Community Land Trust Resale Equity Balancer

Understanding Shared-Equity Resale Dynamics

Community land trusts (CLTs) combine community stewardship with resident stability by separating the ownership of land from the improvements built on top. When a resident who purchased a CLT-restricted home wants to sell, a resale formula guides the price, ensuring affordability for the next buyer while granting the departing household a reasonable share of appreciation. This calculator gives stewards, residents, lenders, and policy makers a way to simulate the competing priorities embedded in that formula. Rather than relying on opaque spreadsheets or rules of thumb, you can plug in an initial restricted sale price, the growth in market values, and policy parameters such as stewardship fees and capital improvement credits. The script then estimates the new maximum resale price, calculates how much equity the household will be able to take with them, and checks whether the resulting price still falls within a target price-to-income ratio for households in your community.

The tool is designed for conversations among board members, stewardship committees, and residents who want to adjust policy levers without losing sight of affordability. It mirrors the layout of other calculators on this site so long-time volunteers can navigate quickly, while new stewards see a familiar, accessible interface. Enter data, press the button, and the result block updates instantly—no need to refresh or run macros. Behind the scenes, the script uses a series of guardrails to prevent impossible scenarios, such as negative appreciation or a stewardship fee that would swallow all of the seller’s proceeds. It also performs a ratio check to indicate whether the calculated price would still be affordable to a household earning the updated area median income. By weaving all of these calculations together, the tool helps your CLT weigh trade-offs between intergenerational affordability and the wealth-building goals of resident owners.

How the Resale Formula Is Modeled

Most community land trusts base resale formulas on a combination of market appreciation and the consumer price index. Some formulas grant the resident a fixed share of the change in market value, others tie the change to area median income, and still others use a hybrid. This calculator adopts a flexible hybrid: it takes the initial restricted price, applies the allowed share of regional market appreciation, adds verified capital improvements, and then compares the resulting number to an income-based ceiling. The lower of the two is used as the resale price. Stewardship fees are deducted from the gross resale amount to determine the net proceeds delivered to the outgoing household and the revenue available for stewardship operations.

The market-based portion of the formula can be expressed as:

where is the original restricted price, is the seller’s permitted share of appreciation (expressed as a decimal), and is the market appreciation factor. The calculator converts the percentage entries into decimals and applies them carefully so that negative appreciation reduces the price but never below zero. A second component calculates an income-based cap by multiplying the updated target household income by the desired price-to-income ratio. The tool compares both numbers, subtracts the stewardship fee, and adds capital improvement credits to the seller’s net proceeds.

Inflation matters because some CLTs offer a cost-of-living adjustment even when the market stagnates. The script applies the inflation percentage to the initial price and takes the higher of that value or the initial price if inflation is negative. It then ensures the final price cannot fall below the initial price plus verified improvements unless the market and income caps both demand it. By structuring the calculation this way, the tool mirrors the policies many CLTs use to maintain fairness while protecting affordability for future buyers.

Worked Example

Imagine a household purchased a CLT home for $185,000 five years ago. During that time, unrestricted homes in the area appreciated by 28 percent, while consumer prices climbed 12 percent. The CLT’s policy allows sellers to capture 25 percent of market appreciation, deducts a 2.5 percent stewardship fee, and credits verified capital improvements dollar-for-dollar. The target price-to-income ratio is 3.2, and the area median income for a three-person household rose to $72,000.

Feeding those numbers into the calculator yields the following progression. First, the market-based price equals $185,000 + (0.25 × 0.28 × $185,000) ≈ $198,950. Inflation adjusts the floor to roughly $207,200. The income-based cap comes from $72,000 × 3.2 = $230,400. Because the inflation-adjusted value of $207,200 is lower than the income cap, that figure becomes the gross resale price before improvements. Adding the $15,000 improvement credit brings the total to $222,200. Applying the stewardship fee (2.5 percent) subtracts about $5,555, leaving net seller proceeds near $216,645. The result panel lists these figures alongside the share of appreciation retained by the seller and the amount recycled into stewardship operations. A narrative summary highlights whether the price remains affordable relative to the target income. In this scenario, the resale price is below the income cap, so the calculator notes that affordability is preserved while still granting the seller more than $31,000 above their original investment when improvements are considered.

Scenario Comparison Table

The following table illustrates how changing key policy levers alters the resale outcome. These figures are illustrative and should be recalculated with your own data.

Scenario	Seller Share of Appreciation	Capital Improvements Credit	Stewardship Fee	Net Seller Proceeds	Affordability Check
Baseline	25%	$15,000	2.5%	$216,645	Passes target ratio
Higher Seller Share	35%	$15,000	2.5%	$223,910	Approaches limit
Lower Stewardship Fee	25%	$15,000	1.0%	$219,772	Passes comfortably
No Improvements	25%	$0	2.5%	$201,645	Passes target ratio

The baseline scenario shows a healthy balance between equity building and affordability. Increasing the seller’s share of appreciation boosts their proceeds but nudges the resale price closer to the income-based cap. Cutting the stewardship fee leaves more money with the seller but may reduce the resources available for stewardship services such as foreclosure prevention or energy-efficiency upgrades. Removing improvement credits lowers the price, underscoring why many CLTs encourage documentation of major upgrades.

Additional Policy Sensitivity Table

Because many boards debate how to handle inflation shocks, the next table compares outcomes under different inflation and income growth patterns while holding other inputs constant.

Inflation	Income Growth	Gross Resale Price	Stewardship Revenue	Resulting Price-to-Income Ratio
12%	9%	$222,200	$5,555	3.09
18%	9%	$233,040	$5,826	3.24
6%	4%	$211,010	$5,275	3.06
0%	-3%	$199,750	$4,994	3.37

Notice how the price-to-income ratio stretches when income growth stalls even if inflation is moderate. This insight can prompt CLTs to revisit subsidy layering strategies, such as combining resale formulas with additional down payment assistance or shared appreciation mortgages.

Connections to Other Tools

Stewardship staff often juggle multiple planning tasks. After modeling resale outcomes here, you can cross-reference the fundraising implications using the mutual aid fund runway calculator or evaluate program cash flow with the community solar subscriber allocation balancer. To analyze long-term maintenance planning, consider pairing this tool with the community land trust affordability layering calculator, which explores how subsidies stack at acquisition.

Limitations and Assumptions

No single calculator can capture the diversity of resale policies. This tool assumes the resale price is the lower of the market-based calculation and the income-based cap. Many CLTs add additional caps, such as a fixed annual appreciation rate or a resale value that must fall within a corridor around appraised value. You should review your ground lease to ensure your policy aligns with the assumptions baked into this model. The script treats capital improvements as an additive credit without depreciation, yet some organizations apply a sliding scale depending on the age of the improvements. Additionally, the calculator does not handle second mortgages, silent liens, or shared appreciation loans that might need to be repaid at resale. Those obligations can drastically change the net proceeds available to a household. Finally, the affordability check uses a single target income rather than a range; if your organization serves multiple income bands, rerun the model for each tier.

The calculator also assumes the stewardship fee is a percentage of the gross price. If your organization charges a flat fee or ties it to service costs, you may need to convert those charges into an equivalent percentage before using the tool. Inflation and income percentages are applied cumulatively since purchase; if you track annual changes, convert them into a cumulative figure. Because inputs are user-supplied, the tool performs validation to ensure values like appreciation share or stewardship fee stay within reasonable bounds, but it cannot detect every outlier. Exercise caution when interpreting outputs that seem too good to be true.

Practical Tips for Using the Results

Start by entering the actual values from a recent resale to benchmark the tool against a real transaction. If the result differs from what actually occurred, adjust the inputs to align with your policies—this process helps you calibrate the tool before exploring new scenarios. Next, test different policy levers to see how sensitive affordability is to stewardship fees or appreciation shares. If the price-to-income ratio exceeds your target, consider how layering deeper subsidies or refinancing first mortgages might restore affordability. Use the stewardship revenue output to plan your organization’s operating budget and to justify grant requests for stewardship work.

Many CLTs commit to transparent decision making with residents. Share screenshots or summaries generated by this calculator during community meetings so households understand how the resale price is determined. Combine the quantitative output with narrative context about why the CLT uses a particular formula, emphasizing the balance between individual wealth building and long-term community affordability. The more residents understand the mechanics, the more trust they place in the stewardship process.

Finally, revisit this calculator whenever local market conditions shift. Rapid appreciation, inflation spikes, or income stagnation can quickly erode affordability. Regular modeling ensures your policies adapt alongside community needs. Because the tool operates entirely in the browser with no data stored on external servers, it supports community control and privacy while delivering rigorous analysis.