What is a community land trust?

As a community land trust, HPICLT purchases properties from what is available on the market, retains ownership of the land, and sells the residences at affordable prices to income-qualified buyers while leasing them the land for a nominal fee. Resale restrictions require that homes be sold to HPICLT or an income-qualified buyer at a formula price that keeps the homes affordable.

By holding land for the benefit of the community, HPICLT counters increasing housing costs that are driven by rapidly appreciating land values. In addition, by focusing on preserving existing housing stock, HPICLT helps preserve the character of existing neighborhoods by reducing the number of teardowns. Finally, through the resale restrictions, HPICLT maximizes the cost-effectiveness of the public and private investment used to make land trust homes affordable to the first buyer, providing a fair return to the homeowner while ensuring continued affordability for succeeding buyers.

History of the Organization

In the latter part of the 1990s, the City of Highland Park embarked on a master planning process to update the City’s comprehensive Master Plan. In May 1997, after months of community meetings, the City Council adopted goals to guide the process. These goals reconfirmed the City’s historical commitment to housing inclusiveness. Master Plan housing goals include:

• To preserve, maintain, and promote housing of high quality that reflects the community’s commitment to cultural and economic diversity.
• To maintain and increase diversity in housing styles, sizes, types, densities, and prices or rents in order to welcome a wider array of families and individuals into the community.
• To provide affordable housing that is an integral part of neighborhoods throughout the community. . . .

As the master planning process continued, there was increasing concern about the lack of affordable housing opportunities and its negative impact on the City’s tradition of inclusiveness. The need for new affordable housing strategies was also recognized. Based on a joint recommendation of the City’s Human Relations and Historic Preservation Commissions, the City Council in November 1998 directed the Housing Commission to prepare an affordable housing plan to be incorporated in the City’s Master Plan. With assistance from the University of Illinois at Chicago’s Natalie Voorhees Center for Neighborhood and Community Improvement and Great Cities Institute, the Housing Commission studied best affordable housing practices nationwide and selected those best suited to Highland Park. In January 2001, the City Council adopted the resulting Affordable Housing Needs and Implementation Plan. Creation of a community land trust was one of the Plan’s key recommendations.

Based on direction from the City Council and extensive research, including case studies of several existing, successfully operating community land trusts (there are now some
180 in communities throughout the United States), the Housing Commission developed a framework recommendation for adapting the land trust model to meet local needs. In May 2002, the City Council appointed a Task Force to establish the land trust in accordance with the Framework Recommendations. The Task Force was assisted by Burlington Associates, a national consulting firm whose partners have been instrumental in developing the community land trust as a model for providing affordable housing.

On March 10, 2003, the Highland Park City Council accepted the Task Force report and approved the incorporation of the Highland Park Illinois Community Land Trust (HPICLT). HPICLT is a private, not-for-profit organization created to own land for the benefit of the Highland Park community. It provides and preserves permanently affordable housing on the land that it owns.

How is HPICLT funded?

As a private rather than a public entity, the CLT has the ability to raise money from foundations and other private funding sources.  It raises money for its operations and its housing activities from a variety of public and private sources, including Highland Park’s Housing Trust Fund.  The organization’s start-up funds are from the Housing Trust Fund. 

How is HPICLT governed?

An eleven-member Board of Directors governs the HPICLT.  The Board is comprised of a representative cross-section of key stakeholders in the community with an interest in affordable housing.  Three are “public representatives,” including at least one City Council member and at least one member of the Highland Park Housing Commission; it is the goal of HPICLT to have three “lessee representatives,” individuals who live on land owned by HPICLT or who represent organizations that serve the interests of the target population; and three are “general representatives” from the community at large.

How does HPICLT acquire property?

HPICLT can purchase properties available on the market.  It also can receive donated properties.  Property owners may be able to receive tax deductions for property they donate or sell below the appraised value.  Properties can include a variety of housing, such as single-family, duplexes, town homes, condominium units, small multi-unit buildings, as well as undeveloped land.  HPICLT’s initial focus is on acquiring existing attached and detached single-family dwellings.  Properties will be located on scattered sites throughout Highland Park.

What is the process for reselling the home?

When a homeowner is ready to sell, the home must be sold to HPICLT or an income qualified buyer at a formula price that gives owners a fair return on their investment, while keeping the homes affordable for future buyers.  Under the formula, the owner will receive a portion of the appreciation in the market value of the property (the home and the land) during the period of ownership.  The resale price is the lesser of the appraised value at the time of resale and the formula price.