Title
Community Land Trust Model
Description
This report provides the Economic Development and Equity Subcommittee with information about the community land trust model.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Report
Summary
On June 16, 2020, the City Council approved the Housing Phoenix Plan consisting of nine policy initiatives to create or preserve 50,000 homes by 2030. Initiative 7: Expand Efforts to Preserve Existing Housing Stock includes four components: component A Land Banking, component B Implement Community Land Trust (CLT) Progam, component C Implement Landlord Incentives and Resources, component D Expand the Rental Rehabilitation Program. This report will focus on component B: Implement Community Land Trust Program.
In a typical CLT model, the CLT acquires the property with the home, rehabilitates the home, then sells the home to an income eligible homebuyer. The land is placed in a trust and the homebuyer mortgages the amount needed to purchase the house, not the land. This reduces the overall cost to the homebuyer. The homeowner pays a nominal lease fee to the trust while owning the home. When the homeowner decides to move, the trust has the first right to purchase the home at fair market value. The trust will purchase the home, perform any necessary rehabilitation, and sell to another income eligible homebuyer. This model creates an opportunity for income eligible households to participate in homeownership, ensures long-term affordability by maintaining ownership of the land, and homes remain in the trust into perpetuity. The land is held in trust, generally with a 99-year renewable lease.
There are more than 225 CLTs in the United States and with five located in Arizona. Each CLT may have unique stewardship and board composition. Additionally, program eligibility requirements and pre-requisites such as homebuyer education courses may vary across CLT programs. The CLT model and purpose remain consistent; to ensure long-term homeownership affordability.
As outlined in the Housing Phoenix Plan, staff are working to establish a CLT within the City of Phoenix to increase homeownership opportunities through a partnership with an existing CLT.
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.