West Central MN establishes a Community Land Trust to keep Homeownership Affordable
West Central Minnesota Communities Action (WCMCA) has established a Community Land Trust Program to preserve the quality, availability and affordability of owner-occupied homes for homebuyers with limited incomes.
A Community Land Trust (CLT) buys or receives donated land, builds or acquires homes, or rehabilitates existing homes and makes these homes available for sale to homebuyers with limited incomes, bringing and keeping the purchase price down to an affordable level through the use of public and/or private subsidies.
“A Community Land Trust is a ‘hand up’ not a ‘hand out’ because the owner of the land trust home is trading some equity—if they decide to sell their CLT home in the future—so that another buyer with low income can have the opportunity at building personal wealth through homeownership as they had,” explained Janelle Bennett, affordable housing coordinator with WCMCA. “Many CLT owners may go on to buy market-rate homes after selling their CLT home. The CLT home, however remains affordable buyer-after-buyer. This means investments and grants put toward the home to keep it affordable, are forever protected and not lost to the ever-increasing open real estate market.”
The Community Land Trust is new to West Central Minnesota Communities Action and the region. The program was established in 2019, received its first grant in 2020 and will close on its first house any day and just began the process of building its second home. “We have a collaboration lined up with Habitat for Humanity of Douglas County to place one of their homes in the Community Land Trust this winter and interest from Habitat for Humanity of Ottertail County for future builds,” added Bennett.
The benefits of CLTs are proven according to the Grounded Solutions Network: 74% of CLT owners maintain homeownership for at least six years, compared to less than 50% for conventional homeowners with low incomes. At the peak of the foreclosure crisis (end of 2010), only 1.30% of mortgages held by CLT owners were seriously delinquent, compared to 8.57% of mortgages from conventional homeowners with low incomes and only .46% of mortgages held by CLT owners were in foreclosure proceedings, compared to 4.63% of conventional mortgages. CLTs can protect buyers with low incomes, from going underwater with their home loans, in times of crisis.
WCMCA hopes to add 8 to 10 homes to the CLT each year going forward. For more information, contact out to WCMCA.