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Could Community Land Trusts be the Answer to the Lack of Affordable Housing? - Real Estate and Land Use News

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Real Estate and Land Use News


Posted on: Jan 28, 2021

By April Pyatt

Community Land Trusts are community-controlled organizations (typically organized as nonprofit corporations) which own and control land on behalf of a place-based community. In order to provide for permanent affordable housing in the community, the Community Land Trust retains permanent ownership of the land and sells the residential building improvements thereon separately to the homeowner. The purchase price is more affordable for the homeowner because the homeowner is purchasing only the building improvements and not the land. The homeowner leases the land from the Community Land Trust via a long-term, renewable ground lease (frequently 99 years). The resale purchase price upon which the home may be sold by the homeowner in the future is restricted in order to ensure the continued affordability of the home. This dual ownership model is intended to prevent market factors from causing housing prices in the community to increase significantly and to help guarantee permanent affordable housing in the community. Currently, there are approximately 277 Community Land Trusts operating across the United States.

There is currently no legislation in place in Indiana establishing or governing Community Land Trusts. Several considerations would need to be addressed in order to determine whether the Community Land Trust model for affordable housing described above is feasible in Indiana. Among other things, a determination would need to be made as to whether: (1) the homeowner, as owner of only the residential building improvements and not the land, is eligible for the homestead credit, and (2) the separate ownership of the land and the residential building improvements, and the restriction on the resale price for the home, would be taken into account by the real property tax assessor in order to ensure a reasonable assessed value for the homeowner. The foregoing matters may need to be addressed or clarified via a legislative fix.  

More information about Community Land Trusts and the HFA Indy Community Land Trust Coalition, an organization established to maintain and expand permanent affordable housing in Indianapolis, can be found here.

If you would like to submit content or write an article for the Real Estate & Land Use Section, please email Kara Sikorski at ksikorski@indybar.org.

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