SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING

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.