🏡 What Is a Community Land Trust?

How a Community Land Trust Works

A CLT separates land ownership from homeownership to preserve affordability and community control. The trust retains ownership of the land permanently, while the homeowner buys the structure and leases the land through a long-term ground lease.

• Land ownership stays with the trust — ensuring long-term affordability.
• Homeowner buys only the building — reducing purchase costs dramatically.
• Ground lease agreements — typically 99-year renewable leases that give homeowners stability and rights similar to fee simple ownership.
• Resale price restrictions — formulas ensure the home remains affordable to future buyers.
• Community governance — residents often serve on the CLT board, shaping policies and oversight.

This model protects neighborhoods from speculative price increases and displacement while offering stable, equity-building homeownership opportunities.

Why Community Land Trusts Matter

CLTs play a crucial role in affordable housing, community development, and long-term neighborhood stability.

• Permanent affordability — prices remain accessible for future generations.
• Protection from displacement — supports residents in rapidly appreciating markets.
• Shared equity model — homeowners build equity while keeping homes affordable.
• Community control — residents help govern land use and housing decisions.

Key benefits of CLTs:

• Predictable ownership costs for buyers.
• Stable, long-term housing supply in expensive markets.
• Improved community cohesion and engagement.
• Better stewardship of local land and resources.

Example of a Community Land Trust

Imagine a nonprofit acquires a parcel of land in a rapidly growing city. It builds ten homes and sells each home for a below-market price, but retains ownership of the land.

• Buyers purchase homes at reduced prices (e.g., $220,000 instead of $420,000).
• Each homeowner signs a 99-year renewable ground lease.
• The CLT caps future resale prices to keep the home affordable.
• The homeowner still builds equity through mortgage paydown and allowed appreciation.

This ensures affordability today and decades into the future while allowing moderate-income buyers to participate in homeownership.

Why Community Land Trusts Matter for FSBO Sellers

Selling a home in a CLT is slightly different from traditional real estate due to ground leases, resale formulas, and affordability restrictions. FSBO sellers should understand these requirements to navigate disclosures and buyer expectations effectively.

• CLT resale formulas may limit listing price, affecting marketing strategy.
• Sellers must disclose ground lease terms and affordability rules.
• Buyers may require additional explanation of the CLT structure.
• MLS listings often require specifying that the home is part of a CLT.

Listing through Flat Fee MLS on Brokerless helps sellers attract buyers who understand CLT ownership and affordability models.

Related Real Estate Concepts

• Ownership
• Leasehold Property
• Variance
• Land Use

🔗 Related Resources for Buyers & Sellers

• Purchase Agreement (FSBO)
• Seller Closing Costs Guide
• Contingencies Guide

Frequently Asked Questions

Do homeowners build equity in a CLT?
Yes. Homeowners build equity through mortgage paydown and limited appreciation, even though the trust owns the land.

Can a CLT home be financed with a standard mortgage?
Often yes. Many lenders offer loans for CLT homes, and ground leases are designed to meet lender requirements.

Do CLT homes increase in price?
They appreciate at a controlled rate to keep them affordable for future buyers.

What happens if a homeowner wants to move?
They sell the home back through the CLT resale formula, ensuring long-term affordability.

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