Community Land Trusts (CLT) are a way of creating permanently affordable housing. They do this by separating the ownership of the land from the housing. The land is owned by the CLT, so the buyer only purchases the home. This, in addition to other subsidies that the CLT may have been able to leverage can reduce the cost of a house to as much as half the price of a comparable open market house (Champlain Housing Trust). In return, the homeowner agrees to cap the resale price, thereby permanently maintaining affordability.
A 2010 study showed that foreclosure rates for CLT homeowners, were 10 times lower than those for conventional mortgages. CLT rates of serious delinquencies were 6.6 times lower. This is all the more impressive given that most CLT homeowners are low to lower middle income, whereas those in the conventional mortgages survey included higher income borrowers.
Created by CPE Member Economist Emily Kawano
November 2011
Sources:
Thaden, Emily. 2011. Stable Home Ownership in a Turbulent Economy: Delinquencies and Foreclosures Remain Low in Community Land Trusts. Lincoln Institute of Land Policy.
http://www.vtaffordablehousing.org/news/wp-content/uploads/2011/08/Stable-Home-Ownership-in-a-Turbulent-Economy.pdf
National Community Land Trusts Network, Foreclosure page, http://www.cltnetwork.org/index.php?fuseaction=Blog.dspBlogPost&postID=36
