How the SCLT Works

A community land trust is a simple and elegant way to reduce the cost of houses by roughly one third and provide perpetually affordable homes.

A CLT acquires land and builds small homes. The deed of the home is separated from the deed of the land. The trust retains the land and the owners purchase only the home.

In purchasing the home, owners sign an agreement which, among other things, limits their profit taking at the resale of the house to 25% of the change in appraised value. This limitation is necessary because property values tend to increase over time substantially more than wages. This limit on profit taking keeps the home perpetually affordable while allowing the owners to accrue enough equity to enter the open housing market in their next home purchase.

In summary, there are three cost-saving mechanisms at work in a CLT home: the home buyer is not buying the land beneath the house, the house itself is small, and profit-taking at resale is limited in order to preserve affordability over time.