For the past 45 years, Cascadian community land trusts (CLTs) have stabilized renters and increased access to homeownership through their permanently affordable model for low to moderate income households. But in my last article, we saw that despite all of the affordability and community benefits, community land trust homes are only a small portion—just 0.03 percent—of the region’s total housing stock. In Vancouver, BC, which boasts the largest number of community land trust homes in Cascadia, only about 1,000 of the city’s 309,000 homes are in a community land trust.
The main barrier holding back community land trusts from producing more permanently affordable homes is lack of funding. Community land trusts rely on external funding to start up and produce homes. If successful, money from resale and monthly homeowner dues can cover operational expenses over the longer term.
To become self-sufficient, community land trusts must scale up to that “magical number,” with which they can cover operating costs through the income earned through monthly lease fees, membership dues, and resale fees. The number of units a community land trust would need to reach differs depending on the fee structure, operational costs, and resale formula of the community land trust. But most community land trusts are self-sustainable at 150 to 200 units. Advocates and bureaucrats alike increasingly look to this model as an affordable housing solution and would like to see it expand to a much larger scale—beyond the point of self-sufficiency and towards stabilizing more low-income residents.
Providing affordable housing isn’t the sole purpose of a community land trust, though. Central to their mission is to facilitate community control of land, where democratically-elected community members collectively decide the community land trust’s future. But some critics argue that their structure is becoming more commonly run by professional staff with the capacity to pursue funding opportunities and facilitate community engagement—a tension endemic in community organizing spaces. To scale up while maintaining a community-grounded mission, the community land trust movement will have to confront the financial and bureaucratic forces that put grassroots development at a disadvantage and prevent the model from taking widespread root in neighborhoods across the country.
Federal funding for community land trusts has dried up
Historically, community land trusts in the United States primarily relied on federal funding from Community Development Block Grants (CDBG) and the HOME Investment Partnership. Community land trusts have also tapped state Housing Trust dollars, Self Help Homeownership Opportunity Program (SHOP) funding, bank grants, tax increment financing, and philanthropic sources.
While the federal government once prioritized direct funding for subsidized housing construction through HUD, this began to change in the late 1950s and 1960s, when Congress introduced new programs incentivizing private investment in affordable housing. In 1973, President Richard Nixon enacted a moratorium on the construction of new rental and homeownership housing by major HUD programs, and in the early 1980s HUD eliminated funding for new construction under the Section 8 project-based program. Instead, HUD prioritized the expansion of Section 8 vouchers, Community Development Block Grants, and introduced the Low-Income Housing Tax Credit (LIHTC) program to support both nonprofit and for-profit developers in building affordable housing. With the gutting of direct funding for new affordable homes, the number of subsidized units HUD committed to building dropped by 86 percent from 1976 to 1982. Meanwhile, the federal government lost billions of dollars of revenue as housing-related tax expenditures skyrocketed by 281 percent from 1976 to 2002, a majority of the cost deriving from the mortgage tax interest deduction which primarily benefits wealthy homeowners.
The shift to federally-funded but locally-controlled programs also helped create the funding pools that community land trusts primarily relied on—CDBG and HOME. But funding for both programs hasn’t kept up with inflation and is just a drop in the bucket of HUD’s total budget. Since the creation of CDBGs in 1975, Congress allocated about $2 billion to $4 billion annually to the program; but normalized to 2016 dollars, funding fell from a peak of about $15 billion in 1979 to about $3 billion in 2016 . At the same time, the number of grantees have doubled from 1975 until now. Since Congress created the HOME program in 1992, funding rose from 1.5 billion to over $2 billion in 2004 before dropping to $1.3 billion today.
Dwindling funding for the CDBG and HOME programs and heightened competition for state funding from a growing number of affordable housing providers are collectively raising the pressure on local governments to provide more community land trust funding.
What strategies can cities implement to increase community land trust homes?
Use Right of First Refusal Policies to Allow Tenants and CLTs to Purchase Existing Housing
Since 1980, renters in Washington D.C. have used the city’s Tenant Opportunity to Purchase Act (TOPA) to buy their buildings when they’ve come up for sale. Under TOPA, residents can create a tenants’ association, collectively refuse the sale of the building, and buy the building themselves for the same price. Since renters usually do not have the financial means to collectively purchase a building on their own, they typically seek the help of a developer, either non-profit or for-profit, to make the purchase. The city’s Department of Housing and Community Development (DHCD) also provides low-interest loans to tenant associations for building purchases as well as funding to nonprofits that can provide technical assistance.
Most recipients of DHCD funding choose to form a limited equity co-op, which is similar to a community land trust in that the homes’ resale prices are restricted, and some community land trusts use the limited equity co-op structure. From 2002 to 2013, the Washington DC TOPA policy transferred around 1,400 homes into resident ownership. Critics note that only 19 buildings purchased out of 398 offers made by tenants under TOPA from 2009 to 2015, although the pace increased in recent years, with 24 buildings bought under TOPA from 2016 through 2018. A 2019 Urban Institute report on the DC program found that TOPA “plays an essential role” in preserving and creating affordable large, family-sized units in particular. To see more tenants exercise their TOPA rights for the thousands of units sold each year, DC can pursue partnerships with local community land trusts to take a more active role in supporting tenants who want to purchase their building but don’t have the legal, operational, and financial support to do so.
In 2019, San Francisco adopted a Community Opportunity to Purchase ordinance, allowing tenants to assign a right of first refusal to select community development organizations that can purchase the units as long as they keep them affordable. This policy built on the city’s Small Sites Program, which gave loans for nonprofits to acquire small apartment buildings, ranging from five to 25 units, with low to moderate income tenants. In San Francisco, a city with one of the worst shortages of affordable housing in North America, this program helped the San Francisco community land trust acquire four of its thirteen properties.
As tenants are unlikely to have the expertise to form a community land trust, cities can connect tenants with existing community land trusts who can provide the operational and financial support to guide tenants through the process and guarantee long-term stability and affordability. For tenants still unable to purchase, community land trusts can also provide stable rental housing. In recent years, California, Massachusetts, and New York proposed TOPA policies, as has Berkeley, CA (a proposal is soon to come in Oakland as well). Meanwhile, Boston and Somerville, MA are petitioning their state legislature to allow localities to adopt the policy.
Provide Land for CLT Homes
Expensive land is a major barrier to community land trusts. As mentioned in a previous article, the city of Vancouver leases land to the Co-operative Housing Federation of BC (CHFBC)’s community land trust. The Globe and Mail reported that in earlier deals with the community land trust, the city offered 99-year leases for $10—essentially free. Other cities such as Seattle, Chicago, and Los Angeles enacted policies to use surplus city-owned land for affordable housing, although they don’t prioritize community land trusts. In 2019, Seattle donated two pieces of city land to Homestead community land trust to develop affordable condos and townhomes. The Housing Authority in Renton, a Seattle suburb, also gave Homestead land to develop the first net zero energy affordable homeownership project in King County.
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Cities can go a step further by creating land banks that directly transfer land to community land trusts. The city of Houston, the Houston Land Bank, and the Houston Community Land Trust work together to provide affordable homes with the New Home Development Program (NHDP). The Houston Land Bank acquires property that is vacant, abandoned, or with delinquent property taxes. Through the NHDP, the city of Houston then funds construction of new homes on lots owned by the land bank. Income-qualified buyers can acquire down payment assistance from the city or purchase homes for a reduced price through the Houston Community Land Trust.
The city of Albany, NY requires that the local land bank offer the Albany Community Land Trust the right of first refusal on properties sold through the city’s Inclusive Neighborhood Program. Through this program, the land bank offers properties to the land trust at a discounted price. Although the land bank’s board of directors can ultimately refuse the community land trust’s offer, the aim of the program is to distribute land trust properties throughout the city, not just in neighborhoods where the market is strongest. Cities can also prioritize land near transit, jobs, schools, parks, and amenities for community land trust development to help provide equitable access to opportunity, goods, and green spaces.
Create City-Wide Community Land Trusts
In areas without existing community land trusts, cities can partner with residents and community advocates to create them. By providing initial funding for a local community land trust start-up, the city can help such projects get off the ground and overcome early financial barriers. In the late eighties, the city of Boston granted power of eminent domain over privately owned vacant land to the Dudley Street Neighborhood Initiative, which then formed the Dudley Neighbors Community Land Trust to steward the land, which now holds 225 affordable homes, an urban farm, a community greenhouse, and other amenities. More recently, New York City created the city-wide Interboro CLT in 2017, and Houston launched the Houston Community Land Trust in 2018. City policymakers in Sydney, Australia will consider including a city-wide community land trust proposal as part of their Sydney 2050 comprehensive plan.
Encourage Community Land Trust Hub & Spoke programs
Proud Ground, Cascadia’s second largest community land trust, began offering legal and financial assistance to smaller community land trusts in the region in 2014. This hub-and-spoke model allows community land trusts to serve a variety of communities and bring affordable housing to more people while local community organizations retain control over day to day operations. The hub-and-spoke model is not unique to Proud Ground, and many other community land trusts have created formal and informal networks where a centralized community land trust partners with neighborhood-level community land trusts. The Greater Pittsburgh Community Land Trust uses the hub-and-spoke model along with other community land trusts in Atlanta, New Orleans, and South Florida.
The Community Development Dilemma
While community land trusts were originally envisioned as a way to preserve community control of land by democratically-elected community members, not all of them operate under this classic model. Critics of the modern community land trust movement believe that pressure to produce more affordable housing is causing a shift in control from communities towards non-profits. They argue that this pressure has caused professionalization of community land trusts through nonprofits, which takes control away from community members and residents and grants it to non-profit staffers. As a community land trust grows, it also becomes more difficult to serve the differing, unique needs of individual communities located throughout cities or counties. Counterproductively, the stringent requirements of federal funding programs make it difficult for small community land trusts to acquire funding and inherently push them to expand bureaucratically.
If community land trusts could rely on community-generated funding rather than investments from governments or large philanthropic foundations, they would be more directly accountable to the communities they serve and more power would be retained within the community itself. However, community resources are usually insufficient to support community land trusts in acquiring land and constructing housing. Critics pose that governments and philanthropies could directly fund more grassroots efforts, reward good actors who demonstrate community accountability, and limit the bureaucratic hoops through which community land trusts have to jump through in order to acquire funding.
The bigger picture: we need every level of government to commit to providing housing for all
We know that our current housing market, which propagates housing as a tool for wealth creation, leaves many families displaced and unhoused. Community land trusts offer a solution to that problem by putting land and housing under the control of the residents.
Cities with adequate surplus land can commit to donating land to community land trusts, with a higher priority on those that demonstrate community accountability. Cities can support grassroots community land trust efforts in communities of color, especially in Black neighborhoods that experienced redlining, pairing funding with rights of first refusal. Cities can help create city-wide community land trusts, where control is retained within individual neighborhoods. Cities can also help facilitate local hub & spoke programs where larger community land trusts can give legal and financial support to smaller, grassroots efforts.
However, larger systemic issues around income and wealth inequality require action beyond what local governments can achieve. Direction is needed from the state and federal government through plans like the National Homes Guarantee program to mass produce the permanently affordable housing needed to provide widespread housing stability.
Ultimately, we must recognize housing, not as a wealth investment reserved for the rich, but as a right for all.