Several years ago, a North Florida couple, Susan and Luke, watched their child fall very ill and the medical bills pile up. They lost their property and moved into a mobile home. They knew, like so many Americans, that owning a home again would be the key to rebuilding their wealth, but the American homeownership system tends to favor those who already have means. For people like Susan and Luke, who experienced significant financial loss, it’s nearly impossible to secure a mortgage.
But there are ways around the housing market’s high bar to entry, and one of them is a community land trust–a nonprofit housing system that buys up land and places it into community development for the purpose of ensuring long-term affordability. The CLT owns the land, and either sells or rents out properties on the land to low-income families at rates tied to median incomes, not market prices. If someone owns a home that’s part of a CLT and decides to sell it, they also have to peg the resale price to the affordability metrics determined by the CLT, not for their own personal profit.
Despite the successes of the model in ensuring long-term affordability in communities, even those that are rapidly gentrifying, political efforts and funding have traditionally gone toward lowering the bar to entry for market-based homes, and “CLT homes make up a negligible portion of the national housing stock,” according to the Center for American Progress. But there did happen to be a CLT in Florida, and Susan and Luke enrolled in the South Florida Community Land Trust‘s rent-to-own program, and after two years, own their home in the CLT.
The SFCLT launched in 2006 in response to the housing boom and rapidly declining affordability, says its CEO Mandy Bartle. A task force assembled in the Miami-Dade area in 2005 to address the question of how best to retain affordability amid rising rents, and “over 300 people representing 100 different industries–banks, government, nonprofit, realtors–recognized that the community land trust model should be a priority,” Bartle says. But even after that many industries agreed on the potential of CLTs, there are still only just over 250 established in the U.S. and most are quite small–SFCLT, for instance, contains just 63 homes.
Now, though, there’s potential for those numbers to rise. Citi Community Development, the bank’s financial inclusion arm, and Grounded Solutions Network, the umbrella nonprofit for U.S. CLTs, are launching an accelerator program specifically to scale up existing CLTs, and provide start-up support to ones not yet established. With a $1 million investment from Citi Community Development, Grounded Solutions Network will be able to expand the technical assistance it offers to CLTs in every stage of development, and build out new tools to encourage city governments and community groups to establish CLTs.
While $1 million may not seem like a lot to get an accelerator program up and running, when it comes to affordable housing development and preservation, it’s often more a matter of resource allocation than resource availability. Alongside the Citi/Grounded Solutions Network CLT Accelerator, Grounded Solutions will also administer grants from a $500,000 pool to new CLTs in need of funds to begin residential real estate development. Once those CLTs are established, the idea is that they will be able to benefit from the accelerator’s technical assistance training and resources to scale.
“Affordable housing is simply the lead issue for us,” says Bob Annibale, Global Director of Citi Community Development and Inclusive Finance. “Community land trusts offer an opportunity that hasn’t really been looked at enough.” Homeownership, he adds, has become a proxy for wealth in the U.S. For many potential first-time homeowners or those like Susan and Luke, who have faced financial setbacks, what was once a hallmark of the American Dream is increasingly difficult to realize: According to the U.S. Census Bureau, homeownership rates among households living on lower incomes stand at 50.2%–significantly lower than the national rate of 64.2%. “CLTs provide that entry point,” Annibale adds.
Since 2014, Citi Community Development has invested nearly $5 million in CLT projects across America, most recently backing New York’s first city-wide iteration, Interboro CLT. And back in Florida, Citi seeded $500,000 to the South Florida Community Land Trust to establish the first equity fund for CLTs in the country. (The irony is, of course, that Citi itself was one of the major banks responsible for the mortgage crisis, and ended up paying a $7 billion fine).
But the accelerator isn’t just intended as a tool for nonprofits. “Citi has the advantage of having close relationships with municipalities,” Annibale says. Through the accelerator program, he hopes to grow awareness of CLTs within city governments. “They can be very important partners–they often hold property, and can cede that land to the trust,” he adds. Since 2014, for instance, New York City has sold over 200 vacant lots to for-profit developers for $1 apiece. That land could have instead been offered to a CLT.
Raising awareness of CLTs at the national level while building up their capacity and numbers “offers an opportunity for mayors and local government leaders to consider what they can manage and control,” Annibale says. As housing remains unaffordable for so many in cities and existing strategies continue to fall short, he thinks of the accelerator as a way to hand local governments a tool they need to learn now to use–and potentially, the means by which this fringe but highly functional housing model can go more mainstream.