Land trust
Encyclopedia
There are two distinct definitions of a land trust:
but their clearest history
is from the time of King Henry VIII in England
. At that time people used land trusts to hide their ownership of land so they would not have to serve in the military or suffer the other burdens of land ownership. For example an elder uncle would hold his nephew's land so they would not have to join the king's army.
To put an end to this King Henry in 1536 passed the Statute of Uses
. The statute declares that if one party holds land "to the use of" or in trust for another ("beneficiary
"), legal title is vested in the beneficiary. Obviously, if the statute had been given literal effect, there would be no trust law. Shortly after the statute was enacted, however, English courts declared that the statute only applied if the trust was passive, that is the trustee didn’t do anything but hold the land.
In the late 19th century in Chicago some people figured out that land trusts would be good things for buying property for investors to build skyscrapers on, and city aldermen figured they would be a good way to hide their ownership in land since they were forbidden to vote on city building projects when they owned land nearby. Since the law of England including the Statute of Uses was the law of America the question arose whether a land trust would be valid. This question went to the Illinois Supreme Court which ruled that if a land trust was set up with some minor duty on the trustee (such as to deed the property to the beneficiaries 20 years later), then the trust would not be considered passive and would be valid. Thus the land trust in America today is often called an “Illinois-type” land trust or "Illinois Land Trust".
Land trusts have been actively used in Illinois for over a hundred years and in recent decades have begun to be used in other states.
The creation of land trusts is not a recorded document, however the declaration of a trust is through a "deed to trustee"
. Many believe that the trust is to be filed as a public document, however this removes all of the asset protection provided by the formation of the land trust. Robert Pless pioneered the land trust technology that has been used by many firms throughout the United States since the early 1990s.
, Edmonton & Area Land Trust
, Ecotrust Canada
and Georgian Bay Land Trust
) and Mexico, and other countries worldwide, in addition to international land trusts like The Nature Conservancy and the World Land Trust.
In 1891, the Trustees of Reservations was founded, perhaps the first conservation land trust in the entire world. Conservation land trusts now operate in all 50 U.S. states, as well as many other countries. Since then, the number of land trusts has steadily increased, with most forming in the last 25 years. Over 300 new local and regional trusts were formed in the period from 1998 to 2003 alone, with the last LTA Census counting 1,537 operating in the United States. Over 1,000 of these are members of the LTA. California now has the most land trusts, with 173 operating statewide in 2003. Massachusetts
, despite being much smaller, was a close second with 154 land trusts that year.
or World Land Trust
, as well as smaller organizations that operate on national, state/provincial, county, and community levels. Conservation trusts often, but not always, target lands adjacent to or within existing protected areas. However, land areas that are particularly valuable in terms of natural or cultural resources or are home to endangered plant or wildlife are good candidates for receiving protection efforts.
Land trusts conserve all different types of land. Some protect only farmland or ranchland, others forests, mountains, prairies, deserts, wildlife habitat, cultural resources such as archaeological sites or battlefields, urban parks, scenic corridors, coastlines, wetlands or waterways; it is up to each organization to decide what type of land to protect according to its mission. Some areas have extremely limited public access for the protection of sensitive wildlife, or to allow recovery of damaged ecosystems.
Many protected areas are still under private ownership, which tends to limit access as well. However, in many cases, land trusts work to eventually open up the land in a limited way to the public for recreation in the form of hunting, hiking, camping, wildlife observation, watersports, or other responsible outdoor activities. This is often with the assistance of community groups or government programs. Some land is also used for sustainable agriculture
or ranching, or even for sustainable logging. While important, these goals can be seen as secondary to protection of the land from development.
on the property to prevent development, or purchase any mining, logging, drilling, or development rights on the land. Trusts also provide funding to assist like-minded private buyers or government organizations to purchase and protect the land forever.
As non-profit organizations, land trusts rely on donations, grants and public land acquisition programs for operating expenses and for acquiring land and easements. Donors often provide monetary support, but it is not uncommon for conservation-minded landowners to donate an easement on their land, or the land itself. Some land trusts also receive funds from government programs to acquire, protect, and manage land. Some trusts can afford to pay employees, but many others depend entirely on volunteers. According to the latest National Land Trust Census, 31% of land trusts reported having at least one full-time staff member, 54% are all volunteer, and 15% have only part-time staff.
When land is acquired, trusts will sometimes retain ownership of the land in perpetuity, or sell the land to a third party. This third party is often the government, which will usually add the land to an existing protected area, or create a new one entirely. Land trusts were instrumental in the 2004 creation of Great Sand Dunes National Park in Colorado
, as well as the expansion of Hawaii Volcanoes National Park
by 50% in 2003. Land trusts also sell land to private buyers, usually with a strict conservation easement attached. Keeping the land under private ownership has the added benefit of maintaining the land on local property tax
rolls, providing income to the local government.
Land trusts use many different tools in their protection efforts. Land trusts buy or accept donations of land in fee. This means that the landowner will sell fee simple interest to the land trust or will just give the land they own to an organization. Landowners may also sell or donate a conservation easement
to a land trust.
When a landowner donates a conservation easement to a land trust, he or she gives up some of the rights associated with the land. For example, the landowner might give up the right to build additional structures, while retaining the right to grow crops. Future owners also will be bound by the conservation easement’s terms. The land trust is responsible for making sure the easement’s terms are followed. This is done through annual or more frequent monitoring of the land.
Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while an easement on a working farm might allow the addition of agricultural structures. An easement may apply to all or a portion of the property, and need not require public access. Each conservation easement is carefully crafted to meet the needs of the landowner while not jeopardizing the conservation values of the land.
In between selling land or an easement to a land trust is an option called a bargain sale. A bargain sale is where a landowner sells a property interest to an organization for less than the market price. The amount of value between the market price and the actual sale price is considered a donation to the organization. There are other strategies to conserve land as well.
In October 2002, Property and Environment Research Center
published a report by Dominic P. Parker entitled Cost-Effective Strategies for Conserving Private Land. This paper identified numerous ways for operating land trusts more efficiently, pointing out that conservation easement and other tools for land preservation may be less costly than ownership. Sometimes the various rights associated with land ownership are separable. A preservationist organization may, for instance, buy only the extraction rights on a property with oil or minerals, and then rent those rights to extracters on the organization's terms. The terms might include requirements to protect the environment and pay the organization royalties on materials extracted. Many land trust organizations had already been using these strategies for years when this report was published.
, formed in 1981, provides technical support to the growing network of land trusts in the United States. The Alliance performs a National Land Trust Census that keeps track of the land protected by local and regional land trusts. The last Census, conducted in 2003, reported that these trusts have protected almost 9.4 million acres (38,000 km²) of land in the United States
, double the 4.7 million acres (19,000 km²) recorded in the 1998 survey. Over 5 million acres (20,000 km²) of that was protected by conservation easement in 2003. Although it does not include national or international land trusts in its Census, the LTA estimates another 25 million acres (100,000 km²) in the U.S. have been protected by those organizations. The largest amount of land protected by local and regional trusts is in the Northeast
with 2.9 million acres (12,000 km²), while the fastest growing region between 1998 and 2003 was the Pacific (consisting of California
, Nevada
, and Hawaii
), with protected land increasing 147% to 1.5 million acres (6,100 km²) in 2003.
's gramdans where villages held property in the community interest, and to European and North American land bank
s, which are quasi-public agencies that invest in land often to help build family farms or to encourage economic development. "The ideas behind the community land trust...have historic roots" in the indigenous Americas, in pre-colonial Africa, and in ancient Chinese economic systems, as Robert Swann and his co-authors saw it in 1972. The introduction in their book, "The Community Land Trust: A Guide to a New Model of Land Tenure in America" continues, "...we can say the goal is to "restore" the land trust concept rather than initiate it."
Residential land trusts emerged in the United States after calls among civil rights leaders in the 1950s and 1960s in the American South for economic reforms to reverse rampant poverty. An Institute for Community Economics was organized in the late 1960s to help residential trusts:
Residential community land trusts are now widespread in the United States, but seldom gain much notice beyond occasional local news accounts. The Institute for Community Economics in 2004 reported nearly 120 community land trusts of varied sizes in 30 states, the District of Columbia and in five Canadian provinces. While a few earlier trusts faltered, the number of land trusts in North America overall nearly tripled between the 1987 and 2004.
and gentrification
but to allow residents to accrue equity
, including sweat equity
.
A study conducted in December 2007 showed that foreclosure rates among members of 80 housing land trusts across the United States were 30 times lower than the national average. Foreclosure is destabilizing some neighborhoods as vacancy and abandonment rise and absentee landlords replace homeowners. To focus attention on the problem in Washington, D.C., Enterprise Community Partners
and City First Land Trust established a real estate owned program and acquired more than 50 properties in 2009.
Burlington Community Land Trust (BCLT) is a nonprofit, member-based organization whose mission is to ensure access to affordable homes and vital communities for all people through the democratic stewardship of land. BCLT was the first municipally funded community land trust, and today is the largest community land trust in the United States, with more than 2,500 members. BCLT has become a model of locally affordable housing and community revitalization.
that people can own in real estate
, and can be used to manage something as large and complex as a multi-state REIT
, or as common and small as a single-family home.
Corporations sometimes set up land trusts when they want to compile large tracts of land without arousing suspicion or alerting people to their plans (which would cause the asking price to rise). For example, the land for Walt Disney World near Orlando, Florida, was put together by using many land trusts to buy smaller tracts of land.
Individuals use land trusts as an alternative type of housing tenure
to owner occupancy mainly for privacy and to avoid probate. No one knows what one's bank balance or stock investments are, yet anyone with an internet connection can look up a person's real estate holdings. A person who has an auto accident or a doctor who accidentally injures a patient often becomes a target for a lawsuit if he or she owns substantial real estate investments. Many investors buy their properties through land trusts so that their name does not appear in the public records. The land trust also allows the property to immediately pass to the owner's heirs at the moment of death, rather than go through a time-consuming probate process.
Some of the other advantages of land trusts for individuals are:
Investment trust companies hold property for investment purposes and non-citizens who want long-term access to land in Mexico often enter real-estate trust agreements, called fideicomiso, with Mexican citizens, but land trust more often refers to a community scale organization. Community land trusts are established to provide low- and moderate-income families access to affordable housing
while conservation trusts protect environmentally, historically or culturally valuable places. Land trusts are also in place to protect farmland and ranchland. Despite the use of the term "trust
," many if not most land trusts are not technically trusts, but rather non-profit organizations that hold simple title to land and/or other property and manage it in a manner consistent with their non-profit mission.
Approximately 56 million acres (226,624.2 km²) of land in the United States is owned by the United States Government in trust for Native American tribes and individuals. The Indian trust lands are governed by the tribes, exempt from taxes, and are usually exempt from state laws. Indian trust lands differ from commercial land trusts in that there was no trust document that created the Indian trust and specified the duties incumbent on the federal government in managing the trust.
- a private, nonprofit organizationNonprofit organizationNonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
that, as all or part of its mission, actively works to conserve land by undertaking or assisting in land or conservation easementConservation easementIn the United States, a conservation easement is an encumbrance — sometimes including a transfer of usage rights — which creates a legally enforceable land preservation agreement between a landowner and a government agency or a qualified land...
acquisition, or by its stewardship of such land or easements; or - an agreement whereby one party (the trustee) agrees to hold ownership of a piece of real property for the benefit of another party (the beneficiary).
History
Land trusts have been around at least since Roman timesRoman Empire
The Roman Empire was the post-Republican period of the ancient Roman civilization, characterised by an autocratic form of government and large territorial holdings in Europe and around the Mediterranean....
but their clearest history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...
is from the time of King Henry VIII in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
. At that time people used land trusts to hide their ownership of land so they would not have to serve in the military or suffer the other burdens of land ownership. For example an elder uncle would hold his nephew's land so they would not have to join the king's army.
To put an end to this King Henry in 1536 passed the Statute of Uses
Statute of Uses
The Statute of Uses was an Act of the Parliament of England that restricted the application of uses in English property law. The Statute was originally conceived by Henry VIII of England as a way to rectify his financial problems by simplifying the law of uses, which moved land outside the royal...
. The statute declares that if one party holds land "to the use of" or in trust for another ("beneficiary
Beneficiary
A beneficiary in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example: The beneficiary of a life insurance policy, is the person who receives the payment of the amount of insurance after the death of the insured...
"), legal title is vested in the beneficiary. Obviously, if the statute had been given literal effect, there would be no trust law. Shortly after the statute was enacted, however, English courts declared that the statute only applied if the trust was passive, that is the trustee didn’t do anything but hold the land.
In the late 19th century in Chicago some people figured out that land trusts would be good things for buying property for investors to build skyscrapers on, and city aldermen figured they would be a good way to hide their ownership in land since they were forbidden to vote on city building projects when they owned land nearby. Since the law of England including the Statute of Uses was the law of America the question arose whether a land trust would be valid. This question went to the Illinois Supreme Court which ruled that if a land trust was set up with some minor duty on the trustee (such as to deed the property to the beneficiaries 20 years later), then the trust would not be considered passive and would be valid. Thus the land trust in America today is often called an “Illinois-type” land trust or "Illinois Land Trust".
Land trusts have been actively used in Illinois for over a hundred years and in recent decades have begun to be used in other states.
The creation of land trusts is not a recorded document, however the declaration of a trust is through a "deed to trustee"
Trust deed (real estate)
In real estate in the United States, a trust deed or deed of trust is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan between a borrower and lender...
. Many believe that the trust is to be filed as a public document, however this removes all of the asset protection provided by the formation of the land trust. Robert Pless pioneered the land trust technology that has been used by many firms throughout the United States since the early 1990s.
Conservation land trusts
Land trusts, also called land conservancies and more rarely, conservation land trusts, have been in existence since 1891. However, it is only in the last two decades that land trusts began to proliferate, and they now form one of the fastest-growing and most successful conservation movements in American history.History
Since 1891, when the first regional land trust, The Trustees of Reservations, was founded, the number of land trusts has steadily increased, and there are now more than 1,667 land trusts operating in every state of the United States. There are land trusts working in Canada (e.g. Wildlife Preservation CanadaWildlife Preservation Canada
Wildlife Preservation Canada is a non-profit, non-governmental organization working on conservation and captive breeding issues in Canada. It is headquartered in Guelph, Ontario....
, Edmonton & Area Land Trust
Edmonton & Area Land Trust
Edmonton and Area Land Trust is a regional non-profit organization based in Edmonton, Alberta, Canada. The EALT promotes conservation of the natural heritage of Edmonton and area through private stewardship , and is registered as a charitable agency with the Canada Revenue Agency.-Mission:The...
, Ecotrust Canada
Ecotrust Canada
Ecotrust Canada is a registered charity in Canada whose mission is to build a conservation economy. Founded in 1994, the organization currently has offices in Vancouver, Tofino and Prince Rupert, BC.- Approach and Initiatives :...
and Georgian Bay Land Trust
Georgian Bay Land Trust
The Georgian Bay Land Trust is a not-for-profit, registered charity, whose goal is to protect the uniqueness of the eastern shore and North Channel of Georgian Bay through the securement and on-going stewardship of land that has ecological, geological and historical importance.Through this work,...
) and Mexico, and other countries worldwide, in addition to international land trusts like The Nature Conservancy and the World Land Trust.
In 1891, the Trustees of Reservations was founded, perhaps the first conservation land trust in the entire world. Conservation land trusts now operate in all 50 U.S. states, as well as many other countries. Since then, the number of land trusts has steadily increased, with most forming in the last 25 years. Over 300 new local and regional trusts were formed in the period from 1998 to 2003 alone, with the last LTA Census counting 1,537 operating in the United States. Over 1,000 of these are members of the LTA. California now has the most land trusts, with 173 operating statewide in 2003. Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, despite being much smaller, was a close second with 154 land trusts that year.
Aims
The goal of conservation trusts is to preserve sensitive natural areas, farmland, ranchland, water sources, cultural resources or notable landmarks forever. These include enormous international organizations such as The Nature ConservancyThe Nature Conservancy
The Nature Conservancy is a US charitable environmental organization that works to preserve the plants, animals, and natural communities that represent the diversity of life on Earth by protecting the lands and waters they need to survive....
or World Land Trust
World Land Trust
The World Land Trust is a UK-based nonprofit environmental organization established in 1989. Its primary aims are to ensure conservation of plants, animals and natural communities in areas at risk...
, as well as smaller organizations that operate on national, state/provincial, county, and community levels. Conservation trusts often, but not always, target lands adjacent to or within existing protected areas. However, land areas that are particularly valuable in terms of natural or cultural resources or are home to endangered plant or wildlife are good candidates for receiving protection efforts.
Land trusts conserve all different types of land. Some protect only farmland or ranchland, others forests, mountains, prairies, deserts, wildlife habitat, cultural resources such as archaeological sites or battlefields, urban parks, scenic corridors, coastlines, wetlands or waterways; it is up to each organization to decide what type of land to protect according to its mission. Some areas have extremely limited public access for the protection of sensitive wildlife, or to allow recovery of damaged ecosystems.
Many protected areas are still under private ownership, which tends to limit access as well. However, in many cases, land trusts work to eventually open up the land in a limited way to the public for recreation in the form of hunting, hiking, camping, wildlife observation, watersports, or other responsible outdoor activities. This is often with the assistance of community groups or government programs. Some land is also used for sustainable agriculture
Sustainable agriculture
Sustainable agriculture is the practice of farming using principles of ecology, the study of relationships between organisms and their environment...
or ranching, or even for sustainable logging. While important, these goals can be seen as secondary to protection of the land from development.
Strategies
Many different strategies are used to provide this protection, including outright acquisition of the land by the trust. In other cases, the land will remain in private hands, but the trust will purchase a conservation easementConservation easement
In the United States, a conservation easement is an encumbrance — sometimes including a transfer of usage rights — which creates a legally enforceable land preservation agreement between a landowner and a government agency or a qualified land...
on the property to prevent development, or purchase any mining, logging, drilling, or development rights on the land. Trusts also provide funding to assist like-minded private buyers or government organizations to purchase and protect the land forever.
As non-profit organizations, land trusts rely on donations, grants and public land acquisition programs for operating expenses and for acquiring land and easements. Donors often provide monetary support, but it is not uncommon for conservation-minded landowners to donate an easement on their land, or the land itself. Some land trusts also receive funds from government programs to acquire, protect, and manage land. Some trusts can afford to pay employees, but many others depend entirely on volunteers. According to the latest National Land Trust Census, 31% of land trusts reported having at least one full-time staff member, 54% are all volunteer, and 15% have only part-time staff.
When land is acquired, trusts will sometimes retain ownership of the land in perpetuity, or sell the land to a third party. This third party is often the government, which will usually add the land to an existing protected area, or create a new one entirely. Land trusts were instrumental in the 2004 creation of Great Sand Dunes National Park in Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...
, as well as the expansion of Hawaii Volcanoes National Park
Hawaii Volcanoes National Park
Hawaii Volcanoes National Park, established in 1916, is a United States National Park located in the U.S. State of Hawaii on the island of Hawaii. It encompasses two active volcanoes: Kīlauea, one of the world's most active volcanoes, and Mauna Loa, the world's most massive volcano...
by 50% in 2003. Land trusts also sell land to private buyers, usually with a strict conservation easement attached. Keeping the land under private ownership has the added benefit of maintaining the land on local property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
rolls, providing income to the local government.
Land trusts use many different tools in their protection efforts. Land trusts buy or accept donations of land in fee. This means that the landowner will sell fee simple interest to the land trust or will just give the land they own to an organization. Landowners may also sell or donate a conservation easement
Conservation easement
In the United States, a conservation easement is an encumbrance — sometimes including a transfer of usage rights — which creates a legally enforceable land preservation agreement between a landowner and a government agency or a qualified land...
to a land trust.
When a landowner donates a conservation easement to a land trust, he or she gives up some of the rights associated with the land. For example, the landowner might give up the right to build additional structures, while retaining the right to grow crops. Future owners also will be bound by the conservation easement’s terms. The land trust is responsible for making sure the easement’s terms are followed. This is done through annual or more frequent monitoring of the land.
Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while an easement on a working farm might allow the addition of agricultural structures. An easement may apply to all or a portion of the property, and need not require public access. Each conservation easement is carefully crafted to meet the needs of the landowner while not jeopardizing the conservation values of the land.
In between selling land or an easement to a land trust is an option called a bargain sale. A bargain sale is where a landowner sells a property interest to an organization for less than the market price. The amount of value between the market price and the actual sale price is considered a donation to the organization. There are other strategies to conserve land as well.
In October 2002, Property and Environment Research Center
Property and Environment Research Center
The Property and Environment Research Center, or PERC, is a free market environmentalist think tank based in Bozeman, Montana, United States. Established in 1982 as the Political Economy Research Center, PERC is dedicated to original research on market approaches to resolving environmental problems...
published a report by Dominic P. Parker entitled Cost-Effective Strategies for Conserving Private Land. This paper identified numerous ways for operating land trusts more efficiently, pointing out that conservation easement and other tools for land preservation may be less costly than ownership. Sometimes the various rights associated with land ownership are separable. A preservationist organization may, for instance, buy only the extraction rights on a property with oil or minerals, and then rent those rights to extracters on the organization's terms. The terms might include requirements to protect the environment and pay the organization royalties on materials extracted. Many land trust organizations had already been using these strategies for years when this report was published.
Structure
The Land Trust AllianceLand Trust Alliance
The Land Trust Alliance, originally formed in 1982 as the Land Trust Exchange, is a national conservation organization representing more than 1,700 land trusts across the United States...
, formed in 1981, provides technical support to the growing network of land trusts in the United States. The Alliance performs a National Land Trust Census that keeps track of the land protected by local and regional land trusts. The last Census, conducted in 2003, reported that these trusts have protected almost 9.4 million acres (38,000 km²) of land in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, double the 4.7 million acres (19,000 km²) recorded in the 1998 survey. Over 5 million acres (20,000 km²) of that was protected by conservation easement in 2003. Although it does not include national or international land trusts in its Census, the LTA estimates another 25 million acres (100,000 km²) in the U.S. have been protected by those organizations. The largest amount of land protected by local and regional trusts is in the Northeast
Northeastern United States
The Northeastern United States is a region of the United States as defined by the United States Census Bureau.-Composition:The region comprises nine states: the New England states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont; and the Mid-Atlantic states of New...
with 2.9 million acres (12,000 km²), while the fastest growing region between 1998 and 2003 was the Pacific (consisting of California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
, and Hawaii
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...
), with protected land increasing 147% to 1.5 million acres (6,100 km²) in 2003.
History
Community land trusts trace their conceptual history to IndiaIndia
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
's gramdans where villages held property in the community interest, and to European and North American land bank
Land Bank
A land bank is a bank that issues long-term loans on real estate in return for mortgages. This term could also apply to:*The Land Bank of Taiwan, a wholly state-owned bank of the Republic of China...
s, which are quasi-public agencies that invest in land often to help build family farms or to encourage economic development. "The ideas behind the community land trust...have historic roots" in the indigenous Americas, in pre-colonial Africa, and in ancient Chinese economic systems, as Robert Swann and his co-authors saw it in 1972. The introduction in their book, "The Community Land Trust: A Guide to a New Model of Land Tenure in America" continues, "...we can say the goal is to "restore" the land trust concept rather than initiate it."
Residential land trusts emerged in the United States after calls among civil rights leaders in the 1950s and 1960s in the American South for economic reforms to reverse rampant poverty. An Institute for Community Economics was organized in the late 1960s to help residential trusts:
- Gain control over local land use and reduce absentee ownership
- Provide affordable housing for lower income residents in the community
- Promote resident ownership and control of housing
- Keep housing affordable for future residents
- Capture the value of public investment for long-term community benefit
- Build a strong base for community action
- Preventing foreclosure
Residential community land trusts are now widespread in the United States, but seldom gain much notice beyond occasional local news accounts. The Institute for Community Economics in 2004 reported nearly 120 community land trusts of varied sizes in 30 states, the District of Columbia and in five Canadian provinces. While a few earlier trusts faltered, the number of land trusts in North America overall nearly tripled between the 1987 and 2004.
Aims
Community land trusts (CLT) rely on community members, word of mouth and strategic communications to attract new residents, members and supporters. In residential land trusts, the CLT usually owns the land, leasing it long-term to the land user who owns the home and other improvements on the land. CLTs usually retain rights to buy buildings from residents who move out of the community. The goal of residential trusts is often to protect housing prices from real estate speculationSpeculation
In finance, speculation is a financial action that does not promise safety of the initial investment along with the return on the principal sum...
and gentrification
Gentrification
Gentrification and urban gentrification refer to the changes that result when wealthier people acquire or rent property in low income and working class communities. Urban gentrification is associated with movement. Consequent to gentrification, the average income increases and average family size...
but to allow residents to accrue equity
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
, including sweat equity
Sweat equity
Sweat equity is a term that refers to a party's contribution to a project in the form of effort --- as opposed to financial equity, which is a contribution in the form of capital....
.
A study conducted in December 2007 showed that foreclosure rates among members of 80 housing land trusts across the United States were 30 times lower than the national average. Foreclosure is destabilizing some neighborhoods as vacancy and abandonment rise and absentee landlords replace homeowners. To focus attention on the problem in Washington, D.C., Enterprise Community Partners
Enterprise Community Partners
Enterprise Community Partners, formerly The Enterprise Foundation, is a Columbia, Maryland-based nonprofit organization with offices nationwide. Founded in 1982 by developer/philanthropist James W...
and City First Land Trust established a real estate owned program and acquired more than 50 properties in 2009.
Burlington Community Land Trust (BCLT) is a nonprofit, member-based organization whose mission is to ensure access to affordable homes and vital communities for all people through the democratic stewardship of land. BCLT was the first municipally funded community land trust, and today is the largest community land trust in the United States, with more than 2,500 members. BCLT has become a model of locally affordable housing and community revitalization.
Other land trusts
A land trust is a useful way to manage complex divisions of the Bundle of RightsBundle of Rights
The bundle of rights is a common way to explain the complexities of property ownership. Teachers often use this concept as a way to organize confusing and sometimes contradictory data about real estate....
that people can own in real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
, and can be used to manage something as large and complex as a multi-state REIT
Real estate investment trust
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors...
, or as common and small as a single-family home.
Corporations sometimes set up land trusts when they want to compile large tracts of land without arousing suspicion or alerting people to their plans (which would cause the asking price to rise). For example, the land for Walt Disney World near Orlando, Florida, was put together by using many land trusts to buy smaller tracts of land.
Individuals use land trusts as an alternative type of housing tenure
Housing tenure
Housing tenure refers to the financial arrangements under which someone has the right to live in a house or apartment. The most frequent forms are tenancy, in which rent is paid to a landlord, and owner occupancy. Mixed forms of tenure are also possible....
to owner occupancy mainly for privacy and to avoid probate. No one knows what one's bank balance or stock investments are, yet anyone with an internet connection can look up a person's real estate holdings. A person who has an auto accident or a doctor who accidentally injures a patient often becomes a target for a lawsuit if he or she owns substantial real estate investments. Many investors buy their properties through land trusts so that their name does not appear in the public records. The land trust also allows the property to immediately pass to the owner's heirs at the moment of death, rather than go through a time-consuming probate process.
Some of the other advantages of land trusts for individuals are:
- Sales price of the property can be kept off the public records.
- Property taxes are lower if the purchase price is kept private.
- Judgments or liens (such as IRS liens) against an individual's name are not a lien against their land trust property.
- Partners can more easily continue a project if one dies or is divorced.
- Interests can be transferred quickly without recording a deed.
- Managing a rental property is easier when the trustee can be blamed.
- Negotiating a purchase or sale can be easier when the trustee can be blamed.
- Liability on financing can be limited to the assets of the trust.
Investment trust companies hold property for investment purposes and non-citizens who want long-term access to land in Mexico often enter real-estate trust agreements, called fideicomiso, with Mexican citizens, but land trust more often refers to a community scale organization. Community land trusts are established to provide low- and moderate-income families access to affordable housing
Affordable housing
Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
while conservation trusts protect environmentally, historically or culturally valuable places. Land trusts are also in place to protect farmland and ranchland. Despite the use of the term "trust
Trust law
In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
," many if not most land trusts are not technically trusts, but rather non-profit organizations that hold simple title to land and/or other property and manage it in a manner consistent with their non-profit mission.
Approximately 56 million acres (226,624.2 km²) of land in the United States is owned by the United States Government in trust for Native American tribes and individuals. The Indian trust lands are governed by the tribes, exempt from taxes, and are usually exempt from state laws. Indian trust lands differ from commercial land trusts in that there was no trust document that created the Indian trust and specified the duties incumbent on the federal government in managing the trust.
See also
- Community land trustCommunity land trustA community land trust is a nonprofit corporation which acquires and manages land on behalf of the residents of a place-based community, while preserving affordability and preventing foreclosures for any housing located upon its land.-Key features:...
- Conservation communitiesConservation communities-What is a conservation community?:A conservation community is a group of individuals and families living in a community who are committed to saving large parcels of land from ecological degradation...
- CooperativeCooperativeA cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
- Extractive reserveExtractive reserveAn extractive reserve is an area of land, generally state-owned where access and use rights, including natural resource extraction, are allocated to local groups or communities....
- Green beltGreen beltA green belt or greenbelt is a policy and land use designation used in land use planning to retain areas of largely undeveloped, wild, or agricultural land surrounding or neighbouring urban areas. Similar concepts are greenways or green wedges which have a linear character and may run through an...
- Natural Lands TrustNatural Lands TrustThe Natural Lands Trust, headquartered in Media, Pennsylvania, is one of the oldest regional land conservation groups in the United States. Founded by a group of avid bird-watchers in 1953, as the Philadelphia Conservationists, the Trust works in the suburban counties near Philadelphia to the...
- GamiingGamiingGamiing is a nature centre located on the western shore of Pigeon Lake, Ontario, Canada. Gamiing is a grassroots not-for-profit organization and is registered as a charitable organization within Canada. Gamiing was founded in 1995 by current volunteer Executive Director, Mieke Schipper...
Nature Centre