What is a CLT?
Community Land Trusts are a for-purpose development model focussed on key community needs. A CLT embeds perpetual affordability, sustainability and land stewardship into its core purpose.
The CLT uses a carefully-calculated, capped resale formula to determine the value of the house and land. This helps ensure that the price of housing remains far more aligned with the reality of wage growth and the rising cost of living.
Lower land and housing costs free up time for residents to tend to their home, nurture the land it sits on, and contribute to their community in meaningful ways.
Potential homeowners who are interested in joining a CLT are able to save a much smaller deposit than the broader market currently demands. By removing speculative profit from the equation, and reinforcing this with a solid constitution, land and housing are preserved for future generations.
CLT Governance
A CLT is a not-for-profit legal entity that acts as a custodian for land, managing it to ensure perpetual affordability.
CLTs engage in deliberative development with potential residents to ensure that the most suitable and sustainable housing forms are produced and maintained.
A CLT has a typical board structure of ⅓ residents, ⅓ neighbours and ⅓ civic-minded individuals (eg. former councillors, academics), who come together to ensure that the land is managed with a long-term perspective for the good of the community.
It is important that CLTs have a strong board structure with both residents and non-residents involved to ensure transparency.
CLT Impacts
Research indicates that CLTs:
- Deliver value for money: whilst not all CLTs and community-led homes receive public investment of land or capital, those that do have been shown to deliver $1.8 of benefit for every $1 invested, rising to $2.70 when health, wellbeing and income distribution benefits are factored in. This increases to $3.10 over 30 years.
- Have been built to high environmental standards: CLTs embrace modern methods of construction such that building plans have been estimated to reduce CO2 emissions by 15-50%. Annual household energy costs were reduced by $260 – $1300 when measured against a typical UK house.
- Are more resilient to downturns in the housing market: the U.S foreclosure rate for CLT homeowners was one-eighth the national average in 2010, and during the COVID-19 crisis, homeowners with market-based loans were over 8 times more likely to face delinquency and foreclosure than CLT homeowners.
- Reduce planning risk by countering NIMBYism: CLTs can often gain local support for new development where private developers fail.
CLT Best Practices
- Recognition that land and housing is a fundamental human right.
- A strong constitution that protects the stewardship of the land.
- Easy entry and exit for homeowners.
- Full transparency at all stages of the process.
- A commitment to personal development, so that regenerative practices can be maximised across our environmental, economic and social interactions.
