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How does it work?

The philosophy

In the CLT philosophy, land does not have commercial value, and access to affordable, quality housing is a fundamental right. Living together on collectively-owned land opens new perspectives and networks that support households and individuals, and that assist in the creation of inclusive and resilient neighbourhoods. The CLT model is a solid base for developing new social housing models that can respond to the enormous needs regarding affordable housing, as well as to social challenges such as population aging, gentrification, demand for informal care, or vulnerable communities.

Collectively-owned land as a foundation for a more sustainable and just city

Today, communities across the world, facing diverse circumstances, are turning to the CLT model in order to respond to urban development challenges. Rural communities in the southern United States used the CLT model in the fight for civil rights. Residents of informal settlements in developing countries use the CLT model to legalize their property deeds and to preserve the affordability of their housing. Residents of a gravely disinvested neighbourhood in Boston put in place a CLT to revitalize their community, all while avoiding the harmful effects of gentrification. In Brussels, CLTB develops social housing that allows low-income families to become homeowners.

This model has an added value for all parties:

  • Investment by the community is used in a sustainable way, making the housing permanently affordable for low-income families. The underlying idea is that when public funding is used to create affordable housing, the housing stays affordable forever.
  • Investment by homeowners permits them to build their assets and to emerge from difficulties connected to unsuitable housing that is too expensive. 

Two CLTs were recently rewarded by the United Nations World Habitat Award: the Champlain Housing Trust in 2008 and the CLT “Caño Martín Peña” in Puerto Rico in 2016.

A model kit

The “CLT model” is not a rigid formula that can be applied in all circumstances, but rather a “kit” in which the foundational elements can be assembled in different ways, according to the local situation.

 

All CLTs are the result of adaptation to their specific contexts, but they all generally share the following characteristics, the backbone of a CLT:

1. Hybrid ownership model

The CLT acquires land to manage it in the interest of the community. It commits to never abandon its land. The buildings on the land are the individual property of residents, or in certain cases, of an organisation, such as an association or a cooperative.

 

The land is therefore collective property (because the CLT is managed by the community), while buildings erected on the land are the individual property of homeowners. In order to permit horizontal separation of the property, CLTs in the United States generally use long term leases. In Brussels, CLTB uses an existing legal form, the “droits démembrés” and primarily the “droit de superficie.” property dismemberment and leasehold estates. Monthly, the owner of the building pays “rent” or a lease fee to the CLT for using the land.

 

The separation of land ownership from building ownership not only makes the housing accessible first and foremost (homeowners do not pay the price of the land), but also guarantees stewardship by the CLT of the specific conditions of occupation or of the transfer of housing, for instance, the sale of housing units.

2. Permanently affordable prices

Affordable prices are an essential part of CLTs. Homeowners benefit from a grant in order to buy a home at an affordable price, but they commit to passing on the assistance when they resell their home.

 

The owners of CLT housing can sell their home, but with a price ceiling: the seller can recuperate what they invested, with a small additional amount. This sales price limitation guarantees that access to the property remains affordable for successive buyers, resale after resale.

 

In practice, CLTs use different formulas to determine the sales price. The most common formula offers to sellers a fraction of their housing’s appreciation, but certain CLTs propose pricing indexation, or even formulas that link the change in sales price to the average income of the surrounding area. Generally, formulas aim to establish fair arbitration between legitimate waitlists of sellers and the maintenance of housing accessibility. In other terms, formulas are intended to filter out “unearned income” as theorised by Henry George.

3. Managed by the community

CLTs are accessible organisations. Occupants of CLT housing, as well as all others who live or work in the CLT neighbourhood, can become a member, participate in the development of the CLT, and elect their representatives to the Administration Council. In general, a third of administrators represent residents, another third the surrounding neighbourhood, and the last third the public interest or government. This balanced distribution guarantees the participation of residents in the management, all while assuring that the interests of the inhabitants of the neighbourhood and the public interest are equally respected. Again, a fair balance between individual and public interest is essential.

4. Stewardship

The last characteristic is what we call stewardship, according to CLT litterature. The CLT assumes permanent responsibility of the land that it possesses and of the buildings constructed on the land. In order to ensure the longevity of projects, the CLT is interested in the fact that the homes are well maintained. CLTs are therefore very engaged in informing and leading residents. CLTs generally take care that homeowners do not take toxic loans by proposing training and support if necessary. CLTs are the “developers that never leave.”

The following definition of a CLT can be drawn up based on these characteristics

A Community Land Trust is a non-profit organisation that has a mission to acquire and manage land in order to create housing that is accessible to households experiencing difficulties in access to housing, as well as eventually to create collective interest facilities.

 

Sales will be made by separating ownership of the land from the building. The CLT will remain the permanent owner of the land. CLT homeowners all have rights connected to ownership, but accept the specific conditions of occupation and of transfer in order to guarantee that the housing is permanently accessible for the target public.

Everyone residing on Community Land Trust land is able to become a member. The Administration Council is composed equally of representatives of CLT residents, other CLT members, and public powers in order to ensure the arbitration between the needs of the homeowners and those of the community, all while being particularly attentive to the interests of future generations.

Great diversity

Today, there exists 500 to 600 CLTs, primarily in the United States and in the United Kingdom. CLT models also exist in Canada, Kenya, Australia, France, and in Belgium. And what defines CLTs the best is their diversity. Certain CLTs are active in rural areas, others in cities; some concentrate on a single block of houses and others consist of an entire town. Most CLTs do not only manage a part of the buildings located on the land, but there are examples – like the aforementioned CLT Caño Martín Peña – that manage everything. There are CLTs that only construct housing, others that develop all sorts of other amenities, such as shops and commercial facilities. Certain CLTs have 2 houses in their portfolio and others have 3,000. Some build, others renovate. Certain CLTs put houses up for rent. Some build houses and others apartments (or condominiums). Some CLTs seek to reach the most disinvested communities, while others the lower middle class.

 

The way in which CLTs combine and apply these characteristic types is also very variable. Just in Europe, it is striking to see how different the visions are in France and in the United Kingdom. In England and in Wales, a great importance is placed on the community dimension. Most of the CLTs are small citizen initiatives, entirely supported by volunteers, principally in rural areas. Often, they do not possess the land on which their projects are developed. In fact, due to the British system of leaseholds and freeholds, certain land cannot be sold, but uniquely opened for “rent.” In France, the landscape is very different. CLTs are still very recent, but it will probably be primarily urban governments that apply the model. Management of the CLT through citizen participation will be hardly or not at all present. The emphasis is mostly placed on the separation of land ownership and home ownership in order to guarantee a permanently affordable price.

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