1. Starting a CLT: Organizational &Operational Choices
In this section, we’re going to go over the basics of a community land trust - what is its mission, how is it structured and what it does.
Brussels – July, 2013
Presented by Tony Pickett

2. Quick Overview of the “Classic” CLT
So in the next hour we are going to discuss the Organizational and Structural characterstics of CLTs, including the classic CLT model versus variations on the model…these are the decisions that every group, organization, or entity must consider when they are establishing a CLT.
PART 1
Quick Overview of the “Classic” CLT

3. What is a Community Land Trust?
A CLT owns and stewards land for the common good in perpetuity, by providing:
Affordable housing
Commercial spaces
Community Services
Farming or open land
So based upon the video or Julie’s introduction, how would you define a CLT? What are some unique qualities you saw of the CLT in the video?
[CLICK] A CLT is an organization whose mission is to own and steward land for the common good FOREVER – PERMANENTLY – In PERPETUITY.
[CLICK] A variety of things can happen on this land, depending on the community’s needs and priorities, including
Affordable housing
Commercial spaces
Community services-this often includes the leasing commercial spaces to non-profits or businesses that would be perceived as community assets; however, it also includes providing services to residents, such as financial literacy classes
Land for green space or urban agriculture—Community land trusts and conservation land trusts have this in common.

4. How are CLT organizations structured?
Generally Non-Profit 501(c)3:
Community based
Membership organization
Tri-partite governance
Defined service area
Sustainable - perpetual responsibility
Generally, CLTs are non-profit 501(c)3 organizations that have several common characteristics:
They are community based,
Democratically-governed membership organizations
They have a tri-partite governance structureo similar to CDCs. But rather than 1/3 low income representation they have 1/3 CLT leaseholders, along with 1/3 community members, and 1/3 public representatives.
They have a defined service are
and a mission to steward the land they hold – FOREVER (we’ll keep coming back to this). It is almost as much about stewardship as land ownership in the end. One of the fundamental things that makes a CLT different from other forms of affordable housing entities is its willingness to take a longer term view of stewardship of its assets.

5. How are CLT properties structured?
Dual Ownership
Individual owns the improvements (home) and the leasehold right
Community Land Trust owns the land
So, how does it work. A CLT separates the ownership of the land from ownership of the building, – they create two separate parcels of real property.
They then sell the “improvement” (or house) to the homebuyer, and they keep the land – FOREVER.

6. How are CLT properties structured?
Dual Ownership
Ground Lease ties house & land together
And the ground lease is the legal instrument that ties to the two together.
You wouldn’t want to buy a house on land you didn’t own without certain protections and guarantees
and likewise you wouldn’t want to allow someone to build a house on your property without certain assurances.
The ground lease protects both parties and outlines the legal agreement between the two. It also establishes the allowed uses, contains provisions about financing, insurance etc.

7. How is perpetual affordability structured?
Resale-Restrictions
And the hallmark of the ground lease is that it is the tool through which we maintain PERPETUAL affordability.
Dual ownership results in the home being more affordable because the lower income buyer is only purchasing the improvements and not the land. That’s because the CLT has gotten grants and donations to purchase the land and subsidize the intial sales price.
And the ground lease keeps the price affordable through resale-restrictions that 1) restricts selling the home to another lower income household, and 2) restricts the price for which the home may be sold in order to ensure it will be affordable to the next buyer. That is done with a resale formula.
The result is that resale after resale the home remains permanently affordable for lower income buyer after buyer forever.
Forever or permanently; however, is a very long time!
Lower Price at Every Resale
Lower Price at Resale
Lower Price At First Sale

8. Perpetual Affordability = Perpetual Responsibility
1. Long Term Maintenance
2. Sustainable Organizations
Along with that perpetual affordability comes perpetual responsibility for the Community land trust, who we often refer to as the “Steward,” because their job is to be a good steward by abiding by the mission to keep land that serves community’s interests forever and to ensure that homes remain permanently affordable.
This stewardship responsibility is large one, which requires resources to make sure their homes and properties are wlel maintained and maintain their affordability for the target market.
Consequently, CLTs must be strategic when they are requesting funding and working out their business plan to ensure they can meet this ongoing responsibility.
Those business plans typically consider:
how the CLT may generative revenue,
what funding they will need from public and private sources to both develop homes and conduct their stewardship activities,
what partnerships and in-house staff they need to efficiently accomplish these goals.

9. Organization Choices: Classic v. Variations
What I’ve just explained is some of the basic components of a “classic” CLT. However, there are many variations on that theme that people have incorporated into their CLT structure.
PART 2
Organization Choices: Classic v. Variations

10. Variation on a Theme Organizational Landscape Existing Development
Funder Priorities
Unfamiliar Model
Regional Opportunities
However, many factors may influence whether you choose to go with a classic CLT components or whether variations may be more practical. Some of these factors that affects theses decisions are up here.
For instance, you need to evaluate local organizational capacity to decide whether to start a new organization or house the CLT in an existing organization.
The kinds of homes or properties you develop depends on the local market and needs.
Obviously, funding opportunities, the cultural context and the acceptance of the CLT model will also impact development plans for the CLT.
But when you’re creating your community land trust, it is important to understand the philosophy behind various aspects of a CLT first, so you understand the implications of the various choices you’ll have to make.

11. Organizational Choices
Sponsorship
Governance
Service Area
Beneficiaries
Development Strategy
Development Type
There is a laundry list of choices you’ll have to make in starting a CLT. We will take them one at time and consider the classic CLT and the option for variations.

12. 1. The Organization/Sponsor
Grassroots Non-profit
Variations:
Government Sponsorship
Existing Non-Profit Sponsorship
Employer Sponsorship
First, you’ll need to decide if you’re going to start a new organization (grass roots start up), or if it makes more sense to partner with a local government or existing non-profit.
So let’s look at each of these, and I’m going to ask you what you think are the upsides and downside of having the CLT each one of these organizational types.

13. Grassroots Sponsorship
Create a New Non-Profit
Pros:
Community Acceptance/Legitimacy
Understanding of the local market
No political baggage
Cons:
Capacity building
Credibility
Competition for funding
So what are the pros and cons of grassroots sponsorship to develop a CLT?
Pros:
Community Acceptance/Legitimacy
Understanding of the local market
No political baggage
Cons:
Capacity building
Credibility
Competition for funding
The grass roots start up has an appeal of purity – you can incorporate all the original tenants of a CLT from the beginning. But it often takes years to establish a new group and significant resources to maintain it over time. So it might make more sense in your community to consider an alternative.
CLT is formed by community activists
OPAL CLT
Kulshan CLT

14. Government Sponsorship
Operate as a Governmental Program
Pros:
Financial support
Staff support
Legitimacy
Cons:
Suspicion of government
Political affiliation
Top-down development
Bureaucracy
So what are the pros and cons of a government agency starting a CLT?
Pro:
Financial support,
staff support,
Legitimacy
Con:
Suspicion of gov
Political affiliation,
top-down,
Bureaucracy
CLTs formed by government are vulnerable to changing political winds. They also tend to value community input and community organizing for local support less than you community based non-profit. However, if the political will is there, they tend to bring established policies and infrastructure and skills with federal funding to the table.
CLT is formed by local government
Ex: Champlain Housing Trust, Burlington, VT
Irvine CLT, Irvine, CA; Pima County CLT (very successful); City First Homes in D.C.

15. Nonprofit Sponsorship
Work with an Existing Non-Profit
Pros:
Build on existing capacity
Immediate productivity
Cons:
Political baggage
Accountability to leaseholders
Accountability to community
Divided loyalties/multiple commitments
So what about establishing a CLT at an existing non-profit?
Pro:
Existing capacity,
immediate productivity
Con:
Potential political baggage
Accountability to community,
divided loyalties or multiple commitments
Sometimes you see that existing non-profits that have been doing affordable homeownership programs need a culture shift to understanding and prioritizing permanent affordability and the mantra of stewardship and ongoing support to homes and homeowners. Othertimes, it’s a really great fit with the mission and the capacity is worht tapping into.
CLT is formed by an existing nonprofit
Ex: Thistle Community Housing, Bolder, CO
Options: Conversion, Spin-off, Affiliate or Program

16. Employer Sponsorship Partner with Local Business Pros: Cons:
Immediate capacity and credibility
Access to funding from employers
Cons:
Accountability to employers
Target population (workforce housing)
What about an employer-sponsored CLT…while this is rare, they have popped up for the production of workforce housing.
Pros:
Immediate capacity and credibility
Access to funding from employers
Cons:
Accountability to employers
Target population (workforce housing)
The biggest pro here is financial support from a committed for-profit however, you have to weight whether your goals for a CLT are going to stay aligned to the employer.
CLT is formed by local employers
Ex: First Homes, Rochester, MN (Mayo Clinic)
Workforce Housing Association of Truckee Tahoe
Workforce housing often = a higher income target population

17. 2. Governance: The “Classic” Tripartite Board
Leaseholders
Public Representatives
Members
The “Classic” Tripartite Board
Variations
No General Membership
Organizational Members
Appointed Seats
Ok, so moving onto the second major decision after sponsorship is how you are going structure governance.
The class model is a tri-partite structure, and they define the 1/3s as Members of the CLT (which are typically local community members and residents outside of the CLT), 1/3 CLT Leaseholders (residents), and 1/3 Public Representatives. There are a variety of interpretations about public representatives – from civic-minded community members, local government, to fundraisers, to those with expertise in lending and real estate, etc.
Now, the board is traditionally elected by the members at the annual meeting.
In terms of variations: When a CLT is part of a local government, there may be no membership and board seats may be appointed. Likewise, if it is created as a program of an existing non-profit – you have to decide how to incorporate the principles of membership and resident governance into that structure.
[CLICK] Why bother to have this governance structure of broad scale community membership and tri-partite governance?
Worst-case scenario. Let’s take the example of a CLT from Colorado. They didn’t have a membership. When a new ED came in, she opted to get rid of the CLT and change the priorities of the organization, which failed to honor the commitments made to homeowners and the ongoing community to preserve affordable homes. If a membership had existed, then they could have organized and held the ED accountable. Same if the board had been comprised of members and leaseholders.
Membership also is critical for building and maintaining community support, your members help you do what you do, and lastly, your membership keeps you tied to your mission. To ensuring that the land the CLT owns is serving the community’s interest and goals, which may change overtime.
Why Bother?

18. 3. Service Area Neighborhood City-wide County-wide Metropolitan
State-wide
Where do you start and where do you stop?
Island wide = OPAL
Cit-wide = Irivine
County-wide = lots of CLTs
Metro?
State = Rhode Island, Delaware

19. 4. Beneficiaries Who will you serve? Income? Residency? Workforce?
You also must consider who your beneficiaries are going to be. What is the income level you want to serve? What is the income level you are willing to serve?
Do you want to only serve residents and do residential properties? Or do you have goals for helping small businesses or local non-profits through commercial development?
Both service area and beneficiary goals should balance the mission of the CLT with funding opportunieis for the CLT. It’s importatn to think about where the line is drawn for the CLT and where the line can be moved to take advantage of changing landscape of fundings and markets.

20. 5. Development Strategies
CLT Development
Buyer-initiated scattered site
Developer-initiated
Municipal projects
Partnerships
How you develop housing will also be defined in large part by your community. If you’re in a city with an existing housing stock, you may start with a buyer initiated program buying up existing properties.
If you’re in a community with inclusionary zoning, you may not develop at all but be on the receiving end of affordable units built by market-rate developers. But remember, your stewarding that property froever. Consequently, you need to critically consider whether the units for your portfolio and beneficiaries now and in the future.
If you’re in a rural community or a community with vacant land problems, then you may be developing housing yourself or through partnerships with non-profits, for-profits or the municipality.
The CLT models works with any of these, but they certainly pose different considerations for stewardship and your long term planning.
For instance, with existing housing stock, you need to consider investing upfront in rehab or ongoing maintenance. If you do new construction, you build this on the the front end.

21. 6. Development Type Single Family Detached Condos Coops Co-housing
Rental
Mobile Home Parks
And like the development strategy, there is no wrong or right to the type of buildings you build or buy. They can be anything from single family detached to large condo developments. You just want to remember tht they will be with your CLT forever.

22. QUESTIONS? END: Full-group on flip chart:
What are the unique qualities of a CLT we just reviewed? Prompts:
How long are the homes affordable? Perpetual Affordability
How long is the organization responsible? Perpetual Responsiblity
What kind of ownership? Dual Ownership
How does the owner have rights to the land? Ground lease
How is governance structured? Tripartite board & community based membership