A community land trust (CLT) is a non-profit community based organization that provides permanently affordable homeownership opportunities to families of low and moderate income. A CLT acquires land and legally separates ownership of the buildings (homes) from ownership of the land. Homebuyers in CLT programs purchase only the house and all the improvements and enter into a renewable 99-year ground lease for exclusive use of the land.
Removing the cost of the land from the transaction makes the home more affordable for the initial buyer. A resale formula in the ground lease sets the future sales price thereby ensuring the home will be affordable to all subsequent homebuyers.
$8.5 Million CLT of PBC Property Value at Purchase
$9.9 Million CLT of PBC Property Value in 2019
$1.4 Million Increase in Value
$1.24 Million retained for future affordability with
$3.45 Million initially invested that is a:
36.8% Return on Community Investment
Without CLT of PBC's resale restrictions only 38% of homes that are presently affordable would remain affordable to the 80% of AMI category.
As residential values in Palm Beach County continue to increase and incomes remain stagnant, without resale restricted homes larger affordability investments will be necessary to provide affordable home buying opportunities to low-income homebuyers. For example, in 2014 a CLT of PBC homeowner purchased a home for $110,500. The home’s market value was $136,000 at the time of purchase. By 2019 that home was worth $177,508 per Zillow’s Zestimate.
Having been in the home just under 5 years, 10% of the appreciation, or $4,150, would be reserved for the homeowner.
The value of the original $25,500 affordability investment made in 2014 grew to $62,857.
Although the market value increased over 30% the home remains affordable for the next homeowner with a $114,650 purchase price.