Community Land Trusts: Institutionalizing the Human Flourishing Theory of Property

Cornell Journal of Law and Public Policy Cornell Journal of Law and Public Policy

Volume 29 Issue 3 Spring 2020

Article 7

Community Land Trusts: Institutionalizing the Human Flourishing Community Land Trusts: Institutionalizing the Human Flourishing

Theory of Property Theory of Property

John A. Lovett Loyola University New Orleans College of Law

Part of the Law and Philosophy Commons, Law and Society Commons, and the Property Law and

Real Estate Commons

ESSAY

COMMUNITY LAND TRUSTS: INSTITUTIONALIZING THE HUMAN FLOURISHING THEORY OF PROPERTY

630 638

By joining together to form a CLT, people find that they can affect the economic structures that surround them. By seeking control of land as a community they can hope to benefit as individuals without sacrificing comto benefit munity through promoting community interests. It is an exciting discovery-one that nourishes the roots of community life, that stimulates the side of human nature that needs community and wants to work for it.

interests. In fact, they can hope

The Community Land Trust Handbook (1982)1

The communities that enable our capabilities require resources so that they may also continue to flourish. My obligation to support these communities has consequences for me as a property owner. It means that I owe certain duties, some of which are negative, others affirmative, to members of my communities to facilitate development of their necessary capabilities. These duties [are] not imposed externally by the state. Rather, they are inherent in what it means to own property, just in the way that the duties not to commit waste and nuisance are.

They are, that is, conceptually entailed in ownership.

Gregory S. Alexander (2018)2

Greg Alexander has made a powerful case that an owner of property in a free and democratic society will be required from time to time to provide resources, in ways appropriate to that owner, to support the development of other persons' human capabilities.3 This claim builds on Alexander's earlier insight that "property owners owe far more responsibilities to others, both owners and non-owners, than the conventional imagery of property rights suggests."4 Alexander's insight-the kernel of his human flourishing theory of property law-has inspired much of my scholarship in the last ten years.5 However, many of the property relationships in which Alexander identifies the social obligation norm at work are ones mediated by judges through their work in resolving disputes between competing property owners or between property owners and non-owners or the state. Other property relationships analyzed by Alexander originate in legislative enactments. In this essay, I focus attention on legal relationships epitomizing Alexander's human flourishing theory that owe their genesis in the collaborative work of community activists, who often began their efforts from positions of devout religious conviction, and public-spirited transactional lawyers. The product of that work is the property law institution known as the Community Land Trust (CLT).

Interestingly, and maybe tellingly, one of the crucial moments in the history of the CLT movement occurred where we gather today--on the campus of Cornell University--thirty-nine years ago.6 In the summer of 1980, Chuck Matthei of the Institute for Community Economics (ICE)

and Chuck Geisler of Cornell's Department of Rural Sociology led a weeklong institute on economic democracy convened under the auspices of Cornell's School of Industrial and Labor Relations and the Department of City and Regional Planning.7 Farmers, urban activists, a Franciscan priest, students, members of church-related housing cooperatives, and an attorney involved in community development, among others, all gathered to discuss the growing interest in CLTs. The participants decided that the movement needed a book that could not only explain what a CLT is and how to start one, but also provide case studies of the halfdozen or so CLTs that had already emerged by that time.9 After a number of additional meetings, ICE eventually published The Community Land Trust Handbook (1982),10 perhaps the seminal text in the history of the CLT movement.11

I believe the CLT movement provides students of property law an opportunity to appreciate some of the advantages of Alexander's human flourishing theory of property and teaches some important lessons about how property institutions evolve. In this essay, I first outline the key features of a CLT. Next, I explore how Alexander's human flourishing theory of property can be used to justify and further explicate the CLT model. Finally, I offer some thoughts on the challenges of taking the CLT model to scale and on the kind of property law reform promised by the CLT movement and Alexander's human flourishing theory of property.

Over the last half a century, community land trusts (CLTs) have been established for many purposes. In the late 1960s and 1970s, community activists, working mainly in marginalized rural places, estab-

the first handful of CLTs.12 The very first CLT, New lished Communities, Inc., established in 1968, gave African-American farmers a chance to acquire security of tenure and farm on one large tract of land in southwest Georgia.13 In 1978, Marie Cirillo, a former nun, founded a CLT that came to be known as the Woodland Community Land Trust, in Clairfield, Tennessee, to combat depopulation and absentee land ownership in a remote valley of Appalachia. 14 The same year, Sister Lucy Poulin and several Carmelite nuns formed the Covenant Community Land Trust to give low-income families in Hancock County, Maine, on the eastern shore of Penobscot Bay, a chance to own homes.15 By the middle of the 1980s, however, and, not coincidentally, soon after the publication of the Community Land Trust Handbook, CLTs began to be used to provide long-term affordable housing in two kinds of urban areas-those hit hard by deindustrialization and in thriving areas where long-time residents faced threats from rapid development.16 The critical features of the CLT model emerged gradually by accretion with each experiment. By now, those features are well recognized. Although one prominent CLT proponent identifies as many as ten distinctive features of a CLT,17 five key design characteristics, in their unique constellation in a CLT, distinguish this institution from other kinds of property institutions functioning in the U.S. today.18

The first essential element of a CLT is a non-profit entity that acquires ownership of land or a building and manages that resource in the long-term interest of a community.19 The community served by a CLT can be defined as narrowly as a particular urban neighborhood,20 as a mid-sized city or town,21 or as widely as an entire metropolitan region.22 CLT advocates often describe the entity's mission as one of "trusteeship" or "stewardship" in an attempt to capture the idea that the CLT does not serve any immediate short-term need, but rather must manage the resources it owns --land and sometimes buildings on land--for the interests of future generations.23 To use Alexander's language, the first element of a CLT formalizes a relationship of reciprocity-and, in particular, what Alexander calls "serial reciprocity"-between the present generation and a future generation, even though the members of the current generation cannot talk to or personally identify the future beneficiaries of their actions.24 A CLT is thus, first and foremost, a "trust," one that imposes fiduciary duties that have both a territorial and inter-genera-

tional scope. The "life-transcending project" of the CLT founders, to use Alexander's helpful phrase, is to create a property institution that preserves assets for future generations, rather than allow those assets to be "milk[ed]" by the present generation of owners.25

The second core element of a CLT involves separating the ownership of improvements from the ownership of land on which the improvements are located.26 This element depends on an old-fashioned legal tool-a ground lease. The CLT acquires land by purchase or donation, but it then leases that land to individuals, families, businesses or other persons who will then own the improvements they construct on the land or that already exist on that land and who will then enjoy exclusive use and control of the improvements.27 The lessee, in turn, will pay a ground lease fee to the CLT that it can use for a variety of stewardship purposes.28 The ground lease will usually restrict the use of the land or improvements to certain activities (for example, residential use) and will also likely require owner-occupancy or at least strictly limit sub-leasing.29 The term of the ground lease is usually 99 years and is often renewable.30 This property concept, of course, is not new. Many centuries ago, western legal systems recognized the need to break free from the numerus clausus enforced by the old Roman law maxim of superficies solo caedit and allow for horizontal segregation of ownership through the creation and transfer of a "superficiary right."31 Nevertheless, it is worth

noting the ingenuity of the CLT pioneers in seeing the creative, social justice potential inherent in this classic legal device.

The third critical component of a CLT is a restriction on who can become a lessee-owner of an improvement situated on land owned by a CLT-in other words, a limitation on entrance.32 Most CLTs restrict the acquisition of a leasehold interest in the improvements that can be constructed on or already exist on the CLT-owned land to income-qualified households. In fact, eight out of the fifteen state statutes that regulate CLTs in the U.S. today impose income qualifications on who can become a resident.33 The absence of income qualifications on entrance in the remaining statutory regimes suggests this limitation on entrance is not necessarily a required feature of a CLT, but rather a chosen one (at least in some places), and implies that the CLT model could, in theory, be used by for-profit developers and offered to more affluent home purchasers.34 As we reflect on entrance limitations, however, it is important to remember, as Eduardo Penalver has taught us, that property as entrance can function "as a means of joining individuals to each other in community."35 Further, it can take strong or weak forms depending on the intensity and form of the restrictions on entrance (and exit) and the kinds of communities those restrictions enable.36 Thus, the CLT forces us to confront the question of whether its limitations on entrance serve a normatively attractive end.

The fourth component of a CLT is perhaps even more challenging to conventional norms of property ownership today. Here, I refer to a CLT's controls and limitations on alienability of the leasehold interest, or, as Dagan and Heller might call them, restrictions on exit.37 The crucial legal tool here is a preemptive right (a right of first refusal) declared in the ground lease that: (1) gives the CLT the right to reacquire the

improvement owned by a lessee-resident when the lessee-resident decides to put her property on the market; or (2) requires the leaseholder to sell her interest to another income-qualified, third-party buyer who is usually selected from a preapproved waiting list established by the CLT.38 In either case, a resale formula established in the ground lease establishes the price the leasehold seller will receive from the CLT or the third-party buyer.39 The resale formula, or what Dagan and Heller would call an "exit tax,"40 limits the economic return to the seller of the leasehold interest. Viewed together, the preemptive right and resale formula are often referred to collectively as the resale restriction or the shared equity requirement of a CLT.41

Although there are a number of ways to structure the resale formula, the basic idea is simple. When the leasehold owner decides to sell the house or other improvement situated on the CLT owned land, she will receive some of the appreciation in economic value resulting from exogenous factors such as generally rising real estate prices, localized economic development, or sudden scarcity of housing supply caused by a natural disaster. The community, as represented by the CLT, captures the rest of the appreciation. This is what John Stuart Mill called "the social increment" in land value attributable to growth and development of surrounding society and what Henry George wanted to tax with his "single tax."42 By decoupling the commodity value of an asset like a home from its use value, the resale formula enables a new household to enter the community of the CLT at a fraction of what would otherwise be its "fair market value," thus assuring the long-term affordability of the resource. The shared-equity arrangement also allows the CLT to preserve an initial subsidy-perhaps from the government or from a charitable donor-that enabled it to acquire the land or construct the improvement in the first place. Although the precise amount of equity sharing is subject to private ordering, most CLTs, it seems, give the resident-lessee about 25% of the appreciated value of the property by using either an "appraisal based"

formula or an "indexed formula."43 Other CLTs use an "itemized formula" or "mortgage-based" formula either to capture more precisely the value of improvements and repairs made by the resident-lessee or to make sure the improvement remains affordable to certain income-qualified classes of potential buyers.44

The last crucial feature of a CLT is tied to the first-a corporate structure that guarantees control of the non-profit entity by a board comprised in equal proportions of (1) lessee-residents, (2) non-lessee residents of the community (sometimes called non-member residents or non-member directors), and (3) representatives of the broader community and public at large.45 The third category of so-called "independent directors" can include representatives of stakeholders such as local governments or non-profit funders of the CLT. This broad, community-wide control is vital, according to many CLT advocates, because it assures that the stewardship mission of the CLT endures over time and that the CLT can respond to unanticipated changes in social and economic circumstances if necessary.46 In short, the CLT assigns ultimate "agenda-setting authority" for its property to a collective body made up of internal and external members and charges this body with responsibility for administering the CLT's assets for the long-term interests of the entire CLT community.47

In light of these five design features of a CLT, it is quite clear that a CLT is "governance property" par excellence.48 In fact, it is a uniquely complex form of governance or "entity" property because it combines elements of a trust, a lease, and a non-profit corporation.49 In Alexander's terms, a CLT combines two key elements of governance property:

(1) "verticality of relationships" (because the CLT owns the land, sets the terms of the ground lease, and can prohibit certain uses of the property subject to the ground lease); and (2) "nonconcurrency of enjoyment" (because the CLT's preemptive right allows it to determine who succeeds a particular leaseholder's interest).50 At the same time, the CLT still allows elements of exclusion in property because the leaseholder enjoys an exclusive right to use the improvement within the limits of the use restrictions of the ground lease. From this cumulative perspective, the CLT also proves that a novel or idiosyncratic property form that does not initially fit into a standardized menu of property institutions (the numerus clausus) can nevertheless achieve recognition by a legal system over time.51

Over the years, CLT advocates have advanced many arguments to garner support for this relatively new property institution. Most fall into one of several buckets:

(1) Economic efficiency rationales based on diversifying homeowner assets and maximizing the value of government or donated affordable housing subsidies.52

(2) A justice-based, social-political argument based on the principle, originally theorized by John Stuart Mill and popularized in the U.S. by Henry George, of retain-

ing the "social increment" inherent in land value and separating that value from the consumptive or utility value of land and improvements.53

(3) A more consequentialist, social-political argument based on alleged gains in social capital, collective efficacy, and political confidence that can arise from the bonds of trust and connectivity spawned by a CLT.54

(4) A social-political argument based on the ability of a CLT to protect local residents who are present at the beginning of processes of community redevelopment and gentrification and to allow those residents to remain in place as these processes progress (i.e., the "bulwark against displacement" argument).55

(5) A specialized economic efficiency argument based on data suggesting that CLT homeowners experienced lower levels of default and foreclosure in the 2007-2010 Great Recession than similarly situated low- or modestincome homeowners who financed home acquisitions with either standard or subprime mortgages (i.e., "the resiliency argument").56

In addition to these powerful rationales, there is also a social obligation or human flourishing argument for CLTs. Admittedly, I am not the first to see a neo-Aristotelian justification for CLTs. In a brilliant 2009 article appearing at almost the same time that the Progressive Property movement took flight, James Kelly argued that CLTs, and especially those seeking to promote economic diversity in inner-city neighborhoods, illustrated "a 'revolutionary Aristotelianism,' one that not only criticizes the instrumentalism and individualism that hamper conventional understandings of private land ownership but also offers a constructive alternative vision."57 Indeed, Kelly urged CLT advocates and practitioners to turn to the insights of Alasdair MacIntyre and Amartya Sen to build a persuasive philosophical case for CLTs that could supplement and expand upon policy discussions focused at that time on the varieties of social capital.58

Greg Alexander's human flourishing theory of property can now provide another, even more narrowly tailored theoretical justification for CLTs, revealing the virtues of several distinctive CLT features in terms of property theory. In Property and Human Flourishing, Alexander draws many useful distinctions among the kinds of obligations that property owners in a free and democratic society owe to other individuals, institutions, and the community at large.59 First, Alexander points out that all property owners owe some general obligations to a community.60 These general obligations can be, and often are, redistributive in their inspiration and effect, and they can include affirmative obligations to pay taxes to support the public institutions and background infrastructure that

enable other community members to acquire the capabilities necessary for their own human flourishing.61 Yet general obligations can also be negative in nature, such as the obligations imposed by noise ordinances, prohibitions on polluting the environment, and, of course, zoning regulations sanctioned by public welfare, health and safety interests.62 These restrictions can have significant redistributive impacts in moments of legal transition.63

Alexander also contends that property owners owe specific obligations to other members of a community. For Alexander, these specific obligations, which tend not to be redistributive in origin, might include, for example, the affirmative obligation to shovel snow from a sidewalk to allow neighbors to walk down the street, or an obligation to trim a tree branch hanging across a neighbor's property.64 Regardless of their affirmative or negative character or their large or small scale, what is crucial for Alexander is the source of those property obligations. In contrast to the more classically liberal property theory advanced by Hanoch Dagan who argues that property owners, as autonomous individuals, enter into and remain in property relationships through voluntary commitments based on expectations of either long-term or short-term reciprocity,65 Alexander contends that property owners have an inherent, non-reciprocal duty to support the communities that are essential to their own ability to acquire the capabilities that allow them to pursue lives that offer the promise of human flourishing.66 Stated in its plainest terms, Alexander's essential claim is that our general and specific obligations as property

owners arise from-and are entailed by-our own human vulnerability and social dependence on others.67

Reframing Limitations on Entrance and Exit as Opening Doors to the Vulnerable. Turning to the CLT model of property ownership, we can now see that many of the core design features of a CLT reinforce Alexander's fundamental insight-that our general and specific obligations to others flow from our vulnerability and dependency. Consider the two liminal elements of CLT structure-limitations on who can enter a CLT community as a leasehold owner and limitations on exit and alienability.

These two sets of limitations act as institutional ground rules reminding the CLT community that there will always be other people, not yet born, or who do not yet reside in the particular geographic community served by the CLT, who will be vulnerable and unable to enter into the advantageous position of a homeowner without meaningful help from others in the community. Think about entrance limitations first. Even though for-profit developers might theoretically drop this feature of the CLT structure to create alternative shared equity models that might appeal to affluent or middle class market participants,68 most CLT founders and practitioners have correctly focused their institutional resources by limiting access to individuals who might not otherwise access homeownership without the assistance of the CLT structure.69

In the same way, limitations on alienability-the limitation on the amount of equity appreciation a CLT leaseholder-homeowner can retain upon selling her leasehold interest-reminds the first generation of income qualified CLT leaseholders who benefited from the initial limitations on entrance that they now have a specific obligation to give other currently vulnerable members of the community, who have not yet enjoyed the stabilizing, wealth-creating, social capital forming benefits of home ownership, an opportunity to join a community of homeowners.70 Drawing on another key theme of Alexander's human flourishing theory,

these two design features-and in particular the limitation on equity appreciation-dramatically embody the possibility that property owners have inter-generational and infra-generational obligations.71 Those obligations include preserving and not wasting the underlying resourcewhether it is housing or agricultural land-so future generations can use and enjoy it as well.

New Metaphors for Ownership. Another valuable insight in Alexander's human flourishing account of property is his identification of the importance of metaphor. In a crucial portion of his book, Alexander explains the deficiencies of the frequently employed gatekeeper metaphor for property and, instead, argues for either a "stewardship" model of ownership or, better yet, a "good neighbor" model of ownership.72 For Alexander, the good neighbor metaphor is the most apt because it constantly demands that we see ownership through a relational lens.73 A person's ability to flourish constantly requires the support of others. A property owner cannot enjoy his property without the cooperation of neighbors and the contributions of others to the civil and social infrastructure of community.74 The CLT structure reinforces this relational aspect of property ownership.

As John E. Davis has powerfully written, the ground lease itself-

the "common ground" to use his metaphor-serves to connect the CLT landowner and the CLT leaseholder in a closely-knit relationship of mutual dependency.75 If a CLT leaseholder gets behind on his or her mortgage note, the CLT landowner/lessor receives notice and has a real opportunity and interest to help the leaseholder cure the default and remain in the home.76 Similarly, the landowner and leaseholder can be equal partners in representing the interests of the CLT when it comes to dealing with exogenous threats to the community, whether those threats

result from inattentive public officials or neighboring property owners who propose developments that may harm the local environment or the public health, safety and welfare of the community.77

Mapping Communities in Space, Time and Intensity. Another benefit of Alexander's account of human flourishing is his detailed focus on the location, nature, scale, and intensity of the communities to which property owners owe their general and specific obligations to support others in acquiring both the physical and economic resources and the habits of sociability and practical reasoning that are essential to human flourishing.78 Alexander usefully sketches two theoretical maps that help us see where the particular communities to which we owe our general and specific obligations as property owners fit in the broader panorama of communal allegiances.

First, Alexander observes that some groups to which we owe obligations are nothing more than associations-groups of more or less selfinterested people bound by contract or thinly shared interest.79 Examples might include, for example, a trade association or a professional organization or a group of individuals who engage in some kind of recreational activity from time to time. Other groups are deeper, stronger, more intensive communities-a collection of people or property owners who owe thick obligations to support the development of human capabilities of other persons in the group because of their membership in the group itself, not because they will receive some reciprocal quid pro quo.80 Examples might include a church, synagogue or mosque, or a group of individuals who form an intentional residential community. Of course, groups are not always situated neatly on either the associational or communal end of what might be called Alexander's axis of membership affiliation, but his identification of these degrees of communal connectivity can help us see that many founders of CLTs hope to create communal bonds that transcend a mere association of people who might have a common interest in property-value preservation, as would be the case in a typical common-interest-community governed by a large homeowner's association, and instead create a stickier, thicker kind of community.81

Alexander also identifies another spectrum of community classification. This one features communities defined either by territorial boundaries or by non-territorial interests.82 In drawing this schematic, Alexander turns to sociologist Phillip Selznick and identifies three additional criteria for defining a community. First, people in a community share some interest in common.83 This common interest can be physical proximity; for example, living in the same apartment building, neighborhood or city. It could also be a passion; for example, playing or enjoying a particular kind of music or engaging in some particular kind of outdoor recreation. It could also involve membership in a profession or a deeply-felt religious commitment. Second, people who belong to a community feel that their membership in the group implicates their "whole person."84 In other words, membership in the community is truly constitutive of identity, although it may not define the entirety of one's identity. Finally, community membership implies some "normative weight."85 This means that belonging to a specific community is objectively good; one's life is objectively better as a result of belonging to the particular community. Perhaps this is all just another way of framing the distinction between relatively thin associations and thicker, stickier communities. Nonetheless, the Alexander-Selznick criteria help us see that some powerful communities might be either territorial or non-territorial, yet their strength and resiliency will be measured in terms of how much sacrifice members feel obligated to make to support the capabilities of other members of that community. Alexander concludes this portion of his theory by describing our property allegiances as a series of concentric circles emanating further and further away from a particular individual.86

Alexander's mapping of the nature, scale, and location of various kinds of communities enables us to see how a CLT both resembles and differs from a common interest community (CIC). On one hand, the territorial scale of a CLT and a CIC governed by a homeowner's association could be quite similar. However, the ground lease structure of the CLT, along with the support obligations that the CLT landowner holds and the exit limitations imposed through the resale formula suggest that the CLT is located further along the axis of membership affiliation towards thick community than a typical common-interest-community governed by a homeowner's association. Further, the requirement that leaseholders re-

linquish a substantial portion of their equity appreciation implies that their membership in the CLT community not only implicates more of the whole person, but also demands a thicker normative commitment to the principle that other people-whether present today or not yet bornshould have an opportunity to join that community.

Shedding Light on the Dark Side. One more virtue of Alexander's human flourishing account of property ownership is his response to the common critique of strong community--informed obligations voiced by critics like Jeremy Waldron who warn that communities too often have a "dark side" because they are inevitably exclusive or because they inherently impose restrictions on behavior in order to define who belongs to the community.87 The dark side critics point out that because communities often need to engage in boundary-making to create and maintain internal cohesion, the verge of becoming oppression."88 Alexander takes these warnings seriously, but he ultimately argues that they miss the big point about property and community. All of us eventually need to belong to some kind of community in order to flourish as human beings. Moreover, when the forms of exclusion found in a property community like a CLT are themselves essentially chosen, rather than imposed through illiberal subordination, when they entitle members to participate in circles of mutual support, and when they recognize others' dependency, we should not let their presence deter us from participating or supporting such a community.89

they are "always on

III.

Having visualized how Alexander's human flourishing theory of property underscores the humanistic virtues of the CLT model, one cannot help but wonder why the CLT model of shared ownership and shared equity appreciation is not used more widely. I admit it is not easy to obtain concrete data on the uptake of CLTs in the U.S. property system today. In 2009, John Kelly counted more than 160 democratically controlled CLTs sustaining either homes or community-owned common spaces in the U.S.90 In 2017, John Davis, the most prolific author on CLTs, reported the existence of fewer than 300 organizations (270 to be specific), either calling themselves CLTs or acting like one, in the U.S.91 A journalistic source, relying on the same now unavailable data bank that

Davis used, reported in 2016 that the organizational members of the Community Land Trust Network controlled about 25,000 rental units and protected 13,000 home-ownership units nationally.92 Another leading researcher in the field affiliated with the Grounded Solutions Network, the successor to the Community Land Trust Network, estimates that as of 2018 there were approximately 165 CTLs that actually held homeownership units and those units numbered approximately 12,000 homes.93 Although certainly not trivial, the relatively modest spread of CLTs in the U.S. is surprising given the popularity of the idea among many housing advocates and commentators. What accounts for this discrepancy?

Commentators have offered a number of explanations for the lagging prevalence of CLTs. These include: (1) resistance by local municipalities that fear that CLTs will reduce the municipal property tax base;94 (2) resistance by lenders who do not like the complexity and added transaction costs of financing CLT-arranged home acquisitions and who seek to impose affordability-stripping provisions in mortgage riders;95 and (3) the absence of predictability-enhancing uniform state laws.96 However, many of these roadblocks can be alleviated and already are being overcome in many places.97 Further, there is growing evidence that cities and

counties interested in increasing and maintaining the supply of affordable housing and gaining the most leverage from limited municipal funding sources are increasingly playing the role of CLT instigator, governor and steward.98 The future growth of this form of property innovation may well lie in partnerships between municipalities and CLTs.

Two more significant obstacles to CLT expansion remain. The first is quite simple: lack of funding. To make a newly constructed or newly acquired and renovated housing unit affordable to an income-qualified home buyer, some subsidy is usually required to cover the gap between the fair market value sales price and the price offered by a CLT.99 Federal funding for long-term affordable housing that could provide this subsidy, however, has shrunk or remained flat.100 Further, many local leaders have chosen to use the funding that is available to build affordable rental housing, as opposed to owner-occupied affordable housing. 101 While states and local governments could certainly direct more local government funding to CLT projects, we may well need an expansion of federal funding before we can dramatically increase the supply of CLT controlled housing units.

The second obstacle to CLT expansion may be more ineffable. It is the unstated, maybe unrealistic, but perhaps quite deep-seated belief that each of us may harbor, regardless of our economic status, that whenever we enter the real estate market we will make a substantial profit on our investment and nothing will go wrong. We might overestimate our ability to discover an undervalued gem whose value will surge with the next wave of gentrification. Or perhaps we just too easily assume that if we get on the rising real estate value escalator-no matter how much it costs-we will be able to ride it as far and as high as we want. Even though both kinds of aspirations may be undermined by imperfect information or irrational risk assessment,102 I suspect these expectations of long-term real estate profits are profound and pervasive and may reduce interest in CLTs from the demand side.

Yet if many of us are even partially prone to these behavioral misconceptions, focusing on Alexander's human flourishing theory of property could be a useful antidote. His theory reminds us that, at the end of the day, many of us will not win the real estate lottery. One day, and in some form or another (even if we succeed in acquiring our own home), we may all be vulnerable and dependent on our communities for support. CLTs and the human flourishing theory of property can thus work in tandem to remind us that there is another way for us to relate to the things we own, to the things we need, and to each other.

The remarkable social innovation that the creative founders of the CLT movement imagined and brought forth in the world and the inspiring theoretical innovation of Alexander's human flourishing theory of property both point toward the transformational potential of property law, even if neither one alone can deliver immediate transformative change for our entire property system. To quote James Meehan, we need both "reformist reforms" and "non-reformist reforms" to create a society that actually makes human flourishing possible for all of us.103 We can thank both the CLT movement and Greg Alexander for helping us move a few steps closer to that vision.

--- FOOTNOTES ---

John A. Lovettt

I. ESSENTIAL DESIGN FEATURES OF A COMMUNITY LAND

TRUST...................................................

II. ARGUMENTS FOR CLTS-ADDING HUMAN FLOURISHING

TO THE Mix..............................................

III. SCALING UP THE CLT MODEL AND TRANSFORMATION ....

t De Van D. Daggett, Jr. Distinguished Professor, Loyola University New Orleans College of Law. I thank Annie McKee, Social Researcher in Land Management at the James

Hutton Institute, Aberdeen, Scotland, for inviting me to present an early version of this paper at the Institute's Workshop on Scottish Land Reform in a Global Context, March 6, 2017. I

thank Jill Robbie, Lecturer, University of Glasgow Law School, who also gave me an opportu-

nity to workshop this paper at her law school. Finally, I thank Thomas Mitchell, Lisa Alexan-

der, Rashmi Dyal-Chand, Nestor Davidson, Priya Gupta, Katrina Wyman and Greg Stein for feedback on earlier drafts and helpful comments. All errors are mine.

1 MARIE CIRILLO ET AL., INST. FOR CMTY. ECON., THE COMMUNITY LAND TRUST HAND-

BOOK 35 (1982) [hereinafter COMMUNITY LAND TRUST HANDBOOK]

(emphasis in original).

2 GREGORY S. ALEXANDER, PROPERTY AND HUMAN FLOURISHING, at Xv (2018). 3 Id. at 45-62. Alexander articulates the foundation for his human flourishing theory of

property in three steps. First, he explicates his understanding of Charles Taylor's social the-

sis-the obligation to participate in and support a certain kind of society that makes individual

autonomy possible. Next, he incorporates Amartya Sen's capabilities account of human flour-

ishing. Finally, synthesizing Taylor and Sen, Alexander offers his "thicken[ed]" schema of the

obligations of a property owner-obligations that are both "general," in that they are owed to

society at large, and "specific," in that they are owed to individual members of specific com-

munities. Id.

4 Gregory S. Alexander, The Social-Obligation Norm in American Property Law, 94

CORNELL L. REV. 745, 747 (2009).

5 See, e.g., John A. Lovett, Progressive Property in Action: The Land Reform (Scotland) Act of 2003, 89 NEB. L. REV. 739 (2011) (analyzing the social obligation norm at work in Scotland's right of responsible access); John A. Lovett, Precarious Possession, 77 LA. L. REV.

617, 688-99 (2017) (building on Alexander and Penalver's discussion of the Aristotelean vir-

tue of sharing to solve challenges to the institution of acquisitive prescription in Louisiana

law); John A. Lovett, Towards Sustainable Community Ownership: A Comparative Assessment of Scotland's Compulsory Community Right to Buy, in LAND REFORM IN SCOTLAND: HISTORY, LEGAL AND POLICY PERSPECTIVES (Malcolm Combe et al. eds., forthcoming Fall 2019), https://papers.ssrn.com/sol3/papers.cfm?abstractid=3326967.

6 COMMUNITY LAND TRUST HANDBOOK, supra note 1, at viii.

I. ESSENTIAL DESIGN FEATURES OF A COMMUNITY LAND TRUST

7 Id. 8 Id. 9 Id. at viii-ix. 10 Id.

11 The Community Land Trust Handbook was not the first book on the subject of CLTs. In 1972, the Center for Community Economic Development in Cambridge, Massachusetts published a book that described the theoretical and social origins of the CLT movement, sketched out the essential design features of a non-profit trust and leasehold, and, apparently

for the first time, actually used the term "Community Land Trust." INT'L INDEP. INST., THE

COMMUNITY LAND TRUST: A GUIDE TO A NEW MODEL FOR LAND TENURE IN AMERICA 3-4, 18-22 (2007). Nevertheless, publication of the Community Land Trust Handbook proved to be

even more significant because it showed how the CLT model could be transplanted from its

rural roots to American cities to address the housing needs of socially and economically disad-

vantaged urban dwellers and crystalized the essential features of the CLT model, including

especially the preemptive option and resale restriction. See John Emmeus Davis, Origins and Evolution of the Community Land Trust in the United States, in THE COMMUNITY LAND TRUST READER 3, 21-25 (John Emmeus Davis ed., 2010) [hereinafter Origins and Evolution].

12 COMMUNITY LAND TRUST HANDBOOK, supra note 1, at vii. 13 See id. at 39-47; Origins and Evolution, supra note 11, at 15-17. 14 See COMMUNITY LAND TRUST HANDBOOK, supra note 1, at 48-61; Origins and Evolu-

tion, supra note 11, at 19-20.

15 See COMMUNITY LAND TRUST HANDBOOK, supra note 1, at 62-75; Origins and Evolu-

tion, supra note 11, at 20.

16 The first successful urban-focused CLT was

the Community Land Cooperative, founded in 1980-81 in Cincinnati, Ohio. See COMMUNITY LAND TRUST HANDBOOK, supra

note 1, at 91-103; see also Origins and Evolution, supra note 11, at 21-22. At about the same

time or soon thereafter, CLTs were founded in "Minneapolis, Minnesota (1981); Trenton, New

Jersey and Atlanta, Georgia (1982); Burlington, Vermont (1984); Camden, New Jersey and

Boston, Massachusetts (1985); Norwich, Connecticut (1986); and New York City, New York

(1988)." James Meehan, Reinventing Real Estate: The Community Land Trust as a Social Invention in Affordable Housing, 8 J. APPLIED Soc. SC. 113, 123 (2014).

17 JOHN EMMEUS DAVIS & RICK JACOBUS, LINCOLN INST. LAND POLICY, THE CITY-CLT PARTNERSHIP: MUNICIPAL SUPPORT FOR COMMUNITY LAND TRUSTS 5 (2008); John Emmeus Davis, Organizational and Operational Choices in Starting a Community Land Trust, in THE COMMUNITY LAND TRUST READER, supra note 11, at 259, 259-68 [hereinafter Organizational and Operational Choices]. Elsewhere, Davis enumerates four essential features of a CLT's

ownership structure and three features of its corporate structure. Origins and Evolution, supra note 11, at 4, 9-10.

18 My understanding of the structure of a CLT is based on the following outstanding

articles and book chapters: Benito Arrunada & Amnon Lehavi, Prime Property Institutions for

a Subprime Era: Toward Innovative Models of Homeownership, 8 BERKELEY BUS. L.J. 1

(2011); John Emmeus Davis, Common Ground: Community-Owned Land as a Platform for

Equitable and Sustainable Development, 51 U.S.F. L. REv. 1, 2 (2017) [hereinafter Common

Ground]; Origins and Evolution, supra note 11, at 4, 9-10, 25; Organizational and Opera-

tional Choices, supra note 17, at 259-65; James J. Kelly, Jr., Land Trusts That Conserve

Communities, 59 DEPAUL L. REV. 69, 79-83, 86-89 (2009); Alese Bagdol, Note, Property Taxes and Community Land Trusts: A Middle Ground, 91 TEX. L. REV. 939, 941-43 (2013); Andrew Decker, Community Land Trusts and State Legislation: A Model Act to Enable This Affordable Housing Tool, 26 J. AFFORDABLE Hous. & CMTY. DEV. L. 489, 494-95 (2018); Julie Gilgoff, Note, Local Responses to Today's Housing Crisis: Permanently Affordable Housing Models, 20 CUNY L. REV. 587, 590 (2017); Sarah Ilene Stein, Comment, Wake Up Fannie, I Think I Got Something to Say to You: Financing Community Land Trust Homebuyers Without Stripping Affordability Provisions, 60 EMORY L.J. 209, 214-15, 217-18, 223-235 (2010).

19 Origins and Evolution, supra note 11, at 4, 9-10; Stein, supra note 18, at 217-19.

Two scholars have suggested that the CLT model could be exported to the for-profit sector.

Arrunada & Levahi, supra note 18, at 25-29.

20 Two examples of specific urban neighborhoods served by a CLT include the Roxbury

neighborhood of Boston served by the Dudley Street Neighborhood Initiative (DSNI) and the

Figueroa Corridor of Los Angeles served by the Figueroa Corridor Coalition for Justice. See

generally Kelly, supra note 18, at 75-79; Meehan, supra note 16, at 125-29 (describing DSNI

in detail). Other examples of neighborhood-focused CLTs include the East Harlem/El Barrio

CLT in New York City and the Cooper Square Mutual Housing Association in New York

City, founded in 1991, which recently owned as many as 328 housing units and 24 storefronts.

See Common Ground, supra note 18, at 7; Gilgoff, supra note 18, at 604-05 (describing

planned conversion of former limited equity cooperatives into full-fledged CLTs).

21 A well-known example of a CLT serving an intermediate scale community is the Champlain Housing Trust, which stewards 565 owner-occupied homes in Burlington, Ver-

mont. Jake Blumgart, How Bernie Sanders Made Burlington Affordable, SLATE (Jan. 19, 2016), https://slate.com/business/2016/0lbernie-sanders-made-burlingtons-land-trust-possi-

ble-its-still-an-innovative-and-effective-model-of-affordable-housing-today.html.

22 Some of the best-known examples of these more regional or city-wide CLTs are the Homestead Community Land Trust, which, as of 2016, owned 191 units scattered across the

city of Seattle, Washington and a number of CLTs in the San Francisco Bay area. See id.

(mentioning the Seattle CLT). See generally Gilgoff, supra note 18, at 607-12 (describing the

San Francisco CLT, Oakland CLT, the Bay Area CLT in Berkeley, and the Northern Califor-

nia Land Trust).

23 See, e.g., Stein, supra note 18, at 217-19. 24 ALEXANDER, supra note 2, at 104-21.

25 Id. at 104, 119-20. 26 Origins and Evolution, supra note 11, at 4. 27 Id. In a recent article, Davis provides a detailed, rousing defense of the ground lease structure and explains why it has many practical advantages compared to an affordable hous-

ing deed covenant enforceable by a non-profit or governmental entity that does not own the

underlying land. Common Ground, supra note 18, at 30-46 (emphasizing that a ground lease

(1) guarantees someone will be available to enforce the affordability provisions, (2) provides

an early warning mechanism if the leaseholder is experiencing financial problems that could

cause a loan or mortgage default, (3) gives the CLT leverage to prevent predatory lending by

lenders and to facilitate work-outs, cure defaults and, in extreme cases, arrange for buy-outs if

necessary, and (4) creates "skin-in-the-game" incentives to intervene and solve problems ex-

perienced by leaseholders or problems caused by governmental actors).

28 Common Ground, supra note 18, at 16. 29 See NAT'L CMTY. LAND TR. NETWORK, Chapter 11-A: Model Ground Lease, in THE COMMUNITY LAND TRUST TECHNICAL MANUAL 9 (Kirby White ed., 2011) [hereinafter Model Ground Lease] (outlining model "Use of Leased Land" provisions in §§ 4.1-4.5); NAT'L CMTY. LAND TR. NETWORK, Chapter 11-B: Commentary on the 2011 CLT Network Model Ground Lease, in THE COMMUNITY LAND TRUST TECHNICAL MANUAL, supra note 29, at 5-6 [hereinafter Model Ground Lease Commentary].

30 Decker, supra note 18, at 502 (observing that the CLT Network recommends a renewable ground lease of ninety-nine years and that of the eight state statutes that address ground

lease duration, three require lease terms of at least ninety-nine years, two permit lease terms up

to ninety-nine years, one allows an initial lease term up to ninety-nine years, and one (Califor-

nia) requires a renewable, ninety-nine year ground lease).

31 UGO MATTEI, BASIC PRINCIPLES OF PROPERTY LAW: A COMPARATIVE LEGAL AND EC-

ONOMIC INTRODUCTION 134-37 (2000).

32 Decker, supra note 18, at 494, 498-501. For the concept of "entrance" in property relationships, see generally Eduardo Penalver, Property as Entrance, 91 VA. L. REV. 1889 (2005).

33 Decker, supra note 18, at 498-501.

34 See id.; see also Arrunada & Levahi, supra note 18, at 14-18, 25-29 (arguing that the

features of a CLT could be attractive to the for-profit housing and finance market and making

the case for a complex "For-Profit, Shared Equity (FPSE) scheme" that combines features of

the CLT with tax increment financing).

35 Penalver, supra note 32, at 1894.

36 Id. at 1938-55, 1965-71 (elaborating on the role of "strong entrance" in fostering

normative communities that provide rich, sticky communitarian ties and options for people

wishing to dissent from mainstream culture and contrasting that with the role of "weak en-

trance," which can promote, on one hand, the benign phenomenon of "buying in" to a local

community that fosters involvement in sociability enhancing markets, but which can, on the

other hand, also lead to political homogenization, economic and racial segregation and retreat

from community obligation).

37 See Hanoch Dagan & Michael A. Heller, The Liberal Commons, 110 YALE. L.J. 549,

598-602 (2001).

38 See Model Lease Commentary, supra note 29, at 20-21; NAT'L CMTY. LAND TR. NETWORK, Chapter 9: Enforceability of the CLT's Preemptive Right, in THE COMMUNITY LAND TRUST TECHNICAL MANUAL, supra note 29, at 1.

39 Stein, supra note 18, at 230-31. Typically, intra-family transfers to children or spouses do not trigger the preemptive right. However, other intra-family transferees may have

to be income qualified to acquire the improvement subject to the ground lease. Id. at 230

n.153. Further, a CLT that exercises its preemptive right may assign the purchase option to an

income-qualified buyer. If the preemptive right expires, the leaseholder typically can still only

sell her interest to an income-qualified buyer by satisfying a number of other conditions. Model Ground Lease, supra note 29, at 44-45 (outlining relevant provisions in §§ 10.6-10.7); Model Ground Lease Commentary, supra note 29, at 20-21.

40 Dagan & Heller, supra note 37, at 600-01.

41 See Stein, supra note 18, at 230-31; Decker, supra note 18, at 503-04. 42 Origins and Evolution, supra note 11, at 5-6.

43 Stein, supra note 18, at 231-32. 44 Id. at 232-33. The most detailed explanation of how these resale formulae work can be found in NAT'L CMTY. LAND TR. NETWORK, Chapter 12: Resale Formula Design, in THE COMMUNITY LAND TRUST TECHNICAL MANUAL, supra note 29, at 1-2.

45 See Origins and Evolution, supra note 11, at 9-10. For a particularly detailed account

of the organizational structure of a CLT, see Stein, supra note 18, at 222-27.

46 See Stein, supra note 18, at 226. 4? See Larissa Katz, Exclusion and Exclusivity in Property Law, 58 U. TORONTO L.J.

275, 276-84, (2008) (explaining why ownership does not always require non-owners to keep

out of property but why it does insist that non-owners "fall in line with the agenda the owner

has set").

48 See Gregory S. Alexander, Governance Property, 160 U. PA. L. REv. 1853, 1855-56

(2012).

49 Other scholars have lumped leases, trusts, corporations and common-interest-commu-

nities into a broad category of property forms they call "entity property." THOMAS W. MER-

RILL & HENRY SMITH, PROPERTY: PRINCIPLES AND POLICIES 641-42 (3d ed. 2017). They

explain that these forms share an interest in aggregating a complex set of resources to achieve

benefits of scale on some dimensions while at the same time allowing for separation of man-

agement from use and enjoyment and allowing for management specialization at either the

micro or macro level. Id.; THOMAS W. MERRILL & HENRY SMITH, OXFORD INTRODUCTION TO U.S. LAW: PROPERTY 123-25 (2010).

II. ARGUMENTS FOR CLTS-ADDING HUMAN FLOURISHING

TO THE MIX

50 Alexander, supra note 48, at 1865-66. 51 See Arruflada & Levahi, supra note 18, at 18-22 (arguing that to achieve its full market potential the CLT should be incorporated into the American numerus clausus). See

generally Thomas W. Merrill & Henry E. Smith, Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 YALE L.J. 1 (2000) (explaining and providing an information processing justification for the numerus clausus principle in both common and

civil law systems).

52 The homeowner efficiency strand of this argument contends that by removing the commodity component of a home and accenting the consumption/use component, CLTs lower

the price of a home, which has the benefit of freeing up household income for other more

diverse investments and reducing the loan-to-value ratio of a purchase money loan, thus mini-

mizing risk. The community efficiency strand of this economic argument emphasizes that a

CLT's shared equity approach guarantees that the initial governmental or charitable subsidy

stays in place because the first beneficiary cannot pocket the subsidy on a subsequent sale, thus

allowing the CLT to retain the subsidy and lower the cost of housing for all future leasehold-

ers. Relatedly, some advocates also point out that the ground lease payments can help cover

the CLT's operating costs or can be used to create a revolving loan fund for future community

development. See Arrunada & Levahi, supra note 18, at 11-12, 14-17 (stressing asset diversi-

fication and risk reduction); Common Ground, supra note 18, at 14, 16-17, 28-31(emphasizing risk reduction, forced savings mechanism for leaseholder/homeowners, and retention of public and private subsidies); Stein, supra note 18, at 233-35 (emphasizing subsidy retention

and importance of reducing price of house rather than raising the homebuyer's income level).

53 See Common Ground, supra note 18, at 12; Origins and Evolution, supra note 11, at 5-6 (reviewing George's career and the influence of Mill on George); COMMUNITY LAND

TRUST HANDBOOK, supra note 1, at 6-7, 20-21, 23-24 (contrasting the leaseholder's legiti-

mate interest in "earned equity" with the community's legitimate interest in "community equity" -"the original, inherent value of the land and any value that is added to it by the efforts of the community or larger economic forces").

54 See Common Ground, supra note 18, at 17-20; Kelly, supra note 18, at 88-89. 55 Common Ground, supra note 18, at 22-28. 56 See id. at 14-15, 37-38 (citing Emily Thaden, Stable Homeownership in a Turbulent

Economy: Delinquencies and Foreclosures Remain Low in Community Land Trusts, LINCOLN

INST. OF LAND POL'Y (2011 . Davis and others contend that the CLT structure reduces the incidence of default and foreclosure among leaseholder/borrowers for a number of reasons, including: (1) more homeowner education before acquisition of a home; (2) the CLT can

screen out predatory lending because it has to approve a mortgage before a sale; (3) the ground

lease fee obligations and default notice requirements under a CLT-approved mortgage enable a

CLT to detect homeowner financial distress early and then work with the lessee/homeowner to

cure defaults, or, if necessary, find a new income-qualified buyer, acquire the home itself, or at

least earn a profit if the home is sold to a non-income qualified buyer; and (4) the simple fact

that a CLT has more skin-in-the-game to incentivize intervention in default situations. See id.

at 37-41. Ground leasing in the CLT context, Davis notes, is "what behavioral economists

would call a commitment device." Id. at 41 (emphasis in original). See also Arrunada &

Levahi, supra note 18, at 12-13, 15-16 (making similar arguments); Stein, supra note 18, at

236-37 (noting that the standard ground lease allows CLTs to insist on higher quality lenders

and screen out predatory lending practices).

These arguments are intriguing but deserve more scrutiny as the reported divergence in

default and foreclosure rates between CLT and non-CLT borrowers might be attributable to

other factors, including: (1) the possibility that CLT mortgages were sold on the secondary

market at a lower ratio than non-CLT mortgages; (2) the possibility that CLT homeowners just

borrowed less money than other comparable homeowners; or (3) the possibility that CLT

homeowners simply resided in cities or geographic areas where housing prices declined less and the effects of the Great Recession were milder (e.g., Burlington, VT, Seattle, WA, Boston, MA) than in areas where non-CLT subprime homeowner debtors happened to be concentrated

(Nevada, Inland Empire of California, Florida).

A recently released working paper, however, provides significant support for this argument, although it focuses on a broader sample of "shared equity" homeownership programs, including deed covenant programs and limited equity cooperatives, and focuses on net wealth

accumulation across all market periods. See Ruoniu Wang et al., Tracking Growth and Evalu-

ating Performance of Shared Equity Homeownership Programs During Housing Market Fluctuations 39-45 (Lincoln Inst. of Land Pol'y, Working Paper WP19RW1, 2019), https:// www.lincolninst.edu/publications/working-papers/tracking-growth-evaluating-performance-

shared-equity-homeownership (reporting that shared equity housing forms allowed participants

to continue to build significant wealth, in the amount of approximately $14,000, even after the

risk associated with homeownership was taken into account, across four distinct housing market phases from 1985 to 2018).

57 Kelly, supra note 18, at 70-71. 58 Id. at 71-74, 89-108. 59 See ALEXANDER, supra note 2, at 55-57. 60 Id.

61 Id. at 55-57, 67. 62 Id. at 55-58, 67. 63 Interestingly, Alexander devotes relatively little of Property and Human Flourishing

to the problem of when a land use regulation is a regulatory taking. See id. at 244-46 (discuss-

ing Penn Cent. Transp. Co. v. City of N.Y., 483 U.S. 104 (1978) and a case from the German

Federal Constitutional Court for what they teach about reasonable expectations and the right to

destroy a historically significant building). However, Alexander explored this topic in great

depth, using a comparative law approach in an earlier book. See generally GREGORY S. ALEX-

ANDER, THE GLOBAL DEBATE OVER CONSTITUTIONAL PROPERTY: LESSONS FOR AMERICAN TAKINGS JURISPRUDENCE (2006).

64 See ALEXANDER, supra note 2, at 57-58. 65 See HANOCH DAGAN, PROPERTY: VALUES AND INSTITUTIONS 66-69 (2011) (critiquing Alexander and Penalver's neo-Aristotelean vision on the basis that it underestimates the essen-

tial role that voluntary choice plays in creating normatively attractive communities). For Da-

gan, long-term reciprocity is the yin that pulls the yang of voluntary choice and encourages

people to enter liberal communities, at least at the micro level. See Hanoch Dagan, The Social Responsibility of Ownership, 92 CORNELL L. REV. 1255, 1266-67 (2007).

66 ALEXANDER, supra note 2, at 60-62. Perhaps there is not quite as much difference between Alexander and Dagan on this point as Alexander initially claims, particularly if we

consider Alexander's argument in Chapter 4 of Property and Human Flourishing where he

contends that inter-generational community depends upon certain kinds of reciprocity. See id.

at 103-28. See also supra note 27 and accompanying text.

67 See ALEXANDER, supra note 2, at 61-62. In the chapters in the second half of Property and Human Flourishing, Alexander makes the case for a number of these specific obligations.

In my article, Progressive Property in Action, supra note 5, I made the case that Part I of the

Land Reform (Scotland) Act 2003 is one of the boldest examples in the developed world of a

legal system imposing a specific obligation on almost all owners of land to recognize the needs

of non-owners-in that case, non-owners' need for recreational access to land and in-land

water.

68 See Arrunada & Levahi, supra note 18, at 14-18, 25-29.

69 See Wang et al., supra note 56, at 25-34 (reporting that across all geographies and

housing market periods, shared-equity homeownership programs tend to serve families that are first-time homebuyers, with children, are low income (51%-80% AMI), headed by females, and include individuals who work in office, retail or service industries).

70 Usually, the current leaseholder who seeks to sell her interest benefitted from the initial income qualification limitation. Without it, that leaseholder might not have been able to

become a property owner in the first place, assuming the leaseholder acquired her interest in a

strong real estate market with rapidly appreciating real estate values. Of course, if the lease-

holder acquired her interest in highly depressed real estate market, this might be less true.

The working paper authored by Wang and his co-authors confirms that CLTs and other

shared equity programs have been able to achieve affordability and reduce housing cost bur-

dens to acceptable levels for low-income households (defined as having incomes below 80%

of AMI) not only for first-time purchasers but also upon the resale of the homes subject to

resale restrictions. Id. at 35-39 (providing detailed data on affordability and cost burdens for

first purchases and subsequent resales of shared equity homes as compared to market rate

homes across multiple market periods and reporting median subsidy depth of 31% for both

first purchases and resales).

71 See ALEXANDER, supra note 2, at 103-33; see also supra note 27 and accompanying

text.

72 ALEXANDER, supra note 2, at 68-73. 73 Id. at 71-72. 74 Id. at 72-73. 75 See Common Ground, supra note 18, at 31-45 (arguing that the ground lease itself

builds a resilient, sustainable and deeply inter-connected relationship between the landowner

and leaseholder-homeowner). 76 See id. at 38-39.

77 See id. at 19-22; Kelly, supra note 18, at 75-79 (detailing the community organizing

and advocacy work of DSNI in the Roxbury neighborhood of Boston, Massachusetts and the

Figuero Corridor Coalition for Justice in Los Angeles).

78 See generally ALEXANDER, supra note 2, at 75-100.

79 See id. at 81. 80 See id. at 81-82.

81 For a discussion of how stickier kinds of property relationships, particularly those

involving mortgagees and mortgagors and residents of a single city, can respond to sudden and

potentially transformative events such as natural disasters, see John A. Lovett, Property and Radically Changed Circumstances, 74 TENN. L. REV. 463, 476-95, 515-32, 566 (2007).

82 ALEXANDER, supra note 2, at 82-98. 83 Id. at 76. 84 Id. (quoting PHILIP SELZNICK, THE MORAL COMMONWEALTH, SOCIAL THEORY AND

THE PROMISE OF COMMUNITY 358 (1992 .

85 Id.

86 As Alexander evocatively notes: "The distances between not only them and us but

also between each other increase with each new ring, rather like the circles that form in a pool

of water into which a stone has been tossed." Id. at 83.

SCALING UP THE CLT MODEL AND TRANSFORMATION

87 See id. at 77-80. Alexander draws especially on Jeremy Waldron, Community and

Property-For Those Who Have Neither, 10 THEORETICAL INQUIRIES L. 161, 188-92 (2009). 88 ALEXANDER, supra note 2, at 78 (quoting ROBERTO MANGABEIRA UNGER, KNOWL-

EDGE AND POLITICs 266 (1975 .

89 See id. at 100. 90 Kelly, supra note 18, at 70. 91 Common Ground, supra note 18, at 8 n.13. The source Davis relied on, the "Program

Directory" of the National CLT Network, is no longer available. See id.

92 Blumgart, supra note 21.

93 Emily Thaden, The State of Shared-Equity Homeownership, SHELTERFORCE (May 7, 2018), https://shelterforce.org/2018/05/07/shared-equity/. Thaden also estimates that as of

2018 there were approximately 166,000 homeownership units in shared equity cooperatives and approximately 13,400 homes in limited equity resident-owned communities, which consist

of manufactured housing communities where plots of land, known as "pads," are owned coop-

eratively. Id. See also Wang et al., supra note 56, at 3 (reporting same and reporting existence

of 50,000 "affordable owner-occupied units" subject to deed restrictions).

94 See generally Bagdol, supra note 18 (detailing the challenge of balancing CLT home affordability and the need to collect taxes to support schools and social services); Decker, supra note 18, at 506-15 (describing legislative approaches to CLT property taxation).

95 See generally Stein, supra note 18, at 235-48 (describing the financial concerns of

lenders and mortgagees regarding CLTs).

96 See generally Decker, supra note 18, at 490-506, 515-16 (explaining the state of

legislation regarding CLTs and the need for a uniform model act).

97 First, concerns about complexity and transaction costs are probably overstated because

there is now an abundance of technical assistance available to organizations or government

actors seeking to establish a CLT. See Origins and Evolution, supra note 11, at 29-30; DAVIS

& JACOBUS, supra note 17, at 10, 12. Second, concerns about lender resistance are probably

overblown as well because in 2006 Fannie Mae promulgated a Uniform Rider that certifies

approved CLT mortgages, thus allowing for the sale of CLT mortgages into the secondary

market. Compare Origins and Evolution, supra note 11, at 34-35 (extolling the benefits of the

Uniform Rider and greater lender receptivity), with Stein, supra note 18, at 241-43 (criticizing

certain aspects of the Uniform Rider). Finally, concerns about complexity and transaction cost

have also been mitigated by the promulgation and near universal use of the National Community Land Trust Model Lease. See generally Model Ground Lease, supra note 29. To be sure, property tax burdens and feared tax inequity could still be a factor impeding the spread of

CLTs in some municipalities, but even here several states have come up with judicious solu-

tions to this problem and plenty of technical advice based on actual experience is available. See DAVIS & JACOBUS, supra note 17, at 23-27 (offering detailed suggestion for equitable

taxing policies to smooth the relationship between local tax assessors and CLTs); Bagdol, supra note 18, at 939-40; Decker, supra note 18, at 506-15.

98 See DAVIS & JACOBUS, supra note 17, at 10-14 (describing municipal involvement in

start-up phase); id. at 15-18 (describing municipal support at development stage through dona-

tions of land and buildings, loans and grants and inclusionary housing mandates); id. at 19-20

(describing municipal funding sources for sustaining CLTs); id. at 33-38 (describing trends in

municipal involvement).

99 See Thaden, supra note 93.

100 See id. 101 See id. 102 For a classic study of the risks created by imperfect information and imperfect rationality for consumers of credit cards, mortgages and payday loans, see generally Oren Bar-Gill & Elizabeth Warren, Making Credit Safer, 157 U. PA. L. REV. 1 (2008).

103 See Meehan, supra note 16, at 131. As Meehan suggests, "reformist reforms" tend to reinforce the hold of dominant systems, such as the system of private finance, possessive

individualism and the right to exclude. Id. "Non-reformist reforms" seek to transform institu-

tions, challenge arrangements of the market, and in the context of housing, re-conceptualize housing so that it is no longer a commodity but rather a public good. Id. See also Common

Ground, supra note 18, at 46-50 (invoking Meehan and Meehan's inspiration, ANDRE GoRZ, STRATEGY FOR LABOR: A RADICAL PROPOSAL 7 (Beacon Press, 1964 .