---
title: a better lease is still a lease
canonical_url: https://ensurance.app/guide/a-better-lease-is-still-a-lease
markdown_url: https://ensurance.app/guide/a-better-lease-is-still-a-lease.md
subtitle: "what reformed leases, community land trusts and purpose trusts fix, what a better lease leaves under it, and who pays to take land out of speculation"
category: nature-finance
---

# a better lease is still a lease

*what reformed leases, community land trusts and purpose trusts fix, what a better lease leaves under it, and who pays to take land out of speculation*

A **community land trust** is usually a nonprofit that holds land for good and leases out the use of it, usually through a long ground lease with a resale formula that keeps the home or farm on it affordable for the next family. It is one of three serious attempts to fix what an ordinary lease does to a place, with the reformed lease and the purpose trust or foundation that takes land out of speculation.

All three do real work. The question under them is who holds the land, and whether it can still be sold.

Start with the land. The soil, the water it holds, the habitat and the flows that cross the property line exist and yield whether or not anyone collects rent on them. *Ensurance* is one way a parcel can be paid out of the rent roll and held for itself. It is not the land, and it is not a better landlord.

:::johnson
**a better lease asks the landlord to take less forever. a payout asks them to take their price once.**

[how a payout works →](/guide/the-annuity-that-ends-the-perpetuity?from=guide)
:::

## what an ordinary lease is built to do

A lease is a contract for possession and use at a price. That price is contract rent, and there is nothing wrong with it: [cash rent](/guide/what-cash-rent-is-already-pricing?from=guide) is how a farmer works a field without buying it. [Three things called rent](/guide/three-things-called-rent?from=guide) separates it from the word's other two meanings.

The trouble is the standard form, written for adversaries. The usual remedy is forfeiture, and the people the place serves have no standing. At the far end sits the [triple-net lease](/guide/the-triple-net-lease-has-a-nature-shaped-hole?from=guide), a good product whose purpose is the owner's income, not the place.

## what a reformed lease fixes

Reformers have a good list:

- **Duties run both ways.** The owner takes on repair and ecological care too.
- **A shared purpose binds the owner** as well as the tenant.
- **The people served have standing** when the terms are tested.
- **Terms travel** to whoever buys the freehold.
- **Drift gets a process.** There are steps before anyone loses the lease.

These terms belong in any use agreement, on any land.

## what a community land trust fixes

A community land trust goes a step further and changes who the landlord is.

The first in the United States was New Communities, incorporated in 1969 by civil rights organizers near Albany, Georgia. Equity Trust's history quotes its founding purpose: "a nonprofit organization to hold land in perpetual trust for the permanent use of rural communities." In 1970 it bought more than 5,000 acres to lease to farm cooperatives and homeowners.

Grounded Solutions Network describes the typical housing case today: a family buys the house and not the land, and leases the land in "a long-term (often 99-year), renewable lease." When they leave, they sell "at a restricted price to keep it affordable in perpetuity." Federal housing law defines the term at 42 U.S.C. § 12704(26).

That resale formula is why [when the park raises the rent](/guide/greening-without-displacement?from=guide) lists community land trusts among what reduces displacement. The cost: the household never owns the land, so its rising price is not theirs to cash out.

## what a purpose trust or foundation fixes

The third reform changes what the owner is allowed to want. A purpose trust holds an asset for a stated purpose, not for the highest return to beneficiaries. A foundation can buy land under a charter that restricts resale, then lease it to its users. [A perpetual purpose trust is not a funded meadow](/guide/a-perpetual-purpose-trust-is-not-a-funded-meadow?from=guide) covers what that wrapper locks, where US law allows it, and what it leaves unfunded.

## five ways to hold the same parcel

| instrument | who holds the land | can the holding be sold | how use is allocated | where payments go | what it needs from the owner |
|---|---|---|---|---|---|
| Ordinary lease | A private owner | Yes, at its capitalized rent | To whoever pays the rent | To the owner | A signature at market rent |
| Reformed lease | A private owner, bound by better terms | Yes, with its terms attached | By a shared purpose | To the owner, often below market | To take less every year |
| Community land trust ground lease | Usually a nonprofit | Rarely; its charter and bylaws restrict it, and a lender can take land that carries debt | By the trust's rules, often by need | Ground rent to the trust; resale gains capped | To sell or give once; the trust finds the price |
| Purpose trust or foundation | A trustee or foundation bound by purpose | Not if the deed and local law hold | By the holder's purpose | To the holder, for the purpose | To sell or give once |
| Entrust (designed; no parcel there yet) | A holder for the place | No; that is the design, unproven in law | By application, need or merit | To the place's account, care first | To take their price once, at once or over a dated path |

## the turn: what is under the lease

A reformed lease changes the terms between landlord and tenant. It leaves the freehold as it was: a saleable claim on an income with no end date, priced at roughly its rent divided by a rate.

An illustration, with made-up numbers: a parcel renting for $40,000 a year, capitalized at 5 percent with no end date, is worth about $800,000. A reformed lease at $30,000 asks the owner to give up $10,000 a year. At the same 5 percent, with no end date, that is about $200,000 of value. So the reformed lease starts with a willing landlord. Terms that bind later owners are the reform's own fix, and a real one: the next owner is held to them, willing or not. They also lower what the freehold sells for, and at renewal the owner is asked again.

Community land trusts and purpose-bound holders have already answered this by taking the land out of speculation. The hard part is getting it there: someone pays the owner's price once, from gifts, grants, public subsidy or debt.

Debt is the dangerous one. At New Communities, Equity Trust records, most of the farm's profits went to servicing the debt on the land, and promised grants were blocked at the state level. After years of drought in which the USDA denied Black farmers the emergency loans white farmers received, New Communities lost the land to foreclosure in 1985. In 2009 it was awarded $12 million in Pigford v. Glickman, the class action over the USDA's discriminatory lending, and in 2011 bought 1,638 acres near Albany. The model did not fail; it was denied the credit others got. While land carries a loan, the lender holds a claim on it.

## a payout, stated honestly

*Ensurance* comes at the same problem from the price. Value the perpetuity the owner would give up and pay it, at once or over a dated path. The designed end state is **entrust**, where the land is held permanently for the place, free of the owner's perpetuity, of debt and of private claims on the land. Contract rent for use can continue. Post 4 of this series does the arithmetic; [permanent protection has to survive us](/guide/permanent-protection-has-to-survive-us?from=guide) covers entrust as a legal state.

What that would add to a community land trust is narrow. The trust already holds land and leases it well. The design adds a dated payout path open to any willing seller, funding for care written in from the start, and payers who are not donors: the people and businesses that depend on the water, soil and habitat the land keeps yielding.

The limits:

- **No parcel is at entrust yet.** It is a design, and its legal permanence is unproven.
- **A payout needs a willing seller and someone to pay.** The owner is asked once, for their price.
- **The path is a payment stream.** While it runs, whoever funds the payout, or the seller until paid, may keep title or security, and the property can stay with them if payments stop. That is the same risk as any land carrying a loan.
- **Leases and rent do not end.** A farmer on entrusted land would still sign a use agreement or lease, and may pay a fee the place's governance sets. What ends is the perpetuity on the land. A certificate or coin is not a use right unless one is built into it, and [none grants access today](/guide/one-token-cant-be-your-home-your-vote-and-your-visit?from=guide).

None of this is legal advice.

The holder at entrust can be a local land trust, a foundation, a group of stewards, or the land itself, through a legal holder with the place as beneficiary or legal personhood where a jurisdiction grants it. [Held for itself, used by many](/guide/held-for-itself-used-by-many?from=guide) covers who checks the holder. The reformed lease is the lease you would want on top; [usufruct](/guide/usufruct-land-access-without-debt?from=guide), use and fruits with the substance kept, is the old idea behind that.

A better lease is still a lease. What matters is what it sits on. [Explore](/explore?from=guide) the places already named.

## frequently asked questions

### what is a community land trust?

A community land trust is usually a nonprofit, typically governed by a board of residents, neighbors and public representatives, that holds land for good and leases it under long ground leases. A resale formula keeps homes affordable for the next household.

### can a community land trust sell its land?

It can, but its charter and bylaws are written to make that hard. Land it has borrowed against can also be lost to a lender.

### does ensurance replace leases or community land trusts?

No. Use after entrust would still run through ordinary use agreements and leases, and a land trust could be the holder. No parcel has reached entrust yet.

## sources

[Grounded Solutions Network, "Community Land Trusts"](https://groundedsolutions.org/strengthening-neighborhoods/community-land-trusts) — "How a Community Land Trust Works": the house bought without the land, the "long-term (often 99-year), renewable lease"; sale "at a restricted price to keep it affordable in perpetuity"; lead paragraph: board of CLT residents, community residents and public representatives

[Equity Trust, "Celebrating New Communities' 50th Anniversary"](https://equitytrust.org/new-communities-50th-anniversary/) — first US community land trust; the 1969 incorporation; the founding purpose, which Equity Trust quotes from CLT Roots & Branches (its note 1); promised grants blocked at the state level; more than 5,000 acres bought in 1970; profits servicing the debt on the land; USDA denial of emergency loans; foreclosure in 1985; $12 million awarded in 2009 in Pigford v. Glickman; the 1,638-acre purchase in 2011

[42 U.S.C. § 12704(26)](https://www.law.cornell.edu/uscode/text/42/12704) — federal definition of "community land trust": a nonprofit or public entity holding land for permanently affordable housing "using a ground lease, deed covenant, or other similar legally enforceable measure," with a preemptive purchase option (subparagraphs (B), (D) and (E))

## the series

1. [rent is a perpetuity](/guide/rent-is-a-perpetuity?from=guide) — **Read first:** why land is priced like an income that never ends, and how a parcel leaves that contest
2. [three things called rent](/guide/three-things-called-rent?from=guide) — Contract rent, economic rent and rent-seeking, and which one entrust ends
3. [a better lease is still a lease](/guide/a-better-lease-is-still-a-lease?from=guide) — What reformed leases fix, and what community land trusts and purpose trusts already do
4. [the annuity that ends the perpetuity](/guide/the-annuity-that-ends-the-perpetuity?from=guide) — Time value of money as a way out that takes nothing from anyone
5. [usufruct: the use is given, the land is held](/guide/usufruct-land-access-without-debt?from=guide) — An old idea rebuilt: use and fruits, the substance kept, the land never for sale
6. [held for itself, used by many](/guide/held-for-itself-used-by-many?from=guide) — Who holds entrusted land, who uses it, and who keeps the holder honest