WHAT IS A COMMUNITY LAND TRUST?
A Community Land Trust (CLT) functions to preserve public investment and to recycle and protect affordability. The CLT is an entity, typically a non-profit organization, that acquires and retains ownership of the real property and, in effect, sells the improvements via a long-term, renewable ground lease to a homeowner, another non-profit, a cooperative housing corporation, or for-profit entity. This arrangement between the owner and the CLT protects housing affordability in perpetuity by ensuring that the housing is made affordable to low- to moderate income persons upon the sale of a single-family, multi-family, and/or commercial property. The resale price restrictions contained in the ground lease stipulate the resale price formula that provides for a fair return (not a “market” return) on the homeowner’s investment. The Community Land Trust Model provides an opportunity for the City of Kalispell to preserve its investment in housing by developing permanently affordable homeownership opportunities for low-income households. The Community Land Trust structure allows the public investment in affordable housing to be recycled. By design, the CLT is committed to preserving the affordability of housing and other structures – one owner after another, one generation after another, in perpetuity.
HOW DOES CLT HOMEOWNERSHIP WORK?
Homebuyers receive affordability assistance from the land trust and enter into a long term land lease agreement to preserve the affordability of the home. CLT homes are sold to households with limited incomes. When a CLT household decides to sell a CLT home, they pass the home and the long-term affordability agreement on to another household with a limited income. The sales price is determined by using the NWMTCLT resale formula. The home stays affordable for future generations.
WHAT IS THE LONG-TERM AGREEMENT BETWEEN THE CLT
AND THE CLT HOMEOWNERS?
CLT homeowners enter into a long-term agreement with the CLT to preserve the affordability of the CLT home.
• Ground Lease agreement for single-family homes and townhomes.
With single-family homes and townhouses, the CLT homeowner owns just the house and the CLT owns the land beneath the home. The CLT is holding the land in ‘trust’ for the benefit of the greater community. Because a CLT owns the land and the homeowner owns the home, a CLT and the homeowner sign a Ground Lease that defines the roles and responsibilities of both the CLT and the homeowner.
The Ground Lease allows the homeowner secure, long-term rights to use the land. CLT homeowners have full use of the land, and they have full responsibility for the property. NWMTCLT homeowners pay $25/month to the NWMTCLT as a Ground Lease payment.