Highland Park Illinois Community Land Trust
Frequently Asked Questions

What is the Highland Park Illinois Community Land Trust (HPICLT)?
HPICLT is a private not-for-profit organization created to own land for the benefit of the Highland Park community. HPICLT will provide and preserve permanently affordable housing on this land.

How does the HPICLT benefit the community?
Rising land and housing costs and a loss of affordable units have limited housing options for many people who live or work in Highland Park. These trends have threatened the City’s tradition of inclusiveness. It is difficult for many local businesses to hire and retain employees. In addition, workers making long commutes add to traffic congestion. Escalating land prices have also increased the number of residential tear-downs, changing the character of many city neighborhoods.

By holding land for the benefit of the community, HPICLT will counter increasing housing costs that are driven by rapidly appreciating land values. In addition, by focusing on preserving existing housing stock HPICLT will help preserve the character of existing neighborhoods. Finally, through the resale restrictions, HPICLT will maximize the cost-effectiveness of the public and private investment used to make land trust homes affordable to the first buyer, providing a fair return to the homeowner while ensuring continued affordability for succeeding buyers.

How did HPICLT get started?
HPICLT is an outgrowth of the process begun in the late 1990s to update the City of Highland Park’s comprehensive Master Plan. The Master Plan housing goals emphasize the City’s commitment to cultural and economic diversity, diversity of housing stock and costs, and to providing affordable housing in neighborhoods throughout the community. In the many meetings that occurred during the master planning process, residents expressed increasing concern about the lack of affordable housing and the need for new strategies to implement the City’s housing goals. The City Council directed the Housing Commission to develop an affordable housing plan as an element of the Master Plan. Creation of a community land trust was a key recommendation of the affordable housing plan adopted by the Council.

What is the relationship between the City and HPICLT?
While the City of Highland Park was instrumental in its creation, HPICLT is a private, not-for-profit organization that operates independently of the City. To help ensure a close working relationship between the City and HPICLT, three HPICLT Board members are “public representatives,” appointed by the Mayor with the advice and consent of the City Council. At least one of the public representatives is a Council member and at least one is a member of the Highland Park Housing Commission.

How is HPICLT funded?
As a private rather than a public entity, the CLT has the ability to raise money from foundations and other private funding sources. It will raise money for its operations and its housing activities from a variety of public and private sources, including the Highland Park’s new Housing Trust Fund. The organization’s start-up funds are from the Housing Trust Fund.

How is HPICLT governed?
A nine-member Board of Directors governs the HPICLT. The Board is comprised of a representative cross-section of key stakeholders in the community with an interest in affordable housing. Three are “public representatives,” including at least one City Council member and at least one member of the Highland Park Housing Commission; three are “lessee representatives,” including individuals who live on land owned by HPICLT or who represent organizations that serve the interests of the target population; and three are “general representatives” from the community at large.

How does the HPICLT work?

• HPICLT acquires properties, including attached and detached single-family homes, and retains title to the land.
• It sells homes to income-qualified buyers at affordable prices, while leasing the land through a ground lease for a nominal fee.
• The ground lease contains restrictions on the resale of the home. When resold, homes must be sold to HPICLT or an income-qualified buyer at a formula price that gives owners a fair return on their investment while keeping the homes affordable for future buyers.

(It is also possible for HPICLT to rent housing that it owns, but its initial focus will be on home ownership.)

How will HPICLT acquire property?
HPICLT will purchase properties available on the market. It also can receive donated properties. Property owners may be able to receive a tax deduction for property they donate or sell below the appraised value.

Properties can include a variety of housing, such as single- family homes, duplexes, town homes, condominium units, small multi-unit buildings, as well as undeveloped land. HPICLT’s initial focus will be on acquiring existing attached and detached single-family dwellings. Properties will be located on scattered sites throughout Highland Park. During its first year of operation, HPICLT expects to purchase approximately six units.

How does HPICLT home ownership compare with other home ownership?
HPICLT homeowners enjoy most of the benefits of traditional homeownership, but in exchange for buying the home at an affordable price there are some differences:

Same

• The homeowner has a mortgage with a bank
• The homeowner accumulates equity
• The home can be inherited
• The homeowner pays property taxes
• The homeowner can make alterations and improvements
• The homeowner receives federal mortgage tax deduction and a 5% property tax credit on state income tax

Different

• The purchase price is lower, usually about 20-30% below the market rate because HPICLT will write down the price
• HPICLT owns the land under the home. The homeowner leases the land from HPICLT for a nominal fee
• The resale price of HPICLT homes is based on a formula designed to ensure the continued affordability of the home

What is the process for reselling the home?
When a homeowner is ready to sell, the home must be sold to HPICLT or an income-qualified buyer at a formula price that gives owners a fair return on their investment, while keeping the homes affordable for future buyers.

Under the formula, the owner will receive a portion of the appreciation in the market value of the property (the home and the land) during the period of ownership. The resale price is the lesser of the appraised value at the time of resale and the formula price.

How do property taxes work on CLT properties?
HPICLT homeowners pay all the taxes associated with their property. As it is for all homeowners, the interest portion of mortgage payments is tax deductible from federal income tax. For homeowners who itemize federal income taxes, property taxes are also tax deductible. Homeowners can also receive a credit on their state income tax of 5% of their property taxes.

[Insert explanation of how properties will be assessed once there is a clear agreement with the assessors.]

Who will live in HPICLT homes?
HPICLT will give priority to low- and moderate-income individuals and families who live or work in Highland Park:

• People who work in Highland Park but are priced out of the housing market – e.g., teachers, police and fire personnel, local service workers, etc.
• People who live in Highland Park but cannot afford to remain – e.g., seniors, single parent families, young adults, etc.

HPICLT homeowners will be required to meet income eligibility criteria, be creditworthy, and able to qualify for private mortgage financing.

HPICLT income limits are tied to the Chicago area median income (AMI), adjusted by household size, as determined annually by the Department of Housing and Urban Development. Maximum income limits will vary depending on funding source requirements but will not exceed 120% of the Chicago AMI. [Insert more specific information about income.]

How can you help?
As an individual, a business, or an organization, you can choose to help HPICLT by:

• Making a financial contribution
• Donating office equipment and supplies
• Contributing professional services
• Donating property or sell for below appraised value
• Volunteering

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