Community Land Trust

10 Frequently Asked Questions

What is a Community Land Trust?

CLT’s are not-for-profit organizations created to hold land for the community or individuals within the community. The land trust retains ownership of the land in perpetuity.

How do CLT’s make homeownership affordable?

By removing the cost of the land, the purchase price is lower than the homeowner would have to pay otherwise. Grants or low interest loans may also be provided to more deeply subsidize the cost of the house, making it affordable to people at lower incomes.

What happens if the homeowner decides to move out of their home?

If owners want or need to move away permanently, they must sell the house. A land lease places some limitations on the resale of the home. Land leases prevent the resale to a household that does not qualify as low or moderate income, and they limit the sales price to keep it affordable. Subleasing is permitted only for limited periods of time with the consent of the CLT.

How does the CLT make sure that the home will be affordable –and available- for other lower income households?

The land lease lays out a “resale formula” that determines the maximum price. The lease requires that the home be sold for an affordable price to the CLT or to another lower income household. 

How do CLT’s acquire properties?

As tax-exempt organizations, CLT’s may receive gifts of property from individuals or corporations. Often CLT’s acquire city or county owned property from local governments. In other cases, they purchase property in the open market.

What types of housing do CLT’s provide?

A wide variety of housing – single family homes, townhouses, condominiums, housing coops, affordable rentals, shelters, etc.

Can CLT's homes be inherited?

Yes, the home is an asset that can be left to the owner’s heirs or to anyone else the owner chooses. When a home is inherited, most CLT’s will allow the heirs to live in the home if they are (1) children of the deceased owner, or (2) have already lived in the home for a period of time, or (3) qualify as low or moderate-income households. Heirs who do not meet any of these qualifications, or who do not intend to live in the home, must sell the home in accordance with the resale restrictions. They will receive the proceeds from the sale.

How are property taxes assessed?

Owners pay property taxes on their homes. CLT’s usually pay taxes on their landholdings with the cost usually covered by lease fees from those leasing the land.

Can CLT’s homebuyers get mortgage loans even though they won’t own the land outright?

Leasehold mortgages can be, and have been, insured by FHA, and have been purchased on the secondary market by Fannie Mae, and a number of state housing finance agencies, and some banks.

Why does the City of Orlando support the development of a CLT organization?

The City recognizes that CLT’s are a tool to accomplish the following:

• To retain the value of public investment for long term community benefit
• To ensure that a portion of the City’s housing will always be available and affordable to lower income people
• To revitalize neighborhoods without making the housing unaffordable to the people who live there
• To sustain owner occupancy and prevent absentee ownership

CLT Steering Committee Member List

Presentation

March 7, 2005 Workshop with City Council