COMMUNITY DEVELOPMENT INVESTING: Spring 2002
SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING
Institute for Community Economics
Published, Spring 2002
By Eric Yates
Just five years ago, Christine Grant found herself at a crossroads - newly divorced
and completing her college degree, with three children living at home and no job
or savings. "Buying a house was out of the question," she remembers. A friend
recommended she talk to the Cheshire Housing Trust, a community land trust
based in Keene, New Hampshire. Within a year, the Cheshire Housing Trust,
in collaboration with the NH Housing Finance Authority, arranged a plan whereby
Christine and her family could live in and rent a home while part of the monthly
payment went into a separate fund toward the down payment. Today, Christine
says, "I am now the very proud owner of a lovely home … that, were it not a part of
a community land trust, I would not have been able to rent, let alone own."
Christine's story is a familiar one to many residents of community land trusts
(CLTs) throughout the country. The concept is a simple one: an initial public
or private subsidy allows the CLT to purchase property at a reduced price.
The CLT retains ownership of the land, taking it out of the purchase price and
selling the house at a reduced cost to a low-income homebuyer. The buyer
owns the home, and the CLT retains the land. If the homeowner decides to
sell, he or she shares any appreciation with the land trust, allowing the land
trust to preserve the home's affordability for another renewable 99-year period.
The CLT buyer, typically someone who never dreamed of owning a home, gets
the advantages of homeownership: tax benefits, long-term security, equity
appreciation, and the simple delight of making a house a home - all while
paying a mortgage that is often lower than rent.
Arguably, no other affordable homeownership tool is as long-lasting and empowering
as the CLT, a democratically controlled nonprofit organization that owns real estate
to make land and housing affordable for community residents who cannot otherwise
afford them. Initially considered a radical concept when the founders of the Institute
for Community Economics (ICE) created the model 30 years ago, there are now nearly
120 and county CLTs nation-wide due to ICE's other initiatives. The Cheshire Housing
Trust is just one of the land trusts ICE supports and has helped to develop since it
established a Revolving Loan Fund in response to local housing organizations need
for capital to acquire and develop property. Funds from ICE's loan fund assist CLTs,
equity cooperatives, and community-based nonprofit organizations to finance the
acquisition or improvement of land or the acquisition, construction, and rehabilitation
of housing. Since its founding in 1979, ICE's loan fund has loaned over $37 million
to more than 400 nonprofit borrowers in 30 states.
In addition, ICE's highly experienced technical assistance providers help CLTs nationwide
to develop initiatives and train CLT boards, staff, and residents. Also, ICE collaborates
with approximately 120 grassroots leaders on the CLT Network, a national advocacy
and networking coalition of existing and emerging CLTs.
Today, the size and number of CLTs is growing dramatically around the country, and
many of them address local issues beyond housing: the environment, urban sprawl,
economic development, sustainable agriculture, and preserving cultural heritage. In
this way, ICE has brought a multi-faceted and multi-impact approach to the community
development movement as it works to secure affordable housing for future generations.
For more information, please contact Eric Yates at (413) 746-8660, ext. 106.
Through our Community Development Investment Service, Walden clients have invested $7.1 million in community development banks, credit unions, and loan funds. We are pleased to have included the Institute for Community Economics in this service.
The information contained herein has been prepared from sources and data we believe to be reliable, but we make no guarantee as to its adequacy, accuracy, timeliness or completeness. We cannot and do not guarantee the suitability or profitability of any particular investment. No information herein is intended as an offer or solicitation of an offer to sell or buy, or as a sponsorship of any company, security, or fund. Neither Walden nor any of its contributors make any representations about the suitability of the information contained herein. Opinions expressed herein are subject to change without notice. The writings of authors do not necessarily represent the views of Walden Asset Management, its parent, or affiliated entities. There are certain risks involved with investing, including various risks depending on the type of investment vehicle being used.
© 2011 Walden Asset Management
A Division of Boston Trust & Investment Management Company
One Beacon Street | 33rd Floor | Boston, Massachusetts 02108 | 617.726.7250