Garrett Realty Services, Inc. - Seagrove Plaza, Seagrove Beach, Florida - 800.537.5387 info@garrettrealty.com

Real Estate Articles

Land trust

A land trust is an organization established to hold land and to administer use of the land according to the charter of the organization. A land trust is a useful way to manage complex divisions of the Bundle of Rights that people can own in real estate, and can be used to manage something as large and complex as a multi-state REIT, or as common and small as a single-family home.

Investment trust companies hold property for investment purposes and non-citizens who want long-term access to land in Mexico often enter real-estate trust agreements, called fideicomiso, with Mexican citizens, but land trust more often refers to a community scale organization. Community land trusts are established to provide low- and middle-income families access to affordable housing while conservation trusts protect environmentally, historically or culturally valuable places. Land trusts are also in place to protect farmland and ranchland.

Contents
* 1 Community land trusts
* 2 Conservation land trusts

Community land trusts

Land trust communities trace their conceptual history to India's gramdans where villages held property in the community interest, and to European and North American land banks, which are quasi-public agencies that invest in land often to help build family farms or to encourage economic development. Residential land trusts emerged in the United States after calls among civil rights leaders in the 1950s and 1960s in the American South for economic reforms to reverse rampant poverty. An Institute for Community Economics was organized in the 1960s to help residential trusts:

* Gain control over local land use and reduce absentee ownership

* Provide affordable housing for lower income residents in the community

* Promote resident ownership and control of housing

* Keep housing affordable for future residents

* Capture the value of public investment for long-term community benefit

* Build a strong base for community action

Residential community land trusts are now widespread in the United States , but seldom gain much notice beyond occasional local news accounts. The Institute for Community Economics in 2004 reported nearly 120 community land trusts of varied sizes in 30 states, the District of Columbia and in five Canadian provinces. While a few earlier trusts faltered, the number of land trusts in North America overall nearly tripled between the 1987 and 2004.

Community trusts don't typically advertise their goals, but rely on community members and word of mouth to attract new residents. In residential land trusts, the community association usually owns land, while their occupants' own buildings. Trusts usually retain rights to buy buildings from residents who move out of the community. The goal of residential trusts is often to protect housing prices from real estate speculation and gentrification but to allow residents to accrue equity, including sweat equity.

Conservation land trusts

The goal of conservation trusts is to perpetually preserve sensitive natural areas, farmland, ranchland, water sources, or notable landmarks. These include enormous international organizations such as The Nature Conservancy, as well as smaller organizations that operate on national, state/provincial, county, and community levels. Conservation trusts often, but not always, target lands adjacent to or within existing protected areas.

Many different strategies are used to provide this protection, including outright acquistion of the land by the trust. In other cases, the land will remain in private hands, but the trust will purchase a conservation easement on the property to prevent development, or purchase any mining, logging, drilling, or development rights on the land. Trusts also provide funding to assist like-minded private buyers or government organizations to purchase and protect the land forever.

As most land trusts are non-profit, they rely on endowments or donations to provide capital to acquire land or easements. Donors often provide cash, but it is not uncommon for conservation-minded landowners to donate an easement on their land, or the land itself. Some trusts also receive funds from government programs to acquire, protect, and manage land. Some trusts can afford to pay employees, but many others depend entirely on volunteers.

When land is acquired, trusts will sometimes retain ownership of the land in perpetuity, or sell the land to a third party. This third party is often the government, which will usually add the land to an existing protected area, or create a new one entirely. Land trusts were instrumental in the 2004 creation of Great Sand Dunes National Park in Colorado , as well as the expansion of Hawaii Volcanoes National Park by 50% in 2003. Land trusts also sell land to private buyers, usually with a strict conservation easement attached. Keeping the land under private ownership has the added benefit of maintaining the land on local property tax rolls, providing income to the local government.

Some areas have extremely limited public access for the protection of sensitive wildlife, or to allow recovery of damaged ecosystems. Many protected areas are still under private ownership, which tends to limit access as well. However, in many cases, land trusts work to eventually open up the land in a limited way to the public for recreation in the form of hunting, hiking, camping, wildlife observation, watersports, or other responsible outdoor activities. This is often with the assistance of community groups or government programs. Some land is also used for sustainable agriculture or ranching, or even for sustainable logging. While important, these goals can be seen as secondary to protection of the land from development.

The Land Trust Alliance, formed in 1981, provides technical support to the growing network of land trusts in the United States . The Alliance performs a National Land Trust Census that keeps track of the land protected by local and regional land trusts[1]. The last Census, conducted in 2003, reported that these trusts have protected almost 9.4 million acres (38,000 km²) of land in the United States , double the 4.7 million acres (19,000 km²) recorded in the 1998 survey. Over 5 million acres (20,000 km²) of that was protected by conservation easement in 2003. Although it does not include national or international land trusts in its Census, the LTA estimates another 25 million acres (100,000 km²) in the U.S. have been protected by those organizations. The largest amount of land protected by local and regional trusts is in the Northeast with 2.9 million acres (12,000 km²), while the fastest growing region between 1998 and 2003 was the Pacific (consisting of California , Nevada , and Hawaii ), with protected land increasing 147% to 1.5 million acres (6,100 km²) in 2003.

In 1891, the Trustees of Reservations was founded, the first land trust in the entire world. Land trusts now operate in all 50 U.S. states, as well as many other countries. Since then, the number of land trusts has steadily increased, with most forming in the last 25 years. Over 300 new local and regional trusts were formed in the period from 1998 to 2003 alone, with the last LTA Census counting 1,537 operating in the United States . Over 1,000 of these are members of the LTA. California now has the most land trusts, with 173 operating statewide in 2003. Massachusetts , despite being much smaller, was a close second with 154 land trusts that year.

In October 2002, Property and Environment Research Center published a report by Dominic P. Parker entitled Cost-Effective Strategies for Conserving Private Land . This paper identified numerous ways for operating land trusts more efficiently, pointing out that conservation easement and other tools for land preservation may be less costly than ownership. Sometimes the various rights associated with land ownership are separable. A preservationist organization may, for instance, buy only the extraction rights on a property with oil or minerals, and then rent those rights to extracters on the organization's terms. The terms might include requirements to protect the environment and pay the organization royalties on materials extracted. Many land trust organizations had already been using these strategies for years when this report was published.