Amy Pratt | Program Manager, Diamond State Community Land Trust
The mission of Diamond State Community Land Trust (DSCLT) is to strengthen Delaware communities by creating and stewarding forever affordable housing while promoting the sustainable use of the land. Established in 2006, DSCLT ensures that both public and private investments in their homes can be permanently preserved, providing enduring affordability for low to moderate income families across the state. The fundamental concept that drives the program is that of shared equity housing – a model that has steadily gained popularity over the years.
Shared equity housing, as facilitated by organizations such as DSCLT, is accomplished by separating ownership of the home from the land. The trust retains ownership of the land while leasing it to homeowners through a 99-year, renewable, inheritable, lease agreement. This arrangement guarantees that homeowners can enjoy the benefits of homeownership without undue interference from the land trust. If a homeowner decides to sell their home, they agree to share a portion of the equity gained with the next buyer, ensuring the home remains affordable for future generations. This cycle of shared equity not only promotes permanent affordability, but also plays a vital role in preserving homeownership within communities where rising home sale prices often outpace income growth. It’s a powerful way to combat the affordability crisis in high-demand areas to create more inclusive, resilient neighborhoods.
In many affordable housing programs, a recapture method is employed in the event homes are sold within a certain period after the initial purchase. These recaptures do generate funds for the organization, but because home prices naturally increase over time, the recaptured amounts often don’t retain the same value as the initial investment. Shared equity housing ensures that the value of each dollar is not only preserved but appreciates overtime. This sustainable approach significantly reduces the ongoing need for organization to continually reinvest in preserving affordable housing, making it a more self-sustaining model. The diversity of income levels among DSCLT’s homeowners, ranging from very low to those up to 120% of area median income, ensures that a wide range of households, including the “missing middle,” are afforded equal homeownership opportunities.
DSCLT’s addresses hesitancy around land ownership and shared equity at resale by emphasizing the following important points to reframe the perception of both:
Land ownership is not a requirement to enjoy the land the home sits on. All homeowners are guaranteed the right to use their land as if they owned it if they follow the regulations and requirements of their municipality and community.
The perception that shared equity comes only at the end of homeownership does not acknowledge the daily benefits of a reduced mortgage, increased disposable income, and the change in quality of life as a result.
Shared equity homeownership is often used as a steppingstone to traditional homeownership. 50% of shared equity homeowners use the equity they gain at the resale of their home to purchase a home on the open market.
DSCLT is flourishing, buying and selling homes and is seeking new properties to acquire, renovate and sell. The agency is the recent recipient of generous funding from Healthy Communities Delaware, Kent County Levy Court and NeighborWorks America, ensuring that its inventory of shared equity housing will continue to grow.
Shared equity housing may not be suitable for everyone, homebuyers and investors included, but it can be a fantastic opportunity for these seeking opportunities to purchase or invest in affordable homeownership and creating healthier communities.
Watch this short video that explains Community Land Trusts:
If individuals are interested in learning more about DSCLT, they can reach out to the program manager, Amy Pratt, at (800) 282-0477or by email at amypratt@diamondstateclt.org.
In 2022, NeighborGood Partners assumed management of the Diamond State Community Land Trust (DSCLT) to ensure that this valuable component of Delaware’s affordable housing continuum would remain in business. DSCLT had struggled for several years but had an inventory of 40 homes statewide and with soaring home sale prices, high interest rates and limited inventory, it was increasingly important to retain this business model as a homeownership option. In 2023, DSCLT’s Program Manager became a full-time member of NeighborGood Partners staff, but the land trust remains an independent organization with its own nonprofit IRS designation.