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How Land Trusts Work


Conservation and Community Land Trusts
A shot of the Big Sur coastline in California. The Nature Conservancy has protected part of this area through a conservation land trust so future generations can enjoy it.
A shot of the Big Sur coastline in California. The Nature Conservancy has protected part of this area through a conservation land trust so future generations can enjoy it.
© Jean-Pierre Lescourret/Corbis

The Nature Conservancy is a nonprofit organization dedicated to the protection and conservation of natural resources. In the U.S. alone, the Nature Conservancy helps to protect 15 million acres of land from commercial development, industrial pollution and other activities that degrade or spoil land or water resources [source: Nature Conservancy]. The Nature Conservancy is one of the largest examples of a conservation land trust, a organization that acquires properties — through purchase or donation — in order to protect them for future generations.

One of the most popular methods for protecting private land is through a conservation easement. In a way, an easement is similar to the contractual relationship in a real estate land trust. With an easement, a property owner either sells or donates a portion of her land to a conservation land trust. Together, the owner and trustee draw up restrictions on how that land can be used. For example, it may be used for agriculture and recreation, but not real-estate development.

For the property owner, the advantage of a conservation easement is that she retains full property rights to the land. The benefit to the land trust is the ability to place more land under conservation, protecting it from future acquisition and possible exploitation. There are both large and small land trusts operating in every U.S. state and across the world.

Community land trusts are another type of nonprofit organization dedicated to providing affordable housing for lower-income communities. Key to understanding community land trusts is the concept of dual ownership. When you buy a home, you typically pay for both the structure and the land it occupies. With a community land trust, the nonprofit organization buys the land and the homeowner only pays for the house.

As an added benefit, community land trusts sell their homes at affordable prices independent of market fluctuations [source: National Community Land Trust Network]. To buy a home in a community land trust, you must be able to cover your mortgage and upkeep costs, and you must also agree to sell the home for the same price that you paid in order to keep housing affordable.

Unlike real estate land trusts, community land trusts and conservation trusts are legal in all 50 states.

For lots more information about buying a home, investing in real estate and navigating the estate tax, check out the related links on the next page.

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