HOW DOES A CLT WORK?
In the conventional market, the homeowner owns both their house and the land underneath it. In the community land trust model, the homeowner owns the house and the community land trust owns the land. Much like a rental lease, a ground lease outlines the rights and responsibilities of the homeowner and landowner. The CLT retains an option to repurchase the homes located upon its land, should the owners ever choose to sell. The resale price is set by a formula, which is contained in the ground lease, and is designed to give the present homeowners a fair return on their investment and future homeowners fair access to housing at an affordable price. In practical terms, here is an example of how it would work: The CLT will acquire a home appraised, for example, at $225,000. The CLT will retain ownership of the land and lease the land to the homeowner at no cost for 99 years. In a home appraised at $225,000, the land value would be approximately $75,000. The homeowner would then purchase the
