Chapter 1 – Roots of the Community Land Trust

Chapter 1 – Roots of the Community Land Trust

Welcome to Roots of the CLT, the first of
four chapters examining the origins and evolution of the community land trust. My name is John Davis. I’ve been commissioned
by the National Community Land Trust Network to record a talk that I’ve delivered and
revised a number of times since 2006. That year, the Network’s educational affiliate,
the National CLT Academy, held its first three-day training with funding from the Lincoln Institute
of Land Policy. Practitioners came together for a hearty meal of technical know-how. But we had added something unexpected to the
menu. We began with an overview of the CLT’s history and guiding principles. Practitioners may have been drawn to this
training by the chance to feast on the meat and potatoes of organizing and operating a
CLT. But first, they had to eat their vegetables. They were served a generous helping of the
leafy values underlying the model. This historical appetizer came to be known as “Roots of
the CLT.” I’ve divided my talk into four segments
to make it easier to digest. You are encouraged to consume these chapters in sequence, but
there is no reason to do so at a single sitting. “Roots of the CLT” is focused on the model’s
development in a single country. CLTs currently exist in 46 different states, Puerto Rico,
and the District of Columbia. It is important to note, however, that CLTs are now being
established in other countries as well, including England, Australia, Canada, and Belgium. Our search for “Roots of the CLT” will: Examine precedents and pioneers that prepared
the ground for the first CLTs. We’ll also trace the ways in which the model
has changed over the years. There are now over 260 nonprofit corporations
in the United States that either call themselves a “community land trust” or exhibit enough
characteristics of the “classic” CLT that it is fair for us to call them a community
land trust. Much of this growth has happened in the last
twenty years. As you can see from the graph on your screen, the model itself has not been
around very long. The first urban CLT was created in 1981 in
Cincinnati, Ohio. It was started by an ecumenical association of pastors, priests, and nuns
who were worried about gentrification and displacement in their inner-city neighborhood. The first rural CLT was created in southwest
Georgia in 1969. New Communities Inc. was conceived by stalwarts of the Southern Civil
Rights Movement as a vehicle for helping African American farmers and their families to gain
greater security in a turbulent time. But the model’s roots are much older — and
rather tangled. The CLT did not grow out of a single tradition.
It was seeded and nurtured by people from the single-tax movement, the peace movement,
the civil rights movement, and activists creating agricultural co-ops or planning more livable
cities. The story of the model’s origins is as messy
and multi-faceted as the picture on your screen. I’m going to tell a simpler tale. Understand,
this is my own biased, idiosyncratic selection of people, places, and connections. Someone
else might spin this yarn a different way. I’m going to sort the defining characteristics
of the CLT into three clusters and then say how each of them came to be grafted onto the
green and growing trunk of the CLT. There are characteristics related to the distinctive
way in which a CLT handles the ownership of land and buildings. There is a distinctive way in which the CLT
is structured, organizationally. And what the organization does with its property
is distinctive as well — who it serves and how it operates. Among the organizations called a CLT, there
is enormous diversity in name, purpose, and structure. Yet all CLTs are rooted in a common
history and share a number of features. I’m going to focus on these commonalities, while
acknowledging that many variations exist. Not all CLTs are the same. Let’s start by seeing how CLT’s deal with
the possession and use of real property: A nonprofit corporation holds and manages
scattered parcels of land on behalf of a place-based community, with the intent of owning this
land forever. Any buildings are sold off to homeowners,
cooperatives, nonprofits, or other corporations or individuals. These structures may already
exist when the CLT acquires the land — or they may be constructed, years later. A ground lease knits these ownership interests
together. This is not your typical landlord tenant agreement.
The CLT ground lease lasts for a very long time, often 99 years. It is mortgage-able,
inheritable, and protects — and balances — the interests of BOTH parties. By the way, when we talk about structural
improvements on a CLT’s lands, we are not only referring to detached, single-family
houses, like the one pictured here. Multi-unit condominiums, cooperatives, and
rental housing have been developed on land that is leased from a CLT. So have mobile
home parks, shelters, and housing for persons with special needs. And housing is not the only use for a CLT’s
lands. CLTs have sponsored community centers and service facilities, community gardens
and urban farms; offices, stores, and other commercial buildings. Anything you can build on land, anything you
can do with land has been done using this unusual model of tenure that combines community
ownership of land with individual ownership of buildings. Dual ownership is a defining characteristic
of what is often called the “classic” CLT. But a number of variations have appeared
over the years. CLTs that do rental housing sometimes end
up owning BOTH the land and the building. CLTs doing condominiums sometimes own NEITHER
the land nor the building, making use of affordability covenants, instead. Other variations arise when local CLTs tailor
the “model CLT ground lease” to fit conditions and priorities in their own communities. Here’s the next cluster of characteristics.
There are three organizational features that allow us to call a leased-land arrangement
a “community land trust.” They put the “C” in CLT: The landowner has “trust” in its name,
but it is not legally a real estate trust. It is a nonprofit corporation, no different
than any other nonprofit established under a state’s corporate statutes. The CLT has a voting membership that is drawn
from a service area that can be as small as a single neighborhood or as large as an entire
city or multi-county region. That membership is empowered to elect a board
that maintains a balance of interests among different constituencies. In the “classic CLT,” seats on the governing
board are divided equally among three interest groups: * directors who represent people living on
a CLT’s land, both homeowners and renters; * directors who represent residents living
around — but not on — the CLT’s land; and * directors representing institutions like
local churches, local government, businesses, banks, or various nonprofits in the neighborhood.
A majority of CLTs have adopted this organizational form, but there are variations here as well.
The most common, in recent years, have been CLTs that are not created from scratch as
new nonprofits. Instead, they are grafted onto a pre-existing organization like a Community
Development Corporation or a Habitat for Humanity affiliate. This has been done in a variety of ways, either
by incubating the CLT under the corporate umbrella of an existing nonprofit and later
spinning it off; or by amending the nonprofit’s bylaws and converting it into a CLT; or by
operating the CLT permanently as a corporate subsidiary or internal program. And, as I’ve already mentioned, CLTs are
frequently combined with other models of private, nonmarket housing, especially those at the
homeownership end of this continuum, a family of tenures that I named years ago “shared
equity homeownership.” These hybrids represent organizational variations all their own. Finally, let’s look at the distinctive way
that CLTs are operated. There is an emphasis on serving people of
limited means, while carrying out other activities recognized as “charitable” by the IRS
under Section 501(c)(3) of the tax code. There is an emphasis on maintaining the permanent
affordability of housing and other structural improvements on a CLT’s land. And there is an emphasis on keeping homes
in good repair and making sure they’re not lost to foreclosure. CLTs stand behind the
housing they’ve created; and stand behind the people they’ve helped. Especially when creating homeownership opportunities
for low-income people, CLTs are committed to making sure these opportunities last — and
are NOT eroded by the boom and bust of a volatile economy. They are made to last by an operational
commitment to what CLTs have come to call the “three faces of stewardship.” This long-term commitment forces every CLT
to look for an equitable BALANCE between competing goods and goals. A CLT wants to preserve affordability
for future generations, while allowing the present generation to build wealth. A CLT
wants to respect the privacy and independence of the people who live on its land, while
retaining the right to intervene if homes are not kept in good repair, if aging systems
are not replaced; if mortgage payments are not made, risking foreclosure. Different CLTs handle these trade-offs in
different ways, introducing many variations in how they operate and who they serve. Despite their diversity, what all CLTs have
in common is an operational commitment to staying in the picture long after a parcel
of land is acquired; long after development is done. This durable commitment to the sustainability
of the opportunities it has worked so hard to create is the CLT’s forte; stewardship
is what a CLT does best. In the words of Connie Chavez, “We are the developer that doesn’t
go away.” This intersecting cluster of characteristics
has the effect of transforming a CLT’s lands — and what’s developed on them — from
being market commodities that enrich a fortunate few to becoming shared resources that are
held and managed by a nonprofit steward for the benefit of a larger community, present
and future. This is a far cry, of course, from the way
that land and housing are typically handled in the United States. Speculation, not stewardship,
has ruled from the very beginning. Many of our nation’s “founding fathers”
built their fortunes by accumulating land in the path of development, anticipating where
people would settle and how a town might grow. Some of them became revolutionaries, in part,
because they resented the Crown’s interference in their get-rich land schemes west of the
Allegheny Mountains. The roster of American land speculators is crowded with the names
of such luminaries as Benjamin Franklin, Patrick Henry, and George Washington. Remember, the
“Father of our Country” was a land surveyor and speculator long before he won fame as
a solider. So deeply ingrained and widely practiced is
this notion of an individual’s inalienable right to claim for himself all the land he
can grab that Thorstein Veblen, our greatest homegrown political economist, suggested that
speculation, not baseball, is really our national pastime. He dubbed land speculation the “Great
American Game.” The CLT is part of a different tradition,
where land is viewed as our common heritage; where gains in value are seen as social products
of a community’s investment and growth; where current use trumps future speculation. This is an “ethic of stewardship,” that
is overshadowed and often forgotten. But it is rooted as deeply in American culture as
our national passion for accumulation and speculation . . . a story I’ll tell in the
next chapter. One final note, before we delve more deeply
into the CLT’s history. This presentation is a non-commercial work-in-progress, with
images and ideas I have borrowed from many sources, for the sole purpose of educating
a community of colleagues. If you notice major omissions or mistakes, please point them out.
I would welcome your suggestions for improvement. My address is posted on your screen.

Author: Kennedi Daugherty

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