New Communities, Inc. and the Origin of the Community Land Trust Movement
The False Promise of Affordability by Tenants To Homeowners, Inc.

Robert Swann worked with Slater King, a cousin of Martin Luther King, Jr. to found the first community land trust (CLT) in the U.S. in 1969, New Communities, Inc.  It was a 5700 acre rural community near Albany GA with the purpose of securing land ownership for African-American farmers.  Ownership of the land was established by two mechanisms.  

First of all, as a genuine CLT, the New Communities CLT held in trust the full 5700 acres, and all the residents were members of the CLT.  As such, every member of the community owned shares of the CLT.  This is a legal arrangement called tenants in common - Tenants in Common for Real Estate Ownership - by which individuals owned all of New Communities acreage in common.  

Secondly, the New Communities CLT used a ground lease system.  A ground lease is another legal arrangement which allowed individuals to build homes on the land, and hold title to their home directly - Ground Lease Definition.  As such, the person(s) could build a home for less because they didnt have to finance the land under it (which the CLT owned).

Therefore, a genuine CLT has specific characteristics: 
  1. The entity that holds title to the land holds it in perpetuity as a Community Land Trust (CLT).
  2. The entity that holds title to a structure on the CLT land is distinct from the CLT. This entity can be an individual, an agency, a builder, a developer, etc. (resident).
  3. The CLT issues a ground lease to the resident with terms enabling them to build and inhabit the structure they hold title to.
  4. The resident is a member of the CLT who owns the land equally along with other CLT members as tenants in common.
  5. The CLT members therefore hold two kinds of equity proportionate equity of the land in proportion to the number of members, and full equity of the structure that each holds title to.
"Tenants to Homeowners Inc." has created a deviant of a genuine CLT. Although the Lawrence Community Housing Trust (LCHT) does hold title to the land, and they do issue ground leases to those who reside on the LCHT land, the similarity ends there (its telling that they call it a housing trust, not a land trust).
  1. TTH, Inc., as a legal entity with a Board of Directors and employees, has created the LCHT to hold exclusive title to all their property (estimated in excess of $5,000,000).
  2. No residents are shareholders or members of LCHT.
  3. No residents are tenants in common in ownership of any land held by the LCHT.
  4. No residents hold equity in the LCHT or any of its land.
  5. Furthermore, the terms of any ground lease issued by TTH, Inc. to any resident limit the resident to only 25% capture of the equity of their house. TTH, Inc. retains 75% of the equity of the house.
  6. The terms of any ground lease issued by TTH, Inc. are established entirely by TTH, Inc. with no participation or vote by any resident.
  7. Therefore, all benefits from ownership of the LCHT land accrue entirely to TTH, Inc., and 75% of the benefits from ownership of houses on the LCHT land accrue to TTH, Inc.
  8. Residents are made a sweet deal of a low purchase price on a house on the front end, but on the back end they are deprived of significant equity. With such low equity gained, they are in a poor position to acquire a mortgage on the open market.
  9. This is not advantageous to residents of TTH houses in the long term.