CLT coalition was key to achieving equitable taxation in California.
Equitable taxation on homes subsidized by community land trusts has long been an issue across the U.S., especially in states like California, where exceptionally hot housing markets lead to skyrocketing property taxes and increased financial pressure on low-income homebuyers.
“This is something that you will probably hear from CLTs across the country: CLT homes haven’t been taxed the way they should be,” said Francis McIlveen, director of operations and development of the Northern California Land Trust, located in Berkeley and a member of Grounded Solutions Network.
In many cases, homeowners of a CLT-subsidized house are taxed at market rate, despite CLT ground-lease resale restrictions that won’t allow the homeowners to ever tap into the full market value of that home. The result is expensive property taxes that add hundreds to monthly housing costs, and in some instances, force homeowners to sell back their home to the CLT simply because they can no longer afford it.
“This has been a huge issue affecting Community Land Trusts in California and the low-income homeowners
we serve across our state,” McIlveen said.
Early last year, a group of California CLTs decided to do something about it. The group was assembled by the Irvine CLT in Orange County, which in 2015 had approached the California legislature about an amendment to the state’s taxation policy, but they gained little ground. Knowing there would be strength in numbers, the Irvine CLT reached out to its counterparts across California. The response was swift, and 15 CLTs from all regions of the state joined forces to form the California Community Land Trust Network in order to tackle the equitable taxation problem together.
In January 2016, the group drafted a legislative platform, and with the help of a professional lobbyist, aggressively advocated for change to the state’s revenue and taxation code. In September, the bill passed through the legislature and was signed into law. Effective January 2017, the new law requires county assessors to consider the impact of the CLT 99-year ground lease on the value of the home when assessing property taxes.
“This particular achievement grew out of a very real problem impacting the affordability of homes throughout our state,” McIlveen said. “It’s amazing that we all came together on this on an ad hoc basis, and within nine months from drafting the platform, we had a law.
“This was very much a group effort of the state’s Community Land Trusts,” he continued. “Everyone supported it and took part in any way that they could. It’s a real testament to the power of grass roots efforts.”
This wasn’t the first time the group of California CLTs came together on common ground. For the past several years, the 15 CLTs have met face-to-face annually to exchange ideas, discuss policy and address shared challenges. In fact, the idea for the collaborative equitable taxation advocacy effort first began to take shape at the group’s statewide gathering in 2015. Financial support from Grounded Solutions Network helped make the annual meeting happen.
“Grounded Solutions Network has awarded us a small grant each year to cover some of the hard costs of our statewide meetings,” McIlveen said. “That extra money has been a great help in our ability to get together as a statewide group each year.”
The annual meeting sponsorships were part of Grounded Solutions Network’s Technical Solutions Fund program. Through this fund, Grounded Solutions members can apply for technical assistance services, training delivery, peer exchange stipends and grants.