There are essentially two types of land trusts:
- Conservation Trusts, which protect open space and agricultural land; and
- Community Land Trusts, which tend to focus more on housing and community development.
While Missoula and the surrounding areas have a number of conservation trusts to protect open space and agricultural land, the North-Missoula Community Development Corporation is the only Community Land Trust (CLT), that develops and maintains permanently affordable housing in Missoula. There are many benefits to having a Community Land Trust in a community. These include:
- Promoting neighborhood preservation, revitalization and stability; and
- Creating and maintaining housing that will remain affordable; and
- Providing access to land and housing for people of modest means.
The goal of the NMCDC’s Land Stewardship Program is to ensure that attainable homeownership opportunities exist for individuals at all income levels, creating diverse and inclusive neighborhoods, now and into the future. The Land Stewardship Program provides a stock of below market rate homes that are reserved for purchase to income qualified buyers. The Land Stewardship Program creates additional housing opportunities by either purchasing land with existing housing, or constructing new housing on vacant land. The ownership of land and the home is then separated, with NMCDC retaining ownership of the land, and the homes (improvements) on the land being sold to income qualified buyers.
To achieve and maintain attainable home prices two important mechanisms are involved. Land costs have been appreciating at a high rate in the Missoula area and removal of land cost from the price of the home is on the first mechanism that significantly lowers the price of the home. When a homeowner purchases a home, they also enter into a Ground Lease with the NMCDC that leases the land under the house at a monthly fee. Perpetual leasing of land is not a new idea. It has been used in some New England farming communities for many decades. Long-term land leases are also common on railroad lands and State lands, where individuals own structures on leased land. Under a perpetual lease arrangement, the person who actually owns the land gives the person who occupies the land the perpetual use of the land in exchange for a fee. To the outside observer, it appears that the lessee is the land owner. The lessee’s right to use the land cannot be ended unless he fails to pay the fee or uses the land in a harmful way. The lessee’s right to act like the day-to-day owner of the land is his to control. The NMCDC Ground Lease is renewable and inheritable and runs for seventy-five year periods. It also defines the second mechanism, a Resale Formula, that continues the affordability of the home into the future. A Community Land Trust owner, agrees upon purchase to follow a defined process at resale. The lease contains a resale formula that defines the maximum resale price. A owner can not exceed that price when selling the home. This allows a CLT owner to retain their earned equity, but caps the unearned equity that can gained over time. The formula-based resale price ensures that the home stays affordable for the next owner.
There are benefits to being a homeowner. Some of these are:
- tax benefits of homeownership,
- equity building (a CLT homeowner retains their earned equity),
- accelerated payment if financially enabled, and
- stable monthly housing costs that are often lower (even from the start) than current area rents.
- housing costs do not rise with rental market inflation over time