CT could use land trusts to create more affordable housing, report says

A new report suggests that Connecticut law makes the state well-suited to improve housing affordability through a little-known but growing model: community land trusts.

A community land trust is a way to create and preserve affordable housing in which a nonprofit organization owns the land and develops housing. Sometimes additional common areas such as gardens or shops can be created on the property.

The property has rules regarding ownership and transfer of the property to new residents, ensuring it remains affordable. Connecticut laws regarding land trusts include a law that reduces the state’s property tax burden. The law helps open the state to land trusts, according to a report released last month by the Lincoln Institute of Land Policy.

Still, advocates say Connecticut can do more. They would like more funding for the model as well as further tax reforms.

Kristin King-Ries, one of the report’s authors, said there is growing interest in community land trusts nationwide.

“There has been a return to the idea of leveraging the full potential of community land trusts to build the entire community,” King-Ries said in an interview.

Connecticut is one of only six states that reduces property tax burdens only for properties owned by community land trusts. Land trusts can receive property tax relief in the state. Eight others require local assessors to reduce the tax burden on properties owned by a CLT and take into account affordability constraints when calculating taxes on the homes themselves, according to the report.

Taxes on homes built on Community Land Trust land have been a problem for homeowners on Southeastern Connecticut Community Land Trust land, said Executive Director Mirna Martinez.

Homes on community property trusts typically have certain sales restrictions that prevent the homeowner from making as much money as they would on a traditional private home sale. The restrictions are intended to ensure that the apartments remain affordable in the long term.

Martinez said Connecticut tax law doesn’t take this into account when appraisers value the homes.

Connecticut was also one of the first proponents of a state law that included statutes allowing community land trust development. In 2018, five had what the report defines as comprehensive community land trust legislation. These laws typically include measures that define, among other things, a community land trust, provide for a state housing trust fund or other means for land trusts, or tax standards specific to community land trusts, among other things.

That number was as high as 20 earlier this year, according to the report.

“I see this as an important tool for affordable housing,” said Alexander Kolokotronis, director of the Naugatuck Valley Project, which owns a land trust property in Waterbury. “It’s part of this broader ecosystem of affordable housing. And so there is definitely more interest. I’m hearing and seeing more conversations about this in Connecticut.”

The Waterbury property is operated as a cooperative, a corporation that allows residents to purchase shares in the housing development so they can vote on the management of the property. The units were built on land owned by the land trust, in a unique partnership that means land costs can remain low.

Kolokotronis said in his experience, community land funds work to maintain affordability. He compared it to methods like the federal low-income housing tax credit program, which offers tax incentives to developers if they keep a certain percentage of units in a project affordable for at least 30 years.

The program is one of the federal government’s most important measures to promote the construction of affordable housing. But critics have pointed out that affordability requirements won’t last forever.

Connecticut is at risk of phasing out about 5,000 affordable housing units over the next five years, according to a report from the National Housing Preservation Database.

Martinez said while she believes the momentum for community land trusts is increasing, there is still much work to be done.

When she talked about her work, she often said that people didn’t know what a community land trust was.

“I think we still have a long way to go to tell the story,” Martinez said.

Her organization, which operates primarily in New London, promotes home ownership and community gardens on its land. She said she would like to see the state target down payment assistance to programs like community land trusts that guarantee long-term affordability.

Kolokotronis agreed that more funding would help the model grow, particularly to facilitate staffing and technical support for the nonprofits.

King-Ries said that in addition to the increasing popularity, her review also found that more community land trusts are working to encourage settlement.

“It was a single-family model … but over the last five to 10 years the focus has really been on that in the transition to multifamily,” King-Ries said.

It reflects a larger land use discussion taking place across the country, including in Connecticut. Affordable housing advocates are pushing for more density because it allows more housing units to be built on existing land and makes it easier for more residents to use public transportation.

As community land funds become denser and have more units, King-Ries says there is an interplay between the desire to build more and the sense of community that is traditionally part of community land funds.

But she said it is supported by a growing number of land trusts that use the land for community spaces such as gardens and churches.

“There has been a return to the idea of leveraging the full potential of community land trusts to build the entire community,” she said.

CT could use land trusts to create more affordable housing, report says

ByAmelia Journalton

By Amelia Journalton

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