America is in the midst of an epidemic. Rising home prices has increased the prices of rental properties, creating a general lack of affordable housing in this country. Historically, it has been argued that Americans should not spend more than 30% of their income on rent or mortgage and utilities. However, according to Harvard’s Joint Center for Housing Studies, nearly half of renters were paying over 30% of their income for housing and utilities before the COVID-19 pandemic started in January 2020. Of those, 10.9 million households were severely burdened, paying more than 50% of their incomes for housing.
Research from the NLIHC has shown that people of color are more likely than white households to be extremely low-income renters – those with incomes at or below the poverty level, or 30% of their area median income. Twenty percent of Black households, 18% of American Indian or Alaska Native (AIAN) households, and 16% of Hispanic households are extremely low-income renters, while only 6% of white non-Hispanic households are extremely low-income renters. One STL asserts that in 2019, 21.2% of Black individuals were in poverty compared to 7% of White individuals in St. Louis. As staggering as these numbers are, they are not surprising.
In Missouri, and St. Louis specifically, community land trusts have taken root in an attempt to help quell the affordable housing crisis and address the racial disparities in home ownership. A community land trust (CLT) is a nonprofit organization that strives to create equity among citizens and develop community wealth by ensuring that those who live and work in their communities are able to do so at an affordable rate. They can be used for private home ownership and/or commercial space, and emphasize community ownership and involvement. There are several CLTs operating in St. Louis and many in Missouri, with between 220 and 277 operating nationwide.
Starting a CLT in an effort to create more affordable housing stock can be overwhelming, but determining when and if a community is ready for change is often the most important part. It is recommended to bring as many people to the discussion as possible. This should include those with lived experience, community activists and/or leaders and those in city and county offices.
While a CLT can use several different models, it’s most well known for its ability to provide permanent affordable housing. The CLT can also be implemented via a plot of land for agriculture use (i.e.-a community garden), a rental property (either single family or multi-family), or even a space for a business.
One of the most unique things about CLTs is the separation of land from the ownership of any buildings on the property. The CLT maintains ownership of the land to allow for continued use at below market rates. The tenant enters into a lease that can be renewed indefinitely to allow for long-term housing affordability, typically, through a ground lease. The separation of land and building allows the homeowners and businesses to have security as owners of the building, and the community the assurance that when the land changes hands it stays affordable and in community-serving uses.
In practice CLTs allow for affordable housing ownership in the long term. This has the potential to create wealth for those who would not otherwise have the opportunity to obtain it, creating generational wealth and lifting otherwise marginalized people out of poverty. Georgetown Law advises that cities and counties can support and promote CLTs by:
- Supporting CLT planning and business development processes;
- Providing technical assistance and training;
- Amending laws to ensure that the CLT-model is compatible with funding sources, regulatory programs, and housing policies (e.g., tax law, inclusionary zoning);
- Creating preferences for CLTs in grant and loan programs, and providing direct cash subsidies or loan guarantees;
- Streamlining administrative processes and providing regulatory concessions (e.g., waiving application and impact fees, relaxing zoning requirements);
- Providing city-owned or tax-foreclosed land to CLTs through donations or below-market sales; and
- Adjusting tax assessments for CLT-owned properties to ensure fairness for shared-equity homeowners.
People have power and when we organize, we can affect change. A community land trust is the result of people coming together to create positive change in their communities. Empower Missouri supports the use of CLTs and encourages you to reach out to your local community members and leaders to explore their use in your area.