How to Start a Community Land Trust in Your Town

In 1969, in the flat farm country of southwest Georgia near Albany, a group of civil rights organizers did something no one in the movement had quite tried before. They bought land, nearly six thousand acres of it, and they put it in trust. The group called itself New Communities. Among its founders were Charles Sherrod, who had come to Albany years earlier as a young organizer for the Student Nonviolent Coordinating Committee, his wife Shirley Sherrod, the Albany leader Slater King, and Robert Swann, a peace activist who had been thinking about how land could be held for the common good rather than for speculation. The idea was that Black farm families, many of them pushed off land as sharecroppers for registering to vote, could live and farm on land the community owned together, so that no single foreclosure or white landowner's grudge could take it away. It is widely regarded as the first community land trust in the United States. New Communities farmed for years, and then it lost the land: after droughts and repeated denials of the federal farm loans that neighbouring white farmers received, the property was foreclosed in 1985. The story did not end there, and its ending says something about what land trusts are for.

In short: A community land trust is a nonprofit that owns land and leases it to homeowners, renters or businesses under long-term ground leases, with a resale formula that keeps the homes affordable for each future buyer. Starting one means building a coalition, incorporating a nonprofit with a board that includes residents, finding money and land, and writing the lease and resale rules carefully. It takes years, but a land trust can keep homes affordable in a neighbourhood for generations.

The idea in one paragraph

Most homes in the United States are sold as a bundle: the house and the land under it. When a neighbourhood becomes popular, the value of the land rises fastest, and that rise is what prices out longtime residents. A community land trust separates the two. The trust, a nonprofit, owns the land permanently. A family buys only the house, at a price far below the market, and leases the land from the trust for a small monthly fee, usually under a lease that runs for ninety-nine years and can be renewed and passed to heirs. When the family sells, it agrees to sell at a price set by a formula, typically the original price plus a share of the increase in value, so the home stays affordable for the next buyer. The family builds some equity and gets stability; the community keeps the subsidy in the house, rather than watching it disappear at the first sale.

That last point is the mechanism that makes land trusts different from most affordable housing programs. A down-payment grant helps one buyer once. A land trust's subsidy stays with the property.

What happened to New Communities, and why it matters

The foreclosure of 1985 was not simply bad luck. Black farmers across the South had for decades faced discrimination in the federal farm lending programs run by the Department of Agriculture, a pattern that became the subject of a landmark class action, Pigford v. Glickman, settled in 1999. New Communities pursued its own claim and, after many years, won a substantial settlement. With it, the organization bought a former plantation near Albany and returned to farming there, growing pecans among other crops.

There are two lessons in that history for anyone starting a land trust today. The first is that a land trust is only as secure as its finances and its access to credit. Holding land in common does not protect a trust from a lender that will not lend or a government program that treats it unfairly. The second is that land trusts were born in the civil rights movement, not in a planning office. They began as a way for a community that had been denied ownership to hold ground together. That purpose, keeping land in the hands of the people who live on it, is still the best test of whether a land trust is doing its job.

How land trusts grew

From southwest Georgia, the idea spread slowly. Its best-known success came in Burlington, Vermont, where the city helped launch the Burlington Community Land Trust in 1984 under Mayor Bernie Sanders. It grew into the Champlain Housing Trust, which owns or stewards thousands of homes and apartments and is often cited as the largest land trust in the country. In Boston, the Dudley Street Neighborhood Initiative won the power of eminent domain over vacant lots in its neighbourhood in the late 1980s, an unusual grant for a community group, and used it to build permanently affordable homes through a land trust.

Today there are hundreds of land trusts across the country, in big cities and small towns, many of them connected through a national network called Grounded Solutions Network, which publishes model documents and training. They range from a handful of homes run by volunteers to large organizations with professional staff. Some hold rental apartments, community gardens, small-business storefronts or farmland, not only owner-occupied houses.

The honest case against, and the answer

Land trusts have critics, and some of their points are worth taking seriously.

• Limited equity. A buyer in a land trust home does not capture the full rise in value. In a hot market, a neighbour who bought a conventional house at the same time may walk away with far more. Critics say this denies lower-income families, and especially families of colour, the main way Americans have built wealth.
• Scale. Land trusts produce affordable homes slowly, one property at a time, and in most places they are tiny compared with the need.
• Stewardship costs. Somebody has to monitor leases, help owners who fall behind, manage resales and keep up the land. That costs money for decades.

The answer is not that these concerns are wrong but that they need context. Land trust buyers typically could not have bought at all at market prices, so the comparison is not with a conventional homeowner but with a renter, who builds no equity. Studies of shared-equity homeownership have generally found that buyers keep their homes and build some wealth, and that foreclosure rates were low even during the 2008 crisis, partly because land trusts help owners in trouble. On scale, the honest response is that land trusts are one tool among several, and the fastest way to make housing more affordable everywhere is to build much more of it, which often means changing local zoning and permitting rules that progressives in many cities have been too slow to touch. A land trust works best alongside those changes, not instead of them.

Step by step: forming a land trust

Starting a land trust is a multiyear project. Here is the usual sequence.

1. Build a core group. Five to fifteen people who will meet regularly for a year or more: residents of the neighbourhood you want to serve, a few people with skills in real estate, law, finance or nonprofit management, and representatives of allied groups such as a tenants' association, a congregation or a community development corporation. Residents should lead.
2. Study the need and the market. Gather facts about who is being priced out, what homes cost, what land is vacant or for sale, and which public agencies own property. The local planning department and housing authority publish much of this.
3. Learn from an existing trust. Visit or call a land trust in a nearby city. Grounded Solutions Network offers model bylaws, ground leases and training; borrowing proven documents saves years.
4. Incorporate a nonprofit. File articles of incorporation in your state and apply to the Internal Revenue Service for tax-exempt status under section 501(c)(3), so donations are deductible and you can receive grants. A lawyer, ideally one who volunteers or works for a legal aid or community development clinic, should help. This is general information, not legal advice.
5. Set up the board. Many land trusts use a three-part board: one-third leaseholders who live on trust land, one-third residents of the surrounding community, and one-third public members such as local officials, funders or housing professionals. The balance keeps the trust accountable to residents while bringing in expertise.
6. Write the ground lease and resale formula. These two documents are the heart of the trust. The lease sets the rights and duties of homeowners and the trust; the formula sets the resale price. Start from a model lease and adapt it with legal help.
7. Raise money and find land. Common sources include city and county housing funds, federal HOME and Community Development Block Grant money passed through local governments, state housing finance agencies, foundations, banks meeting their Community Reinvestment Act obligations, and donations of land, especially vacant public lots or tax-foreclosed properties.
8. Acquire the first property. Many trusts start small, with one house or a small rental building, to prove the model.
9. Recruit and prepare buyers. Homebuyer education, credit counselling and a clear explanation of the lease and resale terms are essential. Buyers must understand what they are signing.
10. Steward for the long run. Plan for staff or committed volunteers to manage leases, resales and repairs for decades.

Getting local government on board

City and county governments can make or break a land trust. They own vacant land, control housing funds, set property tax assessments and write the zoning rules. Ask your city council and housing department:

• Will the city transfer vacant or tax-foreclosed lots to the land trust?
• Will it dedicate a share of its housing funds to permanently affordable homes?
• Will the assessor value land trust homes at their restricted resale price, not the market price, for property tax purposes? Several states and cities do this.
• Will zoning allow the trust to build duplexes, small apartment buildings or accessory dwellings, not only single-family houses?

A presentation to the council's housing committee, with residents speaking, is often the turning point.

Rentals, farms and storefronts: land trusts beyond the single house

The most familiar land trust model sells houses to families and leases them the land. But many trusts now hold other kinds of property, and some of the most interesting work in the field is happening there.

• Rental housing. Some trusts own apartment buildings outright and rent them at affordable levels, either managing them directly or partnering with a nonprofit housing developer. This serves families who are not ready or able to buy.
• Limited-equity cooperatives. Residents collectively own a building through a co-op, while the land trust owns the ground beneath it. The co-op gives residents control over their building; the trust's ground lease keeps it affordable.
• Commercial space. In neighbourhoods where rising rents are pushing out longtime businesses, a few land trusts hold storefronts and lease them at stable rents to local shops, restaurants and nonprofits.
• Farmland. Rural land trusts, in the tradition of New Communities, hold farmland and lease it to farmers who could not afford to buy, especially beginning farmers and farmers of colour. Some combine affordability with conservation.
• Community spaces. Gardens, parks and cultural centres held in trust can be protected from sale.

Starting with one of these may make sense for your town. A group of tenants whose building is up for sale might form a co-op with a land trust's help; a farming community might start with a single parcel.

Tenants' rights to purchase: a door some cities have opened

A handful of cities and states have created rules that give tenants, or nonprofits acting with them, a chance to buy a rental building when the owner decides to sell. Washington, D.C., has had such a law for decades, and a few other places have adopted versions in recent years. Rules like these can give a new land trust the chance to acquire a building before it is sold to a speculator, though they work only when there is financing ready to move quickly.

If your city does not have such a rule, it is one of the policy changes a land trust coalition can propose. Others include giving nonprofits a first look at tax-foreclosed properties, dedicating a share of a local housing trust fund to permanently affordable homes, and making sure property tax assessments reflect resale restrictions. Each of these is decided by a city council or a state legislature, and each turns on whether residents show up to ask.

What you can do

• Find who is already working on housing near you. The organizations directory lists housing nonprofits by state, including land trusts, community development groups and tenant organizations.
• Ask your council member one question. Use the representatives lookup for your state legislators, and call your city council office too: does the city have a list of vacant public lots, and would it consider a land trust for them?
• Read up on what drives local prices. The housing and homelessness topic page gathers coverage of rents, zoning and building across the country.
• Hold a first meeting with ten people. Invite neighbours, a congregation, a tenants' group and one person who knows real estate or law, and talk through the steps above.
• Call a working land trust. Ask how it started, what it would do differently, and whether it will share its model documents.