Community Land Trust Wins Grant For Permanent Affordable Housing Model

A unique nonprofit group that keeps homes affordable forever will receive part of a $500K grant to develop more affordable housing.

Since it was founded in 2006, the Community Land Trust of Palm Beach County has developed 52 single-family homes, and currently operates two multifamily rental properties with 80 units combined.

The grant was awarded by the Citi/Grounded Solutions Network Community Land Trust Accelerator, which was established in April when Citi Community Development, an offshoot of Citibank, contributed $1M. The CLT of Palm Beach County will split the $500K award with two other other housing organizations, both in California. Grounded Solutions Network, a coalition of community housing experts, will administer the grant money and provide technical support to the recipients.

Because home prices are so high, middle-income residents in hot markets are often consigned to rent in perpetuity and never build equity.

Enter the Community Land Trust model. A CLT, which is usually set up as a nonprofit group, buys or receives donated land. A family that meets certain income limits can “buy” the house, but is really given a 99-year ground lease. If and when they want to move, they sell their interest in the property, but keep only a slice of the profits from appreciation of the property. 

"The ownership of the dirt stays with the CLT," said Cindee LaCourse-Blum, executive director of the Community Land Trust of Palm Beach County. 

The 99-year lease functions much like regular homeownership, conferring tax benefits and rights. 

“In that 99-year ground lease, there’s resell restrictions," LaCourse-Blum said. "A resale formula that limits how much appreciation [sellers] can take. They always get back what they paid for it — they can pay off the mortgage and build equity and take a share of the market appreciation, but the formula sets the price for the next buyer.”

LaCourse-Blum said the CLT will use the grant money to build a duplex and six single-family homes. The county donated lots in the Village of Palm Springs that had previously been designated for rights of way. Guidelines specify that they can be sold to a family making no more than 80% of area median income, so $61,520 for a family of four. The properties will sell for between $122K and $145K.

LaCourse-Blum said that in some cases, governments provide subsidies to help struggling families buy homes, but as prices rise, residents cash out. For instance, a buyer might qualify for a subsidy of $10K, but if the home rises $50K in value, the owner might pay back $10K and keep the rest. The next buyer would need a $50K subsidy.

The CLT model, in contrast, keeps the home affordable in perpetuity.

“We don’t have a hole in the bucket we’re trying to fill,” LaCourse-Blum said.