TAKING ACTION
HOUSING AFFORDABILITY PLAN | Town of Wake Forest
Strategy 1: Expand and Preserve Homeownership
Community Land Trust (CLT)
Program Overview The Town can give land to or subsidize the purchase of land by a Community Land Trust (CLT). In doing so, it is recommended that Wake Forest partner with established CLTs. While the Raleigh Area Land Trust (RALT) is the only Trust currently active in Wake Forest, others may emerge over time. How Does it Work? CLTs create opportunities for perpetually-affordable homeownership for low- and moderate-income households by selling homes at a lower cost to income-qualified buyers. Community partners like the RALT purchase and rehabilitate homes, then resell the homes while maintaining ownership of the land (Figure 46). As an example, RALT currently targets families earning 80% AMI or less and properties with a maximum price of $250,000. To ensure affordability, restrictions are placed on the resale price of homes. While this limits the homeowner’s ability to build home equity through land value appreciation, they still gain equity and benefit from modest value appreciation and the stability that homeownership can offer.
FIGURE 46: COMMUNITY LAND TRUST EXAMPLE
TRADITIONAL PURCHASE
COMMUNITY LAND TRUST
DEED
DEED
LEASE
In traditional Real Estate transactions, the homeowner owns the house and the land that it sits on.
The CLT separates ownership of the land from the buildings that sit upon it. The CLT retains ownership of the land and it leases it to the homeowner.
IMPLEMENTATION
1. Set budget for annual CLT program allocation or identify land to sell at a discount. 2. Determine the Town’s requirements for land or subsidy given to a CLT, such as affordability level. 3. Release a Request For Proposals to existing CLTs to apply for the Town’s inventory of available land or funding.
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