There are several key provisions
that promote the developmental climate for community land trusts .
- Priority Designation. Policy supportive of community
land trusts prioritizes or requires permanent affordability . In
qualifying for funding, donations of land, or other municipal concessions,
community land trusts should have an advantage over affordable housing
without resale restrictions, with resale restrictions that are forgiven
over time or restrictions that expire in 20-30 years.
- Retaining Full Value of the Subsidy. Policy and funding
should be structured to require or at least reward subsidy retention in
the housing itself rather than recapturing of subsidies with interest.
In the latter scenario, the value of the subsidy is greatly diminished
over time as the market appreciates. In contrast, CLT subsidy retention
maintains affordability by removing the land from the equation and controlling
the value of the improvements.
Programs in different political
and economic environments vary in their choice of policy directions. Permanent
affordability has been a scoring advantage in competing for Federal
Home Loan Bank funds and CLTs have benefited from this priority. Community
Development Block Grant and federal HOME funds have been primary sources
of CLT financing. Both of these programs have often placed a strong emphasis
on permanent affordability. Encouraging these funding programs to maintain
permanent affordability and subsidy retention as program goals or requirements
should be a high priority in public policy advocacy.
- Reducing Debt . CLTs typically remove the entire cost
of the underlying land from the selling price of housing and other improvements
with long-term controls placed over value and use. To maximize long-term
affordability, the community land trust should be enabled to acquire the
land debt-free. This can be accomplished through grant funds as well as
land donations. CLTs should be prioritized when municipalities mandate
private developers to make land donations or develop affordable units
in exchange for density bonuses, approvals and other local concessions.
- Combining Strategies. As discussed in the section
on housing cooperatives, placing co-ops on CLT land provides a safeguard
to the co-op's permanent affordability because the CLT will monitor its
resale restrictions and is a safeguard for co-op members because the CLT
can support the co-op in providing long-term stewardship of the property.
Developing rental or co-op housing through the Low
Income Housing Tax Credit (LIHTC) program on land held by a CLT ensures permanent
affordability and stewardship of the property over many generations rather
than for the limited 15-year period required by the LIHTC program.
- Tax Assessment. CLT-owned land and improvements on
CLT land that have resale restrictions placed on them should be assessed
and taxed based on their actual resale value, not on comparatives that
are made up of properties whose resale price is not restricted.
- Operating Support. Operating support-an issue for
any nonprofit affordable housing developer-is crucial for community land
trusts. At least three years of start up operating support is critical
because the organization cannot generate developer's fees, property management
income, or ground lease fees until it has developed property. Because
they take on the task of building membership and stewarding land over
the long term, CLTs need a stable base of support to build organizational
capacity for these multiple roles.
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