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Community land trust property assessments bills unlikely to pass this session

By Bente Bouthier

Posted February 21, 2024

a graph showing where land banks come from

(Screenshot from Prosperity Indiana presentation)

Two similar bills supporting community land trusts are most likely dead at the statehouse.

Community land trusts build affordable homes while maintaining ownership of the land the homes sit on. This keeps the home price affordable for future buyers.

Homes on a land trust are sold under market. House Bill 1029 and Senate Bill 207 propose this be considered in the land trust homes’ property tax assessments.

Language from one bill can get added into another, but it’s unlikely that will happen for either bill.

Policy Director for Prosperity Indiana Andrew Bradley said at this point typical pathways for the bills to advance are closed. But he doesn't think community land trust supporters should be discouraged.

He said House Bill 1029 and Senate Bill 207's introduction by authors Representative Maureen Bauer and Senator Shelli Yoder educated the legislature on land banks as an option for affordable housing.

"I think that as more legislators get to know this idea of community land trust, it's going to be seen as, 'Hey, this is another opportunity we have at no real cost to taxpayers to increase the supply of affordable housing throughout the state.'"

A longer budget session provides more opportunity for bi-partisan support, which wasn't the case this year.

Nathan Ferreira, the director of real estate development for the Bloomington Housing Authority, said either bill’s passage would have been helpful for the Summit Hill Land Trust being built in Monroe County.

But monthly payments will still be lower than most homes because homeowners at Summit Hill won't pay taxes for the land their house sits on, just the house itself.

"The land is owned by the nonprofit land trust entity," Ferreira said. "And so that alone, saves the homeowner money and makes it their monthly payments more affordable.”

Ferreira said most housing land trusts in Indiana operate this way.

And as a nonprofit, a land trust can apply for property tax exemptions.

"Our homes are not going to gain value, like market rate homes" he said. "They're not meant to, they are part of, you know, a community land trust program that's meant to keep these houses affordable."

The first homebuyer on a community land trust purchases the house under market rate. In return, when they resell, it is required to sell below market rate again.