This article was originally published in our The Public Good: Reports from the Front Lines (September 27, 2017), available here.
About 15 years ago, the half-century flight from America’s cities came to an end. A growing number of cities began to see a growing in-migration, often of people with higher incomes. Rising real estate prices spurred land speculation and new developments, threatening existing neighborhoods with displacement and reducing affordable housing.
Some cities have tried to do right by their long-term residents. But the strategies they’ve embraced look to bribe developers with tax breaks or higher densities than the zoning code allows in return for the developer including in their high rise condos a portion with a sales price set to households with less than the area’s median income. On the whole, these bribes have only marginally increased affordable housing, done little if anything to preserve existing neighborhoods and in the long run, are unsustainable.
In the 1960s activists proposed a new strategy: Community Land Trusts (CLT) The first incorporated land trust was established in 1969. New Communities was a 5,700-acre land trust and farm collective in southwestern Georgia owned and operated by approximately a dozen black farm farmers from 1969 to 1985.
In 1972 Robert Swann, one of the creators of New Communities, wrote Community Land Trust: A Guide to a New Model of Land Tenure in America, which among others things, explained in detail how a land trust differs from conventional ownership. A trust separates the ownership of the land from the ownership of the building. A nonprofit organization, with a board usually composed of representatives from tenants and the surrounding neighborhood, owns the land and leases it to the homeowner for a designated period, often 99 years. The homeowner has the right to sell the land at any time, but the return to the homeowner is limited.
Keeping the land out of the real estate market holds down housing prices, as does limiting the equity gains that accrue to the homeowner. The objective of the land trust is not to maximize profit, but to maximize community and diversity.
In 1984 Burlington, Vermont established the nation’s first urban CLT. Burlington offered fertile ground for the concept. A rapidly inflating housing market created the need. A mayor, Bernie Sanders, receptive to the concept of social markets created the opportunity. Continue reading