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CLT Options

CUNY CEDC

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Presentation Road Map

  • Intro to CLTs
  • Corporate Structure Models
  • Building Ownership and Governance Models
  • Bringing it all together
  • Decision-making tools

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Terms and Concepts

  • Corporate Structure
    • Will the CLT be created as a new corporate entity, will it be grafted onto the founding nonprofit as a program, or something in between?
  • CLT Governance
    • Who will govern/advise the CLT?
  • Building Ownership
    • Who will own the buildings?
  • Building Governance
    • Depending on building ownership, what is the governance at the building-level?
  • Resident Ownership
    • Do residents own? Rent? Are there alternative forms for building equity?

At page 4

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Intro to CLTs

Community Land Trusts (CLTs) are non-profit organizations that treat land as a public good. The CLT owns the land and works to ensure it is used in ways that benefit the community. Buildings are owned and used by organizations, businesses and individuals.

Ultimately, a CLT is a way to rearrange rights and responsibilities to give people power over the places that they live.

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Characteristics of a “Classic” CLT

Ownership

  • Title to land is held by a single nonprofit corporation. Land is removed permanently from the market, and owned and managed on behalf of a place-based community.
  • Any buildings are sold off to homeowners, cooperatives, nonprofits, or other corporations or individuals.
  • A ground lease outlines the terms of the relationship between the nonprofit landowner and the buildings’ owners.

Governance

  • The landowner is a nonprofit with a membership that is open to anyone living within the CLT’s service area.
  • A majority of the nonprofit’s board is elected by the CLT’s membership.
  • There is a balance of interests on the CLT’s tripartite governing board:
    • people living on the CLT’s land
    • residents of the CLT’s service area who do not live on the CLT’s land
    • public interest

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CLTS in NYC

At page 2

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CLTs in NYC vary from “classic” CLT characteristics in that:

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  • most focus on the development and stewardship of housing; and

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  • most have multi-unit buildings rather than single family homes (those buildings are generally owned by a not-for-profit entity or housing coop, and that entity then conveys individual units to residents)

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Corporate Structure Models

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Corporate Structure Models: Overview

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Independent CLT

Spin-off Nonprofit

A separately incorporated CLT is spun off from founding nonprofit, within which it the CLT is initially incubated and temporarily housed

Subsidiary Nonprofit

Founding nonprofit sets up a separately incorporated CLT, but the CLT remains affiliated with and controlled by that sponsoring nonprofit

Program of Founding Nonprofit

No separate entity is created, but elements of the CLT model are grafted into founding nonprofit’s operations

More community control

More founding nonprofit control

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Independent CLT

  • A CLT is incorporated as an organization entirely separate from the founding nonprofit.
  • Founding nonprofit’s role = convenor
  • This corporate structure most closely tracks the “classic” governance structure.
  • Founding nonprofit may still retain some role in governance, but the CLT would function as a completely independent entity.

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Independent CLT

Spin-off

Subsidiary

Program

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Independent CLT: Case Study

East Harlem El Barrio CLT

  • Founded by NYCCLI and Picture the Homeless
  • Governance during the rehab period:
    • The CLT owns the land and the buildings
    • Separate nonprofit controlled by developers (Banana Kelly and CATCH) has legal control and responsibility over the land and buildings
  • After the rehab period:
    • The CLT (landowner) governed by 2-5 tenant reps, 2-5 community reps, and 2-5 public/at-large reps
    • Building owned and governed by MHA, with 4 tenant reps, 1 CLT rep, 2 developer reps
    • Banana Kelly responsible for building management

At pages 5-6

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Independent CLT

Spin-off

Subsidiary

Program

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Independent CLT: Key Takeaways

  • Offers the most community control
  • Requires community buy-in to launch
  • Less institutional support from founding nonprofit

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Independent CLT

Spin-off

Subsidiary

Program

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Spinoff

  • A parent nonprofit incubates and temporarily houses a separate CLT, with the goal of the CLT becoming autonomous over time.
  • The CLT gradually builds its own constituency and its own capacity, until it can eventually stand on its own.

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Independent CLT

Spin-off

Subsidiary

Program

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Spinoff: Governance

  1. Transition boards: Bylaws can provide for diminishing control of the board by a parent organization over time by reducing the number of board seats controlled by the parent from year to year.
  2. Contract between the parent organization and the CLT, outlining the terms of the relationship: a contract can allow the parent organization to set clear expectations, and it helps ensure that the parent organization understands their own commitments with regard to the CLT.

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Independent CLT

Spin-off

Subsidiary

Program

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Spinoff: Case Studies

Clackamas CLT (Portland, Oregon), created by Northwest Housing Alternatives

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Independent CLT

Spin-off

Subsidiary

Program

​

Public Reps

Community Reps

Leaseholder Reps

NHA Appointed

Board Appointed

NHA Appointed

Membership Elected

NHA Appointed

Membership Elected

Year 1

4

0

1

3

1

0

Year 2

2

1

1

3

1

1

Year 3

2

1

0

3

1

2

Year 4

2

1

0

3

0

3

Thereafter

2

1

0

3

0

3

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Spinoff: Case Studies

OakCLT (Oakland, CA), created by Urban Strategies Council and Oakland Acorn

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At page 7-8

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Independent CLT

Spin-off

Subsidiary

Program

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Public + Organizational Reps

Community Reps

Appointed by Initial Board

Expert Reps

Appointed by Initial Board

Urban Strat. Council Appointed

Oakland Acorn Appointed

City Appointed

Local Residents

CLT Leaseholders

Finance

Housing Development

Year 1-2

2

2

1

0

0

0

0

Year 3

2

2

2

5

2

1

1

Today

1/3

1/3

1/3

​

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Spinoff: Key Takeaways

  • Founding nonprofit has the benefits of controlling the CLT at first, but then transitions into an independent CLT.
  • But excluding community from governance during early stages of CLT can have consequences re: buy-in
  • Founding nonprofit’s early support can provide operational stability

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Independent CLT

Spin-off

Subsidiary

Program

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Subsidiary

  • A parent nonprofit incorporates and staffs a separate CLT as a subsidiary and maintains long-term majority control of the governance of the CLT, with varying degrees of community control.
  • The parent nonprofit and subsidiary may share some staff, some resources, and some board members depending on capacity and resources of parent organization.

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Independent CLT

Spin-off

Subsidiary

Program

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Subsidiary: Governance

The parent nonprofit retains control of its subsidiary CLT through either:

1. Sole Membership: Parent company becomes the sole member of the subsidiary nonprofit and elects the Board members.

2. Majority Control of Board: Bylaws include provision in which parent company has the power to appoint all or the majority of the Board seats.

*The composition of the board can still be predetermined in the bylaws (e.g., at least one director must be a tenant, etc.) but under this model, the parent organization can appoint those directors.

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Independent CLT

Spin-off

Subsidiary

Program

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Subsidiary: Case Studies

Dudley Neighbors, Inc. CLT (Boston, MA), a subsidiary of Dudley Street Neighborhood Initiative (sole member of DNI)

At pages 9-10

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Independent CLT

Spin-off

Subsidiary

Program

DNI Board of Director Requirements

Member (DSNI) Appointed (6)

must include:

Voting Ex-Officio (3)

must include:

Non-voting Ex-Officio (2)

must include:

at least one (1) Tenant

Mayor

State Senator

at least one (1) Local Non-Profit Rep

City Councillor

State Representative

at least one (1) Local Business

Roxbury Neighborhood Council Rep

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Subsidiary: Case Studies

Bronx CLT, a subsidiary of NWBCCC (sole member of Bronx CLT)

At pages 10-11

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Independent CLT

Spin-off

Subsidiary

Program

Bronx CLT Board of Directors Requirements

All nominated by Members (NWBCCC)

All Directors (3-11) must: be 18; have lived in Bronx for 2 years; and committed to mission of CLT

One Third (⅓)

must be:

At least one (1)

must be:

Resident of low income neighborhood; OR

Tenant on CLT property

Rep of low income neighborhood org

*Structure and bylaws very similar to DNSI/DNI model

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Subsidiary: Key Takeaways

  • A subsidiary has less community control, but it can be strengthened.
  • A subsidiary of a founding nonprofit means two different nonprofits to fund and maintain, but they can share costs and capture more funding.

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Independent CLT

Spin-off

Subsidiary

Program

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Program

  • Elements of a CLT are grafted onto the operations of an existing nonprofit.
  • This model is most frequently utilized where a nonprofit developer of rental housing wants to diversify its portfolio and add a homeownership component.

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Independent CLT

Spin-off

Subsidiary

Program

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Program: Governance

  • Governance of the CLT is not distinct from the governance of the sponsoring nonprofit.
  • Mechanisms to incorporate community engagement:
    1. Advisory committee
    2. Parent nonprofit is a membership-based organization

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Independent CLT

Spin-off

Subsidiary

Program

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Program: Case Study

Thistle CLT, program of Thistle (Boulder, CO)

  • Thistle develops and manages affordable rental and ownership homes. In 1996, Thistle launched a CLT program through which it offers permanently affordable homeownership by separating ownership of the land from the building and limiting the resale value.
  • Portfolio includes ~100 resale-restricted, owner-occupied homes in the CLT, most of which are newly constructed.
  • Thistle functions purely as a shared equity homeownership model, and has no community control component.

At page 12

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Independent CLT

Spin-off

Subsidiary

Program

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Program: Case Study

Community Justice Land Trust, program of Women’s Community Revitalization Project (Philadelphia, PA)

  • Incorporates an advisory committee that consists of residents and other stakeholders, as well as WCRP board members, that provides recommendations to guide the CJLT

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Independent CLT

Spin-off

Subsidiary

Program

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Program: Case Study

SHARE CLT, a program of Upper Valley MEND (Leavenworth, MA)

  • Neighborhood level governance:
    • Homeowners’ Association: residents meet two times per year to make decisions regarding neighborhood matters
    • Covenants, Conditions and Restrictions Committee: smaller committee meets more frequently to interpret neighborhood rules
  • CLT governance:
    • SHARE CLT Committee: comprised of UV MEND board members, SHARE CLT staff, homeowners, and members of the community; makes recommendations to the broader MEND board
    • CLT homeowners are members of MEND, and encouraged to join the MEND board

At page 13

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Independent CLT

Spin-off

Subsidiary

Program

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Program: Key Takeaways

  • Is a CLT program a CLT?
  • Very little community control
  • Long-term stability of CLT tied to long-term stability of founding nonprofit

At page 13-14

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Independent CLT

Spin-off

Subsidiary

Program

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Building Ownership and Governance

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Mutual Housing Associations (MHAs)

  • Non-profit community-based organizations that own and manage housing. Democratically governed by residents and some non-resident members.
  • Designed to go beyond the needs of a single building or group of residents.
  • MHAs and CLTs pair well together as tools for preserving and managing resources:
    • CLTs can provide a framework for long-term land-use planning and control,
    • while MHAs can facilitate housing development, and the use of cross-subsidies and economies of scale to make housing more affordable.

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Resident Ownership Models

  • Limited Equity Housing Cooperatives (LEHC): a type of housing cooperative in which the resale value of ownership shares is limited by the corporation’s bylaws.
  • Lease to Own: CLT temporarily rents to residents, residents purchase when ready.
  • Renter Equity: In return for committing to long-term tenancy and participating in governance, each household earns financial credits monthly. After a minimum time period is up, the credits are vested.
  • Individual Development Account: a type of savings account where the CLT or landholder matches savings by a certain ratio to go towards homeownership or some other predetermined goal.

At page 16-18

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Bringing it All Together…

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Spinoff CLT

Land owned by CLT

Governed by majority founding nonprofit at first, then transitions to tripartite board

Limited Equity Housing Cooperative

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Building owned by LEHC

Ground lease held by LEHC

Governed by residents of building

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Rental Building

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Building owned by founding nonprofit

Single-Family Home

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Home owned by CLT

Residents own shares,

w/ limit

on resale

value

Units

rented by

tenants

Lease to own option for residents

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CLTs in NYC: Case Studies

At pages 3-4

Cooper Square CLT (24 LEHC buildings): Combines CLT with MHAs. CLT works to ensure the housing stays affordable and to incorporate the larger community, and MHAs ensure tenant control, ownership and management of the buildings.

RAIN CLT (9 LEHC buildings): Came out of similar movement as Cooper Square, but CLT is largely inactive and coops govern themselves independently.

Bronx CLT (no property yet): Fairly new CLT subsidiary of NWBCCC. Community buy-in and control is incorporated through NWBCCC membership base.

EH/EB CLT (4 rental buildings w/ 2 commercial units): began as a case study for NYCCLI, currently in the midst of rehabilitating inhabited buildings sold to them by NYC for $1 each.

Mott Haven/Port Morris CLS (no property yet): independent CLT founded by Bronx Unite to increase green space and permanent affordability in the South Bronx

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