What is a Community Land Trust?
Community Land Trusts (CLTs) create affordable housing while still allowing low and moderate income residents to build equity as homeowners. Moreover, because CLTs retain ownership of the underlying land, CLT housing remains permanently affordable, even as the original beneficiaries of an affordable home price sell and move on. This long-term, continuing benefit makes CLTs an especially efficient use of affordable housing subsidies.
By locking in permanent access to affordable housing, CLTs play an important role by bringing balance to areas with large amounts of market-rate development.
What is Affordable Housing?
According to the U.S. Dept. of Housing & Urban Development (HUD) housing is affordable when the occupant(s) is/are paying no more than 30 percent of his or her income for housing costs. Generally, “affordable housing” refers to housing that is affordable (based on the above 30% metric) to households at or below a certain level of Area Median Income.
Area Median Income (AMI) is updated annually by HUD. The Pittsburgh Metro Area’s AMI for 2016 is $71,200 for a family of 4.
Typically, affordable housing for homeowners is deemed affordable when it is available to households who earn 80% or less of the Area Median Income for their family size. Similarly, affordable rental housing is deemed affordable when it is available to households who earn 50% or less of the Area Median Income for their family size.
How does it work?
Community Land Trusts (CLTs) are nonprofit initiatives governed by a board of CLT residents, community members, and public representatives that provide permanently affordable housing opportunities. CLTs exist in 45 states and the District of Columbia. The heart of CLT’s work is the creation of homes that remain affordable for generations to come. CLTs are a proven tool to maintain and provide economic diversity, preserving the authenticity of Lawrenceville.
While typical subsidies for affordable housing, such as second deferred mortgages, can create affordability for a decade or so, the CLT model creates permanent affordability, preserving the initial subsidy in perpetuity.
The CLT model limits homeowner equity in order to ensure long-term affordability—a typical trade-off as every dollar of equity is gained in exchange for a dollar of affordability. However, CLT homeownership still builds equity.
CLT homes represent the first rung in the ladder of homeownership and the Lawrenceville Corporation seeks to build the ladder!