Community Land Trusts and Shared Equity Homeownership

A community land trust (CLT) is an organization, usually a nonprofit, that owns land permanently and sells or rents the homes on it at below-market prices. A buyer purchases the house, leases the land, and agrees to resell at a restricted price so the next buyer also gets an affordable home. CLTs are the best-known form of shared equity homeownership, a family of models in which a one-time subsidy lowers a home’s price and resale limits keep that subsidy in the home.

The buyer gets into a home they could not otherwise afford and builds some equity. In return, they give up most of the market appreciation, which stays with the home for the household that follows.

The Problem Shared Equity Is Built to Solve

Most homeownership subsidies help one household once. A typical down payment assistance program gives a buyer a grant or a second loan. When that buyer later sells at the market price, the home is no longer affordable.

Shared equity homeownership changes what happens at resale. Federal rules for the HOME Investment Partnerships Program describe the two approaches as recapture and resale:

Under the resale approach, HUD’s HOME regulation requires that the seller receive a “fair return on investment” and that the home remain affordable to a reasonable range of low-income buyers. A July 2026 law, described below, raised the income ceiling for homebuyers in the HOME statute to 100% of the area median. As of October 2026 the regulation, last amended in 2025, had not been revised to match.

The Main Models

Shared equity is a category, not a single program. The models differ mainly in who holds the land and which legal document carries the restriction.

The lines blur in practice. In a 2022 national census published by the Lincoln Institute of Land Policy, 61% of responding organizations used ground leases for all of their shared equity homes, 8% used only deed restrictions and 17% used both. One reason is that many state laws require condominiums to use deed restrictions.

How a Community Land Trust Works

The Ground Lease

The trust keeps title to the land. The homeowner buys the house and signs a ground lease, which Grounded Solutions Network, a national membership organization for the field, describes as long-term, often 99 years, and renewable. The lease usually:

• Sets rules on use and occupancy of the home.
• Sets the formula that caps the resale price.
• Limits buyers to households under an income ceiling.
• Gives the trust a preemptive option, meaning the first right to buy the home when the owner sells or faces foreclosure.

Because the buyer does not pay for the land, and the house is often subsidized as well, the purchase price falls well below market.

The Resale Formula

The resale formula decides how any gain in value is split between the seller and the home. The 2022 census found three standard types among the 141 organizations that answered. Some use more than one, so the shares add up to more than 100%.

Among appraisal-based programs, 62% gave the seller 25% of the appreciation. Among fixed-rate programs, the most common rate was 1.5% a year. Federal HOME rules list a fourth type, the itemized formula, which adds up the down payment, principal paid and capital improvements.

A Hypothetical Example

Suppose a house would sell for $300,000 on the open market. A trust keeps the land, applies a subsidy and sells the house for $200,000. Seven years later the market value has risen to $360,000. All of these figures are invented for illustration.

• Appraisal-based, 25% share: the cap is $200,000 plus 25% of the $60,000 gain, or $215,000.
• Fixed-rate, 1.5% compounded yearly: the cap is about $222,000.
• Index-based: if the local area median income rose 20%, the cap is $240,000.

In each case the seller also recovers the mortgage principal paid down over seven years. The next buyer pays between $215,000 and $240,000 for a home worth $360,000, with no new subsidy.

Stewardship

A CLT’s job continues after the sale. Staff qualify buyers, monitor the homes, review refinancing requests, manage resales and can step in when an owner is at risk of foreclosure. This ongoing work is called stewardship. In the 2022 census, 78% of organizations charged homeowners a ground lease or administrative fee, with reported amounts ranging from about $5 to $100 a month.

Governance

The “classic” CLT has a three-part board. One-third of seats go to people living in the trust’s homes, one-third to other residents of the service area, and one-third to public-interest representatives. Practice varies. Of 155 organizations with complete data in the 2022 census, 47, or 30%, met the study’s definition of a classic CLT, which counted any board with at least one-third resident members.

Where the Model Came From

Both Lincoln Institute papers date the first CLT in the United States to 1969, in Albany, Georgia. That organization, New Communities Inc., grew out of the civil rights movement in the South and was created to help Black farm families gain economic independence. One of the best-known later examples is in Vermont, where the Burlington Community Land Trust was founded in 1984 with financial support from the city. It merged with a rental housing nonprofit in 2006 to form Champlain Housing Trust.

Congress wrote a definition of the term into the HOME program’s statute in 1992. Growth sped up after 2000. Among organizations still operating at the time of the 2022 census, 11 were founded in the 1970s and about 70 in the 2010s. Those counts leave out organizations that have since closed.

Federal Rules That Shape the Field

There is no single federal CLT program. Several rules set the boundaries.

• A federal definition. The 21st Century ROAD to Housing Act (Public Law 119-101), which became law on July 11, 2026, struck the 1992 definition and added a new one to the general definitions of the Cranston-Gonzalez National Affordable Housing Act. A qualifying trust can be a nonprofit or a state or local government body that is not managed by a for-profit organization. It must hold land mainly to provide permanently affordable housing for low- and moderate-income people, monitor its properties, keep homes affordable for at least 30 years through a ground lease, deed covenant or similar tool, and keep a preemptive option to purchase.
• A possible funding source. The same law authorizes a competitive HUD grant program for converting vacant buildings into housing, and starting or expanding a CLT is an eligible use. The Congressional Research Service notes that it runs from fiscal year 2027 through 2031 and depends on appropriations.
• HOME program rules. HUD’s regulation requires localities that use HOME funds for homeownership to adopt resale or recapture provisions. Minimum federal affordability periods are 5, 10 or 15 years, depending on the amount of HOME money per home. CLTs typically set far longer terms. The rule also lets a CLT use its preemptive right to take back a home in place of foreclosure, if the locality allows it. The 2026 law amended the HOME statute to name shared equity models, community land trusts and limited equity cooperatives as a third accepted way to keep assisted homes affordable.
• Mortgage access. Under the Federal Housing Finance Agency’s Duty to Serve rule, Fannie Mae and Freddie Mac, the two government-sponsored enterprises, can earn credit for supporting loans on shared equity homes. To count, a program must keep the home affordable for at least 30 years, use a resale formula, and hold a preemptive purchase option. The enterprises’ current plans cover 2025 through 2027.

How Big Is the Sector?

Small, but growing. The 2022 census identified 314 CLTs and nonprofit shared equity organizations in 46 states, Washington, D.C., and Puerto Rico. Together they held a projected 43,931 homes at the end of 2022:

• 15,606 shared equity homes for owners, up from 7,139 at the end of 2011.
• 19,545 rental units, about 44% of the total.
• The rest included cooperative units, manufactured homes, lease-to-purchase homes, ownership homes without resale restrictions and units of unknown type.

Counting every model, researcher Emily Thaden estimated close to 250,000 shared equity homes nationally in 2018. The largest share was about 166,600 cooperative units, roughly 100,000 of them in New York City.

What the Evidence Shows

A large performance study, published by the Lincoln Institute in 2019, tracked 58 programs and 4,108 homes in 20 states and Washington, D.C., from 1985 to 2018. Its main findings:

• Affordability held. 95% of homes were priced to be affordable to households at or below 80% of AMI, on both first sales and resales. The median subsidy equaled 31% of the home’s market price.
• Owners built wealth. The median seller accumulated about $14,000, against a median initial investment of $1,875. That figure combines appreciation with mortgage principal paid down. For sales during the 2013–2018 recovery, median net appreciation was negative, and principal payments made up the difference.
• Households stayed put. From 1995 to 2017, about 2.6% of owners moved each year, compared with 6.9% of all U.S. homeowners.
• Many moved on to ownership. Of those who sold, 58% bought another home and 28% moved into rental housing.
• Buyers became more diverse. Households of color rose from 13% of buyers before 2001 to 43% in 2013–2018.

The 2022 census adds that 87% of shared equity owners at the end of 2021 were first-time homebuyers. A Grounded Solutions Network fact sheet reports that more than 99% of shared equity homes avoided foreclosure proceedings. A separate study cited in both Lincoln Institute papers found lower odds of gentrification in neighborhoods with CLT homes.

Two cautions apply. The 2019 authors note that their sample leaned toward larger, more established CLTs and does not represent the whole field. Much of the research is also produced by or with Grounded Solutions Network, which supports these programs.

Tradeoffs and Criticisms

• Less wealth for the owner. In a fast-rising market, a shared equity seller leaves with far less than a neighbor who bought without restrictions. Supporters reply that most of these buyers could not have bought at all.
• High cost per home. Thaden’s 2018 review put the subsidy needed in many markets at roughly 20% to 50% of the market value of the home and land.
• Stewardship is not self-funding. In 2021, 64% of organizations covered 20% or less of their shared equity operating budget from fees and other internal revenue. The rest came from donations, grants, government sources and the organizations’ other lines of business.
• Mortgages can be harder to find. In the 2022 census, 70% of organizations had lenders willing to make loans on their homes, and most of those worked with three or fewer.
• Legal limits. Some states’ property rules are read to cap deed restrictions at 30 years. Programs work around this with purchase options or renewals.
• Weak tracking outside CLTs. Thaden noted in 2018 that many inclusionary programs did not monitor their below-market homes closely, so it is not known how many of those homes have stayed affordable.

Shared Equity and Workforce Housing

Shared equity sits where affordable and workforce housing overlap. In the 2022 census, 58% of organizations capped incomes for their shared equity homes at 80% of AMI or lower. Another 35% set their highest limit at up to 120% of AMI, the top of the usual workforce range, and 7% went above that. The 2019 study found the typical buyer worked in an office, retail or service job.

Local governments are often the key partner. They contribute through inclusionary requirements on new for-sale development, grants that buy down prices, and public land sold or donated to a trust. The guides on inclusionary zoning and pathways from renting to owning cover those tools.

The Bottom Line

Community land trusts and other shared equity models turn a one-time subsidy into a home that stays affordable through many sales, using a ground lease or deed restriction, a resale formula and an organization that stays involved. The research so far points to stable ownership and modest wealth gains for buyers who had few other options. The costs are less appreciation for each owner, a large subsidy up front and a permanent need for stewardship.