either privately, by an individual or a corporation, such as a bank, to serve the owner's “private interest.” Privately owned land is increasing the domain of big corporations, such as banks, and wealthy individuals. Or, publicly, such as a government agency owning a park, library, school or post office, held in the “public interest.”

In the context of the recent land based economic crisis- a housing bubble; the forced displacement of low income communities of color associated with gentrification; the bursting of the housing bubble; the foreclosure debacle; the glut of vacant homes; and the vacating and privatization of public lands such as schools, recreation centers, parks, waterfronts, etc.0

The Community Land Trust (CLT) is one example of an alternative or third way: democratic community control over land. The CLT is an institution which allows members of a community to control land, and it's use, together, instead of by one corporation or individual.


How it Works

In the housing sector, CLTs keep housing prices low over the long term, minimizing the impacts of gentrification cycles and housing busts, such as the foreclosure crisis. But how?

In the private land ownership model, an investor buys a house to live in or rent out, and then sells the house for as much profit as possible. While this is a pretty good deal for the investor, the second buyer does not get such a good deal. By the time it gets to the fourth buyer, the house is no longer affordable, because three previous investors have already walked away with their own profits. When this process plays itself out over a short period of time, it directly results in the gentrification- the forced removal of low income people in order to make room for higher income people- of the neighborhood.

[graphic? $25k--> $50k--> $75k--> $100k]

While many tout the benefits of building wealth through homeownership, the reality is that housing as an investment only works when the next buyer pays more for the house than the previous one. However, as the bursting of the housing bubble so painfully demonstrated, because no commodity can simply increase in value forever, a “building wealth” model predicated on every subsequent homeowner paying more for a house than the previous one, is not sound.

But even if home prices were to magically rise continuously, guaranteeing wealth for every homeowner, over the long term, this model would prove an unsustainable method of providing housing for the members of that society. Every home price increase- and every price would have to increase in order to build homeowner wealth- would trigger a corresponding decrease in the number of families able to afford a home purchase and, eventually, even home rental.

The long term solution, then, is to make the housing affordable for the first homebuyer and then the second, third, fourth and so on. Of course, the only way to do this, is to remove the investment aspect of a house and convert it, instead, into a mere place to live: a home.

Removing the house from the speculative or investment market would simultaneously eliminate the profits associated with house sales and, consequently, the ever increasing prices of purchasing a house. This new arrangement would render housing bad for investment, but a boom for the human right to housing.

CLTs, by maintaining ownership of the land underneath a home and limiting the equity value of the homeowner, make housing prices affordable in perpetuity.

Using CLTs as a model for housing affordability makes sense anytime, but particularly during housing “booms,” which result in rapidly increasing housing prices and the correlating impacts of gentrification, resulting in the displacement of low income communities of color, as argued in a July 2007 position paper:

“Community Land Trusts (CLTs) appear to have the potential to make homes permanently affordable...

“Since the mid-1990s, the average price of a single-family home has risen considerably across the nation... making it more difficult for a typical household to buy a typical home. Housing affordability may be at its lowest level in the past 15 years...

“How do CLTs create and preserve affordability?.. The nonprofit land trust organization owns title to the land and the homeowner owns title to the building...

“The CLT’s position in the dual-ownership model allows the organization to... stipulate the future sale price of the home, thereby preserving affordability.

“The resale formula is probably the most distinctive feature of the CLT model. In an effort to maintain affordability by reducing the effect of market appreciation, CLTs limit the share of the increased value of the property that is due to the homeowner following the sale of a land trust home...

“... some critics... argue that homeownership is one of the only ways for low- and moderate-income households to create assets and wealth. Gaining only a limited share of the equity from a home sale could severely limit this ability. CLT advocates counter that the model may not make sense for all potential homebuyers and that the focus of their efforts is on long-term affordability, not asset development.”

Who authored this radical report, endorsing CLTs as a means of halting the adverse impact of the speculative market forces on housing prices? The Ninth District of the Federal Reserve Bank in Minneapolis#.


Making the trade-off

Supporting CLTs implicitly involves a social trade-off: trade away the ability ability to make huge profits by selling your house- at the expense of the next family and assuming you time the market properly- in exchange for a more stable housing market, with lower prices for all, bringing this society closer to fulfilling the human right to housing.

Residents of the local CLT will not get rich by selling their homes, but can save significant amounts of money by paying greatly reduced rent or mortgage rates, made possible by the CLT itself. In addition, residents will be actively contributing to long term affordable housing in their community.

For those concerned about the excesses of the housing market and who feel a sense of personal responsibility to address the housing crisis, joining or supporting a CLT might be just the right trade-off. For those unwilling to make such a trade themselves, the rest of the housing market remains open to your entrepreneurial zeal.

 

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