Rent Sharing Land Trusts
In a rent-sharing land trust, home and/or farm owners have title to their buildings/improvements but pay the full current annual ground (i.e., land) rent to a trust for the underlying land. The trust – which could be either a public or non-profit entity — uses the collected land rent to pay any property taxes imposed on the homes/farms, with excess rental revenue used for common purposes approved by the trust.
Among the first rent-sharing land trusts were land rent communities such as Arden, Delaware and Fairhope, Alabama that were founded in the early 20th century and that still operate today. In these communities, homeowners have title to their house structure but they lease the underlying land from the community, which uses the rent to pay for public services and for the county and school district property taxes on the homes. Uniquely, the trust land in Fairhope is held by a non-profit corporation, which owns most but not all of the land in the City of Fairhope. There are three land trust communities, with legal status as villages, comprising Arden in Delaware.
Similar present-day efforts include scattered site approaches in the context of both housing and farming. Under a Municipal Land Trust proposal, home buyers would achieve savings and lower their foreclosure risk by financing only the building portion of their home while paying full land rent (adjusted periodically to reflect current rental values) to a city-run trust in lieu of property taxes. In a Rent-sharing Farm Trust proposal, farmers would have title to their buildings/improvements but lease the underlying land from a non-profit trust, which would pay an equal land rent credit to the farmers from excess funds.