The problem
· Over the last decade, housing costs have skyrocketed in the Mid-Columbia. Unfortunately, incomes have not kept pace. Average folks, from hardworking families to seniors living on fixed incomes, can’t own a home of their own in the community in which they live. Community land trusts make home ownership possible.
How it works
· Community land trusts sell homes to people who are credit-worthy but whose incomes will not allow them to qualify for a home in the traditional real estate market. While buyers own the house, the land beneath their home belongs to the community land trust and is leased to them through a long-term, renewable and inheritable lease.
· When homeowners sell their homes, the resale price is based on a formula designed to provide a fair and reasonable rate of return on the investment, while at the same time keeping the home’s price within reach for future buyers of modest means.
· In practice, the resale formula allows for a one-time investment from the community that enables the community land trust to lower the price of a home to the original homebuyer. This investment is maintained over the life of the home, benefiting people and families many times over and eliminating the need for additional investments for future families.
How Communities Benefit
Community land trusts foster stable communities.
· Safe and stable housing is the bedrock of every community. With community land trusts, the community owns the land, ensuring that it will always be used in ways that benefit the community.
· Community land trusts build and strengthen communities by providing a permanent stock of affordable, owner-occupied homes, making it possible for those who work in the community to live there as well.
Community land trusts preserve resources.
· Community land trusts are serious about sustainability. Communities are designed to make the most of the land while preserving green space and, because residents can live where they work, commuting and its negative effects on both the individual and community are reduced.
Community land trusts protect residents from displacement.
· Rising property values often force modest income people and families to move out of the area. By keeping down the cost of the land, community land trusts protect residents from this displacement, and promote strong community ties and the connection that comes from putting down roots.
How People Benefit
Community land trusts enable people to become homeowners.
· Community land trusts provide access to a housing market that increasingly excludes people and families with modest incomes.
· Community land trusts get people in the door. The original investment from the community makes possible a transition from renting to owning, and the equity built through ownership can be applied to future home purchases in the traditional market.
Community land trust homeowners build equity.
· The community land trust model, in which homeowners sell their homes according to a resale formula, provides a fair and reasonable rate of return on the homeowner’s investment.
· Homeowners regain their initial investment plus a fair share of the appreciation of their home.
Community land trusts promote healthy families.
· Home ownership provides the stability and security so important to healthy families and communities.
· Housing gives people an opportunity to build better lives. Community land trust housing provides security, stability, tax benefits and a chance to build equity so that families can stay together, stay strong and stay successful.
· The stable and secure housing made possible by community land trusts enables many individuals and families to invest in their own future, improve their financial status and positively contribute to the economic development of the community
Community land trusts support and educate homeowners.
· Homebuyers become members of the community land trust when they purchase their home. Membership offers opportunities for leadership development by giving homeowners a voice in the governance and direction of the community land trust.
· Owning a home is a lot of work. Community land trusts help first-time homeowners meet the challenges by offering maintenance and repair workshops, coordinating member meetings, arranging loans, providing credit counseling and much more.
About Community Land Trusts
What is a community land trust?
· A community land trust is a nonprofit organization that provides access to land and housing at affordable rates. What makes the community land trust model unique is that community land trust housing is affordable forever. How is this possible? Community land trusts create opportunities for home ownership based on a shared appreciation model. Community investment in partnership with homebuyers helps them purchase the home on community land trust land. In exchange, homeowners agree to a resale formula that enables them to recapture a fair share of the appreciation of the home while ensuring that the home stays affordable to people in the same income bracket.