How It Works

Burns St Commons home with changing fall leavesThere are essentially two types of land trusts:

  • Conservation trusts, which acquire and protect open space and agricultural land; and
  • Community land trusts, which tend to focus more on housing and community development.

Missoula and the surrounding areas have a number of conservation trusts to protect open space and agricultural land, but only the North Missoula Community Development Corporation uses the Community Land Trust to create permanently affordable housing.

Community land trusts purchase land with existing housing or construct new housing on vacant land that the land trust purchases. The land trust then sells the improvements (structures) on the land to low- and moderate-income homebuyers.

In addition to owning the home, the homeowner leases the land at a modest monthly cost from the land trust. The renewable lease runs for seventy-five year periods. The homeowner can sell the home at any time or can will the home to heirs.

When the owner is ready to sell, a formula based, equity equation or resale formula, is applied to ensure that the home stays affordable for the next owner. All Land Stewardship Program homebuyers must earn less than 80-percent of the area median income .

Because land costs are removed from the housing equation, land trust homeowners enjoy the benefits of homeownership at an affordable price (i.e., 30% of the homebuyer’s gross income).

Other benefits include:

  • tax benefits of homeownership,
  • equity building by paying off the mortgage loan,
  • accelerated payment if financially enabled, and
  • stable monthly housing costs that are often lower (even from the start) than current area rents.