Project Description

Project context

Located on the shore of Lake Champlain, the city of Burlington had seen its waterfront and nearby neighbourhoods fall into decay with the changing economy. Previous urban renewal programmes in the city had swept away close-knit communities and in 1984 the incoming city government was mandated to deliver urban renewal that would preserve communities and improve the housing stock without displacement. These were bold objectives in an era when the federal government was slashing housing and community development programmes and had sharply curtailed all spending on anti-poverty programmes.

A highly attractive region of small farms and towns to the north of New York City, the state of Vermont is highly popular for second homes and recreational use. It has the nation’s tightest rental housing market and the third lowest vacancy rate in homes for sale. This translates into a significant housing-wage gap for average income Vermonters. In 2006, 67 per cent of Vermonters did not earn the income needed to purchase the average priced home and 59 per cent of households did not earn enough to afford the average priced rental. These prices are even higher in the three counties that CHT operates in, with the average rental of US$983 being US$200 more than the state average. The median cost of a home is US$240,000, needing a salary of nearly US$80,000 and savings of US$16,000 to be affordable.

Key features

Community land trusts are locally based not-for-profit organisations that own land and property in trust for the benefit of the community. Not only do they guarantee long-term affordability and preservation of housing subsidy, they also provide a model for responsible lending to those on low incomes and a successful means of community engagement and decision taking. Originally established as the Burlington Community Land Trust in 1984, the organisation merged with another rental housing provider in the locality to form Champlain Housing Trust in 2006.

To date, CHT has 430 homes in its single-family and condominium owner-occupied portfolio, as well as 1,500 rental properties, 115 cooperative homes and 64,000ft2 of commercial, retail and office space. A further 120 apartments are under development. CHT acquires land and properties and sells or rents the property or other community facilities to an individual or corporate entity whilst retaining ownership of the underlying land. Through a perpetual ground lease CHT gives owner occupiers full rights to the land for the duration of their occupancy (and that of their heirs), but requires that equity is shared on resale, thus ensuring permanent affordability. Under the resale formula, only 25 per cent of any appreciation in the property value goes to the occupier.

An example of how the resale formula operates: assuming a property is purchased for $200k of which $160k is mortgage and $40k is CHT grant. After some years the owner decides to sell and the property is valued at $260k. The seller gets $15k (25 per cent of the $60k appreciation) plus the value of any mortgage repayments made e.g. $10k, thus giving them a deposit of $25k towards the purchase of another property. CHT buys the home for $175k and takes its 6 per cent stewardship fee of $15.6k and the remaining $29.4k surplus value is added to the value of the original grant, giving a total of $69.4k. CHT sells the home to a new owner for $260,000 with a $190.6k mortgage and a $69.4k grant. An initial grant is always needed to ensure affordability, but as can be seen in the example above, is recycled on resale. Permanent affordability also serves the public interest by recycling any public investment that creates the initial affordability and allows CHT to serve generations of homeowners without additional government subsidy, as in this example where grant levels on a property increased from US$40k to US$70k.

CHT aims to be much more than just a resale mechanism. It is an inclusive and democratically governed entity with a constitution that brings diverse elements of the community together to protect its mission over time. It is governed by a board of 15 trustees, of whom one third represent the interests of people who live in the counties served but who do not live on trust land; one third is made up of public representatives from local governments or agencies serving them and one third of the members are elected by home owners, renters and coop members living in properties on CHT land.

CHT’s approach has had a significant impact on the regeneration of run down areas of the city, with the greatest physical impact being seen in Burlington’s Old North End where it now owns nearly 500 apartments and 70 single homes and condominiums in an eight square block area of the city that was previously run down and dilapidated. As well as refurbishing the properties, CHT develops sites unsuitable for residential purposes into community services such as pocket parks. It supports other non-profits to create community facilities in neighbourhoods where poverty levels are highest, for example the Good News Garage (which repairs donated cars for the benefit of low-income families), the multi-generational centre and Food Shelf (which receives food donations from the community and provides emergency groceries to families and prepares hot meals for homeless people). It can afford to carry out such work because it can develop and access a range of capital resources, as it is a credit-worthy, proven developer of difficult projects and it has a commitment to retaining buildings for community use.

CHT also seeks to establish affordable properties in areas prone to gentrification in order to retain a social mix, for example, its 40 apartment building on the regenerated lake waterfront, which is the only rental housing in the area, as well as being the state’s first residential green building.

Covering costs

CHT was given an original start-up grant of US$200,000 by the city authorities in 1984. However, its current funding strategy and sources are no different from any other social housing provider in the USA. CHT uses every federal, state and local government grant source and below-market financing available, as well as private investment, donations and foundation grants. Its model of ‘mutual self-help’ sends a powerful message to funding agencies, especially in the current political climate which denigrates so-called ‘give-away’ programmes and enables it to attract funds. The current sources of income are 23 per cent from federal and state grants, 24 per cent from rents, 16 per cent from gains on resales and 36 per cent in interest, fees for commercial lets and other.

Recent problems in the sub-prime housing market have not had any negative impact on CHT, but on the contrary have served to highlight the value of its approach of responsible lending to those on low incomes. Previous experience in 1991 of falling real estate values led to a loss of stewardship fee income and a Stewardship Fund was established so that in times of rapidly increasing values money can be set aside to make up for any shortfalls in times of falling prices. Current experience in the housing credit crisis (December 2007) shows that in the 4th quarter of 2007, the annual rate for foreclosures on all US mortgages was two per cent, with some areas running as high as 3.4 per cent. By contrast, a survey of 80 Community Land Trusts revealed only two foreclosures out of 3,100 units in 2007, an annual foreclosure rate of 0.06 per cent. CLT homeowners are thus 30 times less likely to go into foreclosure when compared with the national rate.

It is estimated that the trust can reduce the cost of home ownership by 25 per cent, due to the initial subsidy, lower property price and legal costs associated with purchase and it eliminates the need for private mortgage insurance. Existing tenant members are encouraged to take advantage of the housing tenure ladder within CHT.


  • The project has ensured that access is provided to affordable housing to rent and buy for those who have no access to market housing, with the average home now being affordable to a family at 57 per cent of median income.
  • Residential mobility is increased, with 74 per cent of those moving going into market home ownership and five per cent trading up to another CHT property.
  • State and city housing policy have been amended and permanent affordability is now state housing policy in Vermont. Together with other housing advocates, CHT has successfully lobbied to pass condominium conversion and other protections for renters, first in the city and later state-wide.
  • Sustainable funding mechanisms have been established locally through the Burlington Housing Trust Fund, which levies one per cent of the local property tax, and statewide through the Vermont Housing and Conservation Board, plus other fees to support social housing.
  • The CLT model as developed by CHT has been designated nationally as being eligible for federal housing funding from the Department of Housing and Urban Development.

Why is it innovative?

  • CHT was one of the first organisations in the US to develop the community land trust approach of ensuring affordable housing in perpetuity, which is now being widely used in the USA and internationally.
  • A membership structure which ensures that all members of the trust own and govern the disposition of land, which creates a much stronger commitment to the organisation and its mission.
  • Provision of services and on-going support to homeowners to provide support with budgeting, maintenance etc.

What is the environmental impact?

CHT homes have always been modest in size compared to market trends in the United States, very energy efficient and located in dense developments in the heart of existing communities. The urban location ensures that the houses are making good use of land and reduces the need for car usage.

The first green certified residential building in the state of Vermont is CHT’s 40-apartment block on the waterfront. CHT is currently looking at the portfolio of 1,600 rental properties to assess how they can be made more energy efficient and use materials produced in an environmentally sustainable way.

In addition to its new construction programme, CHT works in cooperation with the conservation community of Vermont, carrying out adaptive re-use of local historic buildings and using them to create affordable housing.

Is it financially sustainable?

A range of income sources have been developed to ensure the on-going organisational sustainability of CHT. These include community organising, advocacy, fund-raising by CHT members, volunteering, technical assistance and donations from local businesses. An endowment is being established to provide sustainable funding in the future, which currently stands at US$2m. A percentage (six per cent) of the value of each resale goes to CHT to help meet their administration costs. The deep subsidy that CHT can attract can leverage in new private investment.

The community land trust model provides affordable home ownership opportunities for its members who are not able to use conventional house financing methods, enabling them to own their own homes. In certain circumstances CHT homeownership programmes have been able to help households earning as little as US$12,000 – US$20,000 per year to purchase a home (2006) and CHT’s rental apartments serve people earning as little as 30 per cent of the area’s median income.

It is estimated that the trust can reduce the cost of home ownership by 25 per cent, due to the initial subsidy, lower property price and legal costs associated with purchase and it eliminates the need for private mortgage insurance. Existing tenant members are encouraged to take advantage of the housing tenure ladder within CHT.

Permanent affordability also serves the public interest by recycling any public investment that creates the initial affordability and allows the CHT to serve generations of homeowners without additional government subsidy.

CHT has established two Homebuyer Centres that are available to people of all income groups who need assistance when deciding whether / how to buy a home. At the heart of this service is the Homebuyer Workshop, an eight-hour course that trains people for all stages of the process from identifying their price range, evaluating the quality of the property, working with estate agents and other professionals and one-on-one credit counselling. Approximately 400 households a year complete the course, and 130 of these go on to buy a home.

What is the social impact?

CHT offers citizen empowerment opportunities to all its members. Residents and non-residents alike are actively engaged in the organisation through a variety of advocacy and community building activities. Organisational events from picnics to volunteer planting or clean-up days and open houses at new developments bring members together and engage them in the work of CHT. Board vacancies are filled each year by election at the annual meeting where members also receive the financial and corporate reports. Newsletters, websites and special mailings keep them informed and in touch with each other.

Residents’ associations are supported in the various projects to help them to identify community needs and make decisions. The 115 residents living in cooperative houses all have their own boards of directors.

Cooperation is encouraged between neighbourhood groups, as well as property owners, city authorities and neighbourhood planning assemblies. CHT integrates a range of incomes within buildings e.g. the waterfront project is mixed rental with the majority of tenants earning less than 60 per cent of the median income, but with 12 per cent on higher incomes who can pay the full market rental rate. The City Edge condominium has 60 apartments for sale, 31 of which are price restricted.

Members are mobilised to fight NIMBYism when neighbours oppose a proposed new development. CHT residents and leaders attend neighbourhood meetings to explain the work of the Trust. Although it is easy to stop development in Vermont, the CHT has never lost a project to NIMBYs, even in the wealthiest suburbs.


  • The community land trust approach turned American property law on its head, as the freedom to earn unlimited wealth in real estate is socially sacrosanct and legally protected in the US and the contract entered into with CHT by purchasers in effect restrained the free trade of land in the market. This was overcome by using a ‘belt and braces’ approach making sure that the legal structures were watertight. Leases are provided which last 21 years and are perpetually renewable by the lessee. All buyers are required to engage an independent lawyer to ensure they fully understand the legal arrangement they are entering into and have this confirmed in writing.
  • Having the CLT model accepted in the mainstream has been a challenge, but the benefits are now well-recognised.
  • The continued reduction in public funding has been overcome by working together with other non-profit housing organisations and mobilising a wide range of funding sources.

Lessons Learned

  • It is necessary to be flexible and adaptable in order to survive and grow. This flexibility and responsiveness is built into the CLT model, for example, by recalculation of the limited appreciation formula to provide for capital return that is fair to the homeowners.
  • Admit to mistakes and correct them.
  • The CLT model will work in hot markets, if there is a capital source to make the initial acquisition.


There is on-going monitoring of activity to ensure affordability is being maintained. In 2002 a study was conducted after 20 years of operation. It studied the 97 resales that had taken place in that time and measured a series of key indicators (see below for results). A further study has been carried out in 2007 to bring this study up to date and will be published in the upcoming year, since there are now over 200 resales (29 in 2007).


CHT has always seen itself as part of a larger land reform movement and has remained committed to contributing to building that movement by sharing experience as far as possible. The permanent affordability aspect of the model has attracted the support of local, county and state governments nationwide, especially in recent years as they struggle to preserve homeownership opportunities in their jurisdictions with shrinking public resources and in many cases, rapidly appreciating real estate values.

The project has had a major impact locally where permanent affordability is now state housing policy and some non-CLT agencies now use the CLT resale restrictions on their homes for sale.

In 2005, CLTs around the US came together to form the national CLT network, in which CHT has taken a leading role. This network has strong financial support from the Lincoln Institute for Land Policy and federal sources and is rapidly developing as a clearinghouse of best practices. The Community Land Trust Academy has been established to provide training opportunities for the affordable housing sector.

Over 200 other CLTs have been developed in the US using the example of Burlington. Half of these have been developed in the last seven years in response to the surge in house prices and they are flourishing particularly strongly in the more costly real estate markets (California, Florida).The city of Washington is currently establishing a city-wide CLT, with 1,000 homes planned in the first stage and Nebraska is looking at a state-wide initiative. CHT has assisted a group of native Hawaiians to protect access to land that has rapidly gentrified for tourism and the second home market. They have recently passed a state-wide housing and conservation trust on the Vermont model.

Internationally, there have been visits from groups in the UK and Canada where the approach is now being piloted with the support of the national housing agencies. The Housing Corporation in the UK now permits social housing grant to be made available for CLT housing projects. Training is being given to USAID workers in the approach, which is seen to be a great opportunity in emerging democracies, providing a middle ground between state-owned and state-run models of the past and the practice of privatising everything immediately.