Policy

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.