Louisville Metro seeking entities to develop and manage Community Land Trust

Louisville Metro Government is making available $2.1 million in federal Community Development Block Grant funds to one or more Community-Based Development Organizations (CBDOs) to develop and manage a Community Land Trust (CLT). The city is issuing a competitive request for proposals this week.

The chosen organization(s) would receive start-up grant funds to cover eligible new construction, acquisition, and rehabilitation-related costs associated with developing and preserving permanently affordable housing through a CLT. All groups must meet the CBDO qualifications laid out by the U.S. Department of Housing and Urban Development to apply.

A CLT is a tool to create permanently affordable homeownership opportunities. Under the land trust model, CBDOs retain control of the physical land but sell the homes that sit on it. Land and structures are valued separately, and land can be a costly part of a real estate deal. By selling the house and not the land, CBDOs are able to price the homes at below-market rates that are affordable to low-income individuals and families.

CBDOs can either purchase private property to renovate or build single-family homes, or they can seek to use property owned by the Louisville-Jefferson County Landbank Authority, whose mission it is to put vacant and abandoned properties back into productive use.

Houses developed as part of CLTs help multiple generations of new homeowners. If the buyer decides to sell their CLT home, an agreement with the CBDO dictates the amount for which the house can be sold, allowing the homeowner to receive money from the sale of the home while also ensuring that the home remains affordable for future owners.

CLTs could be established in multiple neighborhoods throughout Louisville. In areas lacking affordable housing, they can provide a pathway to homeownership. CLTs also can be an effective anti-displacement tool in neighborhoods experiencing high levels of investment. As property values rise, the properties included in the CLT remain affordable.

“Community Land Trusts provide a unique opportunity to create permanently affordable housing in our city by offering homeownership opportunities for people who otherwise could not afford it,” said Mayor Greg Fischer. “Through this model, residents can build wealth and equity in a home in order to set them and their families on a path of success in the future.”

The city and nonprofits have discussed establishing one or more CLTs in Louisville for several years, and in February 2019, CLTs were highlighted in the Housing Needs Assessment published by the Louisville Metro Office of Housing and the Louisville Affordable Housing Trust Fund. The Housing Needs Assessment provided the city’s first in-depth analysis of housing stock across Louisville Metro and recommended solutions to create affordable homeownership and wealth creation opportunities.

Since 2019, Louisville Metro has worked with Grounded Solutions Network, a national nonprofit membership organization that provides technical assistance, strategic planning, peer learning, community engagement and programmatic support, to both produce and preserve permanently affordable housing in emerging neighborhoods. The city and Grounded Solutions Network hosted an open house in July 2019 to educate housing providers and residents on CLTs.

“Strong communities require quality housing that is readily available, accessible and affordable for all,” said Grounded Solutions Network CEO Tony Pickett.

“City leaders across the nation are increasingly supporting local resident-led CLTs to stabilize and protect vulnerable neighborhoods” Pickett added. “Grounded Solutions Network applauds Louisville’s commitment to launch a new CLT; providing working families with increased access to affordable homeownership as an opportunity to build wealth and leveraging neighborhood change with an inclusive, anti-displacement agenda.”

CLTs in peer cities including Lexington and Cincinnati have served as examples for how a similar model could be established in Louisville. The CLT model is rooted in the 1960s civil rights movement. Activists established the first CLT — New Community Land Trust in Albany, GA — to provide land ownership opportunities to African American farmers. Today, there are more than 250 CLTs in the United States.

Interested organizations can find more information at https://louisvilleky.bonfirehub.com/portal.

###