Frequently asked questions
What is a Community Land Trust?
Why set up a CLT?
What do you mean by "community"?
How does a CLT create affordability?
Are CLTs just about building homes for rent?
Where does a CLT get its land?
How is community ownership of the land protected for the future?
How are CLTs run?
What if we don't have enough people with the right skills?
How do you set up a CLT?
How does a CLT get funding?
Can a CLT partner with a housing association?
What is a Community Land Trust?
A CLT is a non-profit, community-based organisation run by volunteers to develop housing, workspaces or other assets that may be required to address a need in their local area. The income stream generated from the assets is protected and used to keep assets permanently affordable, for long-term community benefit.
Why set up a CLT?
There are a number of benefits to setting up and running a CLT. Usually, the stimulus is a desire to create affordable homes that are available to local people who cannot afford open market housing. However, often local people might take on another challenge facing their community, such as setting up a community shop, or purchasing the local pub when it is about to close.
- CLTs are locally driven, controlled and democratically accountable.
- CLTs can meet local housing need even in areas with very high house prices.
- CLTs, by retaining an equity share in each property, provide housing that is permanently affordable, benefitting many generations of residents.
- CLTs give the community an asset for the future.
- CLTs genuinely empower local communities, where communities are part of the vision and solution for their local area.
What do you mean by "community"?
It is up to the members of the CLT to determine what community the trust will seek to serve. Usually it relates to people that live and work, or want to live and work within a defined geographical area, perhaps a number of local parishes or an urban neighbourhood.
How does a CLT create affordability?
To create affordability a CLT needs to receive initial subsidy in one form or another; be it free land, or financial grants from government, charities or benefactors. Once properties have been built, the land on which they are built is protected from fluctuations in land market valuations by a legal ‘asset lock’ that is a fundamental part of all the CLT structure.
By separating the value of the building from the land that it stands on, occupiers of CLT properties can pay rent for their use of the building at levels that are permanently affordable (usually no more than one third of their income).
Are CLTs just about building homes for rent?
No. CLTs usually have wider ambitions than to just provide affordable homes for rent. They set out to address local housing needs, whatever that need may be. It might be a family seeking to buy a share in their home, or an elderly person seeking to downsize to more appropriate accommodation, freeing up a larger family home in the process.
CLTs are also providing opportunities for self-builders, mutual homes ownership and co-housing schemes. The latter are very prevalent in continental Europe and there is growing interest in their development in the UK as an alternative to traditional mortgage based options. Land owned by a CLT is the perfect place to try out some of these new ideas.
There are a number of possible sources of land. A CLT may:
- Receive public land at little or no cost;
- Purchase a rural exception site at about agricultural value;
- Acquire a site at open market value, through access to grant funding or community share issues;
- Already own a site that is permitted for development.
How is community ownership of the land protected for the future?
CLTs hold their assets in perpetuity. But, as Woody Allen once said, ‘Perpetuity is a long time, especially when you get near to the end’, so CLTs do need to have the flexibility to respond to future circumstance, perhaps by selling a home if there is no longer a need for it. The CLTs legal ‘asset lock’ dictates that assets can only be sold or developed in a manner which benefits the local community. So if a home is sold the cash realised is protected and can be re-invested into something else that the trust’s members think will benefit the local community.
How are CLTs run?
CLTs are locally driven, controlled and democratically accountable. They have a membership that is open to all who live or work in the defined community, including occupiers of the properties that the Trust owns. The members elect a volunteer board to run the trust on their behalf on a day to day basis. Usually, the board comprises a balanced mix of supportive local residents, tenants and employers; people from the wider area with useful skills to offer; and additional stakeholders that seek to preserve the integrity of the trust (perhaps local authority representatives, or those who endow land or property to the trust).
What if we don’t have enough people with the right skills?
We understand that volunteer time is limited and that CLTs can be complex organizations to run. The National CLT Network exists to provide online guidance, signposting and learning opportunities at regional and national seminars and workshops. There are also a number of umbrella groups who can provide regional support and advice.
How do you set up a CLT?
The flow chart below illustrates the main steps to setting up a CLT, although it is not exhaustive. For more detailed information on how to set up a CLT please see the Step by Step Guide or attend one of our training events.
How does a CLT get funding?
CLTs are all financed in different ways and the final balance of funding will depend on local circumstances and the objectives of the trust.
There are a number of sources of pre-development funding:
- The CLT Fund
- Feasibility Fund: one day consultancy support and guidance for a fledgling CLT by a CLT expert.
- Technical Assistance Fund: grants of up to £2,500 for up to five days consultancy
assistance to develop the initial ideas into a business plan that is investment ready.
- Investment Fund (for charitable projects only): Pre-development finance to cover
tasks like conducting site surveys, employing the design team and obtaining
planning permission.
- Local authorities: some may be able and willing to support pre-development costs.
- Parish council precepts are a potential source of funding.
Sources of development finance include:
- CLT Fund: Investment Fund (charitable projects only): capital loans to top up commercial
development financing already secured.
- Local authorities: local authorities have the power and may be willing to provide
development finance, be that through a capital grant, revolving loan or deferred interest
payment upon completion.
- Ethical lenders: Ethical lenders such as Triodos Bank may be sympathetic to providing loans to CLTs.
- Homes and Communities Agency (HCA): The HCA have supported some CLT
schemes to date and the Affordable Homes Programme Framework 2011-15 gives CLTs the
option of either joining a Consortia of Registered Providers or applying independently for grant to deliver schemes that meet certain criteria, including value for money.
Can a CLT partner with a housing association?
Some of the most successful CLTs have benefited from partnering with a not-for-profit housing association to develop and manage their homes. There are a number of ways that a CLT can partner with a Housing Association.
The Network maintains a contact list of housing associations in each region of England who are interested in working with CLTs. Download our contact list of associations interested in working with CLTs here.