[forgotuser]

I think Community Land Trusts are a great example of the sort of thing people should be looking into as an alternative to the current model. Don't see people talking about them much.

The basic idea is that a nonprofit purchases the land in a community and holds it in perpetuity. It rents the land long-term to residents (and for the most part, they're required to be residents), instead of selling it. It's still possible for residents to purchase homes- they just won't own the land they're sitting on top of. That way, you avoid speculation and skyrocketing land prices. Many CLTs also designate some proportion of the land as "low-income", and set accordingly lower rents for those residents.

[refurb]

How does that control the cost of housing?

I'm assuming that one would go to a land trust, sign a contract to rent a lot for $X/month for 99 years (or something similar).

Then you would build a house, probably get a construction mortgage to afford it. Then your monthly payments would be mortgage + $X.

Area becomes wildly attractive and people move in. Suddenly people are offering mortgage * 200% for your house, knowing they'll add $X to their money payment.

Housing still gets expensive. What am I missing?

[bufordsharkley]

Based upon the details of this diagram from Wikipedia[0], it appears that there are restrictions on resale. The CLT sets maximum prices for resale (I'd like to know how), allowing some profit.

In some ways, this appears to be analogous to rent control, except each apartment is replaced by a home.

I see some similar issues, though-- if a CLT becomes extremely attractive, I wouldn't suspect it wouldn't necessarily respond to signals that more housing stock is needed. You could get to the point that there's a scarcity of affordable housing, much as you see with rent control today.

Am I missing something in this analysis?

[0] https://upload.wikimedia.org/wikipedia/commons/5/50/Communit...

[refurb]

Thanks for digging it up. I agree that a limit on sale price is just like rent control. Creates a ton of distorted incentives in the marketplace.

[bufordsharkley]

I could see it being useful in spreading risk, etc (it could essentially replace the need for zoning laws), but it doesn't really attack the underlying problem.

I see it as being compatible with a land value tax (which would align incentives optimally), but not a replacement for it.

[bufordsharkley]

I've wanted to look more into CLTs, but haven't yet--

What's stopping CLTs from existing today? Is it merely the novelty and relative complication of the CLT? Or is there policy that makes them impractical?

[forgotuser]

They do exist! There are, I believe, currently a few hundred in the US. They're just spreading very, very slowly. I imagine the main issue is a combination of lack of public awareness + the difficulty of acquiring land + lack of public policy to accommodate the weird structure.

[bufordsharkley]

Ah, interesting. I'm familiar with some of the historical land trusts (Fairhope, Arden), but not the contemporary ones... I really need to learn more.

I suppose they're mainly helpful for before when a housing market reaches the breaking point. That is, before the land is unaffordable.

Are people trying CLTs in Detroit? It seems a natural place to experiment with it.

[thescriptkiddie]

They do exist. What's stopping them from being more prevalent? Probably the lingering effects of McCarthyism.

[erikpukinskis]

I think this is a big part of it. I've been jabbering about collectivism for a decade, and almost everyone's first reaction is to tell me why that can't possibly work and there's a reason for capitalism, and if it made sense a company would do it, yada yada yada.