Bloomington-Normal’s housing market is, at the moment, ruthless. There’s not enough supply and way too much demand, pushing up prices and rents. Now, a group is exploring an idea that’s relatively new to the Twin Cities: a community land trust.
Community land trusts, or CLTs, are nonprofits that acquire land on which housing sits. People buy the homes, but they can only lease the land from the trust. By doing so, the purchase becomes cheaper, though the homebuyer faces restrictions on how much they can sell the home for later, to keep it affordable.
The leased-land approach can cut down costs by as much as 20-40%, said Mark Adams, a member of the steering committee looking to launch the Bloomington-Normal Community Land Trust.
“It’s basically a subsidy for home buyers. Usually, it’s for low-to-moderate-income home buyers. Usually between 60% to 120% AMI (area median income),” Adams said on WGLT’s Sound Ideas. “These are the people who don’t have the cash money to compete in a ruthless housing market right now. So making sure they can compete. The CLT is that middle-man. The CLT is simply acquiring and making sure the people who don’t have the means to compete can have access to the home.”
Land trust history
The community land trust concept is not new.
The first was believed to be the New Communities Land Trust in Georgia, created in 1969 as a safe haven for Black farmers during the civil rights movement. There are about 230 CLTs across the country; the ones in Illinois are all in the Chicago area, Adams said. Local organizers say CLTs are best known “for their goal of preventing displacement in appreciating markets” like ours.
State lawmakers and the governor recently approved the new Community Land Trust Task Force that will study the issue statewide and make “recommendations of legislative and budgetary action that supports the mission of community land trusts to foster affordable housing and homeownership.” That was SB 2037, signed into law this summer.
The need is clear to Georgene Chissell, another steering committee member.
“The homelessness has increased substantially. We know that,” Chissell said. “There are a lot of people that are being displaced because of the rising cost of renting, and people cannot afford it any longer. And then you have Rivian coming in, and (their people) are buying up all the homes. So there’s really not a good market out there for people to buy homes at a reasonable (price).”
What's next
The steering committee formed about two months ago and is now working on its bylaws. The next step would be to seek formal nonprofit status from the IRS, which could take months.
Later, the CLT will acquire property. They can do so by paying fair-market value, or foreclosure sales and land-bank transfers, donations, or bargain sales. They’ll need money to do that, and Adams said it will need to come from both public and private sources.
It could come from “TIF district money. Either the City of Bloomington or the Town of Normal or jointly could create a housing trust fund. We also have philanthropic donations and grants. State grants that stem from SB 2037. Funding grants from the federal government — CDBG (Community Development Block Grant) and ARPA (American Rescue Plan). CDBG would be the more immediate one that we’d probably try to go for. (Housing) funding from the state of Illinois. Partnering with banks that do CLT work; many of them will literally provide funding for that.”
Once it acquires the land, the CLT would own it in perpetuity. It would then offer cheap, 99-year ground leases to the person who buys the home on top of it. The homeowner would likely be restricted by how much they can sell the home for later on.
WGLT asked Adams if that might be drawback for some buyers.
“You have to ask yourself: Who is the intended audience?” Adams said. “It’s usually low- to moderate-income homeowners who, honestly, they just want to own their own home. They want to start building equity and this is a pathway to that. A CLT home has the option to be a long-term solution, but in many ways it’s a stepping stone.”
The CLT steering committee expects its biggest challenges to be educating the community about how land trusts work and getting money to acquire land and subsidize.
The steering committee is comprised of about a dozen people. Adams, who works as a community planner and is a Unit 5 school board member, is working on this in his personal capacity. As is the other elected official on the steering committee: Democratic McLean County Board member Krystle Able. Several are affiliated with the Bloomington Revivalists, which organizes along Strong Towns principles.
