Equity Trust was founded more than thirty years ago in part to create a vehicle for people “to apply the principles underlying the Community Land Trust (CLT) model to their own property interests,”* and our very first initiative, the Equity Pledge, is re-emerging as an important component of that mission.
CLT homeowners are committed to forgoing part of the appreciated value of their property when it is sold, reducing its price and preserving its affordability for future buyers. Inspired by the land gift program launched in India by Gandhi disciple Vinoba Bhave, the Equity Pledge is a program that encourages owners of non-CLT property to contribute a portion of the value of that property to work that supports people and communities with fewer resources. The contribution can be made to the Equity Trust Fund, originally established to provide financing for new CLTs across the country, or to a land reform nonprofit in the property owner’s local area. The idea remains a powerful tool for growing CLTs and has new relevance for communities seeking to offer reparations to people of African descent and other marginalized people.
Since its beginnings as a neighborhood stabilization effort almost a decade ago, we have supported the Amherst Community Land Trust (ACLT) as it has become established and carried out its first projects. (It is located in the Massachusetts town where Equity Trust is based, and both Jim and Rob are members.) In 2021, ACLT received a bequest of the residence of its late president, which will soon be sold to a family that couldn’t otherwise afford to buy a home in the town. The proceeds may make it possible to bring an additional home into the CLT, making it a particularly impactful example of the Equity Pledge.
News of the gift has already inspired another member of the community, not previously involved with ACLT, to conclude a bargain sale to a new homeowner with the difference from market value being donated to the CLT. Several other members are at various stages of conveying some or all of their property to the CLT, and it is hoped that additional follow-on gifts are in the wings. Now Amherst Community Land Trust is looking to the Town’s African Heritage Reparation Assembly for guidance on leveraging its burgeoning property donation outreach to make homes available to African American residents at well below market value.
In an example of how even a nonprofit organization can make a version of the Equity Pledge, the Assisi Community, an intentional community in Washington D.C. whose members are dedicated to peace and nonviolence, ecological integrity, and the welfare of immigrants and refugees, has committed to permanently preserving its property for affordable housing in an agreement with D.C.’s Douglass Community Land Trust (DCLT). When Assisi Community concludes its operations, both houses that members live in will be transferred to DCLT. Assisi Community received a loan from the Equity Trust Fund in 2021 to finance needed renovations and energy efficiency upgrades to maintain a decent living space for current members and to preserve the value of the property for its future owners.
Equity Trust was built on a conviction that conventional ownership models are at the root of social and economic injustice, and today we are acutely aware of the central role of land control, ownership, and white supremacy in creating the inequities of the 21st century. We recognize that real estate grows in value due only partly to the actions and investment of the private owner, with additional increase in value – what could be called “social appreciation” – due to community investments such as schools, roads, and public transportation. Meanwhile, exclusive access to land in high value locations, or to lower interest loans, has allowed white people both to initially acquire assets with a much higher base value and then to experience a disproportionate increase in the those assets’ value – what might be called “privilege appreciation”.
Yet when a property’s price increases, the windfall flows entirely to the private owner and actually contributes to housing shortages and higher cost of living for those who don’t own property, particularly people of color. Housing has become a vehicle for profit-taking, rather than a basic human right. But when homes are held in trust by a CLT and made available to historically excluded communities, the chance to own a home represents an injection of wealth even when the home’s resale price is restricted.
The Equity Pledge is an opportunity for property owners who recognize these dynamics to support programs that promote affordable housing and equitable access to land, and to participate in reparations on a personal level, drawing on both senses of the word “equity”: a financial interest in a property, and a moral principle of fairness.
Since the beginning of the pandemic, we have experienced an uptick in inquiries to Equity Trust that seek information about the Equity Pledge. Please contact us if you would like to discuss an Equity Pledge to Equity Trust, or if you would like assistance in planning an Equity Pledge or a gift of equity to an organization in your community.
* Community Economics #21 (Fall 1990), p.14