CLTs are tools used by nonprofit organizations to sell homes to low income households at below market rates. When the household is ready to move, they can sell the home to another income eligible family at an affordable price and share the home price appreciation with the nonprofit organization. Not only do the two parties share the rewards of homeownership, but they share the risks. However, by sharing ownership, these risks are minimized which reduces the likelihood of foreclosure.
Consequently, CLTs increase economic mobility for low- and moderate-income households. They also lead to increased neighborhood stability, fewer vacant properties, reduced displacement resulting from gentrification, increased access to high opportunity areas, etc.
Zonta recommends that those interested in using CLTs purchase land near public transportation in the central cities and suburban areas. Additionally, Zonta recommends that future qualified allocation plans (QAPs) prioritize lasting affordability for the Low-Income Housing Tax Credit (LIHTC) program, increasing the likelihood that CLTs could be considered for this funding.
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