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, like Lawrenceville.
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 2017 is $72,600 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!
The Lawrenceville Community Land Trust promotes, expands, and preserves permanently affordable housing opportunities. The work of the Lawrenceville CLT is guided by the following values:
- Participatory and Representative Governance: The CLT and its work must be informed and be endorsed by our community. Thoughtful constituent engagement must be central to our efforts.
- Market Balance: The CLT must increase the supply of affordable housing.
- High Quality Design: The CLT must push the neighborhood’s housing market to a new level of sustainable construction and living standards. It is imperative that the CLT produce high-quality, energy efficient homes that provide moderate income homebuyers the best chance for housing stability and long term success.
In 2015 Lawrenceville Corporation took part in a regional CLT feasibility study funded by the Heinz Endowments. The recommendation of that study was clear: the Pittsburgh region is in desperate need of more tools in the affordable housing tool box, and CLTs can and should be one of them. This recommendation was later sanctioned by the City’s Affordable Housing Task Force, which explicitly recommended CLTs as a tool for the region.
Having solved for many of the variables that so often plague community based housing development, LC stepped forward to pilot CLT homeownership in Pittsburgh. In July of 2015, LC’s board officially pivoted our Real Estate business line to create the first CLT in Western Pennsylvania.
Beginning with a key planning grant in late 2015, LC, under the guidance of national CLT expert Michael Brown of Burlington Associates, assembled a CLT Advisory Board comprised of neighborhood residents, business owners, and LC and LU staff to think through the myriad of questions every start-up CLT must answer. The 2017 groundbreak for our first 7 CLT homes marks the culmination of two years of visionary and participatory planning.
In addition to our work in Lawrenceville, LC continues to play a key role in the regional CLT conversation by participating in the Board of Directors of Common Ground: The Pittsburgh Regional CLT.
In 2016, the City of Pittsburgh and the Heinz Endowments worked together on the p4 initiative and its Performance Measures: “Particular attention was given over the past year to the performance measures project, which established a quantifiable system of metrics to assess development efforts based on the p4 themes and to set priorities for public financing and public/private partnership investments.”
In a Community Land Trust, the subsidy is locked in to the home, not given to the buyer directly. This creates permanent affordability, because instead of just increasing the first buyer’s purchasing power, the subsidy is combined with the resale formula, which decreases the cost of the home forever. This allows future buyers to benefit from the same initial subsidy. See this infographic for a visual representation.
More details and pictures of LC’s CLT work in 2016.
The most recent draft of the CLT design guidelines, developed in partnership with architect Rothschild Doyno Collaborative. The guidelines ensure that the CLT homes are part of a replicable model, in our neighborhood and beyond.