The Neighborhood Trust

What is a Neighborhood Trust? A New Economic Development Tool

“It simply cannot be that in the wealthiest country in the world, we cannot restore neighborhoods without destroying them. That’s a moral obscenity.” - Joe Margulies, Cornell Professor of Practice, Law, and Government

The Neighborhood Trust is a new economic development tool for community wealth building, community control, and affordability in gentrifying cities and neighborhoods.  The model is articulated by Joe Margulies in a 2019 article titled, “Communities Need Neighborhood Trusts,” and his 2021 book, Thanks for Everything (Now Get Out) Can We Restore Neighborhoods without Destroying Them? Below we share the learnings from the 2022 Inclusive Economic Development Lab exploring the use of Neighborhood Trust models in two cities.  There are two mini-case studies where the Trust model is being used, one in Philadelphia, PA and one in Austin, TX. The Kensington Corridor Trust case in Philadelphia is focused on securing part of a commercial corridor to put under neighborhood control and on creating opportunities for local entrepreneurs.  The second case is a Cultural Trust, focusing on building in affordability for arts and culture organizations in an expensive Austin real estate market.

Kensington Corridor Trust
Case study #1
Kensington Corridor Trust
 
Austin Cultural Trust
Case study #2
Austin Cultural Trust
 

Differences between CLT and NT models

 

Community Land Trust

Neighborhood Trust

Purpose
  • Focuses on maintaining affordability in areas with rising property values
  • Can also be used to maintain affordability,
  • Additionally, can be used capture wealth in areas with rising property values

How It Works
  • Land and house are separated; CLT retains ownership of land; resident buys or rents the property at a locked-in, below-market value. If the homeowner wants to sell, they must sell at a below-market value dictated by the trust.
  • Does not separate land and property; can be more flexible.
  • Trust acquires property, and its board decides what it is used for, who leases it, at what rate.
  • Trust can hold multiple types of assets.
  • Broader purpose of the trust can help stabilize an entire neighborhood.

Governance
  • CLT residents, other residents, and experts and stakeholders create the board.
  • Varies based on model, could include a perpetual purpose trust in tandem with a 501(c)3 and or a stand-alone perpetual purpose trust.

Finances
  • Public and philanthropic capital including foundations, government subsidies, and private donors.
  • Public, private, and philanthropic capital including foundations, government subsidies, and private donors, and debt.

Neighborhood Trust Info Session Recording

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