A Community Land Trust is a non-profit organization that holds land permanently in trust for communities in order to make land permanently available for housing, farming, ranching, commercial space, historic preservation, or open space.
CLTs create permanent affordability by separating the price of land from the improvements made to it (such as homes or farm buildings), investing subsidy, and enforcing resale restrictions.
Home buyers, business owners, or farmers sign a ground lease agreeing to limit the equity they will take out at resale. This ensures the initial investment of subsidy stays with the property. In this way, people who are otherwise stuck in the rental market can build equity instead of paying a landlord. When they sell, the property remains affordable to the next buyer, and the buyer after that. Owners of the buildings pay taxes on what they own, and, depending on the community and the local tax base, they may pay taxes on the land as well.
Most CLTS in the U.S. focus on providing housing, but they can be used for so much more: the first CLT was established in 1969 by sharecroppers in Georgia to ensure access to agricultural land and economic opportunity for African American farmers. You can learn more about New Communities, the first CLT, here.
Today, there are more than 200 community land trusts in the U.S., with new CLTs being established in communities of all sizes and in all areas of the country. CLTs are recognized as one of the most effective tools to fight gentrification and displacement in cities, where outside investors and real estate speculators can push rents and property values beyond the reach of working people — but they also work to make blighted neighborhoods more livable.
Some great examples of other Community Land Trusts and the grassroots efforts that make them possible are in Burlington, VT, Chapel Hill, NC, Oakland, CA, and Buffalo, NY.
Unlike most CLTs in the U.S., Trust Montana is chartered to hold land in order to facilitate and protect a multitude of different community assets other than housing: agricultural working lands, open space, historic preservation, and commercial development. We partner with local organizations and community leaders in the areas where we work to ensure our projects are community-driven.
In 2009, during the Great Recession — when many families lost their homes, retirement savings, and pensions — a Lincoln Institute of Land Policy study found that CLT home owners were eight times less likely to go into foreclosure than market-rate home owners. This is due to the subsidized purchase price CLT buyers benefit from, as well as the financial fitness education requirements that are an integral part of CLT programs. Most CLT organizations are able to provide support to home owners in the case of default or financial hardship. CLTs have the ability to intervene to try to purchase a home back from a home owner before the home is foreclosed on, or provide assistance to avoid foreclosure.
Briefly,
- CLT ownership is a form of shared-equity home ownership. The median amount of equity that shared-equity home owners take with them when they sell their home is $14,000.
- Six out of 10 shared-equity home owners use their earned equity to purchase a traditional home after they sell.
- Seven out of 10 shared-equity buyers are first time home buyers
- In Montana, more than 150 households benefited from CLT home ownership between 2002 and 2019
Most of the CLT homes in Montana are in Missoula and Kalispell, with a few in Gallatin Valley and another 50+ homes planned for development in Big Sky and Red Lodge in the next two years. There are currently no CLT farms in Montana, but Trust Montana is working with multiple farmers around the state to develop plans for placing their land in trust to preserve them as working farms into the future.
Trust Montana is focused on providing low-income and workforce housing in places where the cost of real estate far outstrips what a person earning the median income can hope to pay. By providing home ownership opportunity to people who are otherwise locked out of the market due to ever-increasing property prices, Trust Montana aims to help solve the housing crisis in Montana.
Over the past two years, Trust Montana has seen a drastic increase of interest in — and need for — the housing affordability services the CLT provides. New projects will be taking shape in Red Lodge, Helena, and Gallatin Valley over the next year.
Community Land Trusts for Farmers
Farmers at the 2019 Montana Summit on Agricultural Finance highlighted the lack of affordable land as one of the main obstacles to their business growth.
The average age of a Montana farmer or rancher in Montana is approaching 60 years, and that means many farmers and ranchers are working to figure out what they will do with their land, and how they will be able to retire. The pressure
The Montana Budget and Policy Center’s Rental Housing Affordability Map provides some insight into the problems faced by working Montanans who are trapped in the rental market. Of particular interest from the Affordability Map is the data that illustrates the number of hours a minimum wage earner must work weekly in order to afford a rental home (counties listed are current TM focus areas):
Number of Hours at a Minimum Wage Job Necessary to Afford a Rental Home:
- Missoula County: 81 hours
- Gallatin County: 80 hours
- Carbon County: 81 hours
- Lewis and Clark County: 72 hours
