Community Land Trust Resale Equity Balancer
How this community land trust resale tool works
This calculator helps you explore how different community land trust (CLT) resale policies affect three big questions: what the next buyer pays, how much equity the selling homeowner receives, and how much funding the steward (CLT or nonprofit) retains to keep homes affordable. It is an educational model you can use to test resale formulas before writing them into program documents.
In a typical CLT, the organization owns the land and the household owns the improvements (the home itself). The buyer gets a below-market initial restricted sale price in exchange for agreeing to a resale formula that limits how much the home can appreciate when they sell. This tool lets you combine market appreciation, a seller's share of that appreciation, stewardship fees, and credits for verified capital improvements. It also gives you affordability indicators using income and price-to-income ratios.
Key inputs and policy levers
- Initial restricted sale price ($): the original purchase price paid by the first buyer under CLT or shared-equity restrictions. This is the baseline the resale formula builds on.
- Regional market appreciation since purchase (%): an estimate of how much similar unrestricted homes have changed in value over the same period. For example, 28% means the broader market is roughly 28% higher than at the time of purchase.
- Share of market appreciation allowed to seller (%): the fraction of that market gain the seller can keep. A 25% share means the seller benefits from one-quarter of the observed market appreciation while the remaining appreciation is effectively retained for affordability.
- Stewardship fee at resale (% of gross price): a policy tool that deducts a small percentage of the resale price to support long-term stewardship costs such as compliance monitoring, counseling, or resale administration.
- Verified capital improvements credit ($): the dollar value of approved improvements (for example, a new roof or accessibility upgrades) that the CLT agrees to recognize in the resale calculation so that owners are compensated for qualifying investments.
- Consumer price index change since purchase (%): change in general prices in the economy, often measured by CPI. Some resale formulas use CPI as an alternative to or in combination with market appreciation to moderate price growth.
- Local median income growth since purchase (%): change in area median income (AMI) or local median household income. Income-based indexing is common in CLTs that want resale prices to track what local households can realistically afford.
- Target price-to-income ratio for affordability: an affordability standard, such as 3.0 or 3.2 times household income, used to test whether the modeled resale price is within reach for the intended buyers.
- Target household median income at resale ($): the income level (for example, 70% of AMI for a given household size) that the program aims to serve at the time of resale.
Core formulas in plain language
The calculator is structured around a few simple relationships. While individual CLT documents may use more complex wording, the main ideas are:
- Market appreciation amount is the initial price multiplied by the regional appreciation rate.
- Seller's share of appreciation is that appreciation amount multiplied by the policy's share percentage.
- Pre-fee resale price starts from the initial restricted price, adds the seller's share of appreciation, and adds any verified capital improvement credit.
- Stewardship fee is a percentage of the gross resale price; proceeds to the seller are the gross price minus this fee.
- Affordability check compares the modeled resale price to the income-based maximum affordable price implied by your price-to-income ratio.
In symbolic form, an illustrative version of the resale price calculation can be written as:
where:
- Pinitial is the initial restricted sale price,
- rmarket is the market appreciation rate (for example, 0.28 for 28%),
- sshare is the seller's share of that appreciation (for example, 0.25 for 25%), and
- Cimprove is the capital improvements credit.
The affordability benchmark price based on income can be expressed as:
where Itarget is the target household income at resale and kratio is your price-to-income ratio standard. If the modeled resale price is much higher than Pafford, the home may no longer be affordable to the intended income group.
Interpreting the results
When you run the calculator, you can focus on three types of outputs (actual labels may vary slightly):
- Modeled resale price: the gross price paid by the new buyer under the selected resale formula, before stewardship fees.
- Seller proceeds: the estimated amount the current homeowner receives after subtracting stewardship fees and any other modeled deductions from the gross price.
- Affordability indicators: comparisons between the modeled resale price and the income-based affordability benchmark. These can flag if the formula is drifting away from the program's target income group.
For policy design, look at how changes to the seller's share of appreciation and the stewardship fee shift these outcomes. Higher seller shares and low fees tend to increase seller proceeds but can push resale prices closer to market levels. Lower seller shares and higher fees can preserve affordability and stewardship capacity but may limit wealth-building for homeowners.
Worked example scenario
Suppose a CLT home was initially sold for $185,000. Regional home prices have risen 28% since that time. The CLT's policy allows the seller to keep 25% of that appreciation, recognizes $15,000 in verified improvements, and charges a 2.5% stewardship fee at resale. The program wants the home to remain affordable to a household earning $72,000 with a target price-to-income ratio of 3.2.
Using the conceptual formulas above:
- Market appreciation amount ≈ 185,000 × 0.28 = 51,800.
- Seller's share of appreciation ≈ 51,800 × 0.25 = 12,950.
- Pre-fee resale price ≈ 185,000 + 12,950 + 15,000 = 212,950.
- Stewardship fee (2.5%) ≈ 212,950 × 0.025 ≈ 5,324.
- Seller proceeds (before transaction costs not modeled here) ≈ 212,950 – 5,324 ≈ 207,626.
- Income-based affordability benchmark ≈ 72,000 × 3.2 = 230,400.
In this simplified example, the modeled resale price of about $213,000 is below the $230,400 affordability benchmark, suggesting the home is likely still affordable to the target income group, while the seller also receives some equity gain and reimbursement for improvements.
Comparing different resale approaches
You can use the calculator to mimic several common CLT resale formula types by adjusting inputs and running multiple scenarios, even though the tool itself focuses on one scenario at a time.
| Resale approach | How to approximate it with this tool | Typical trade-offs |
|---|---|---|
| Fixed share of market appreciation | Use regional market appreciation and set a specific seller share (for example, 20–30%). Keep CPI and income growth as context only. | Tracks local housing market; can erode affordability during rapid booms if the share is high. |
| CPI-indexed formula | Base appreciation on CPI change instead of market appreciation. Try lowering the market rate or using it only as a ceiling. | More stable and predictable; may lag behind construction costs and local market pressures. |
| Income-indexed formula | Focus on income growth and adjust resale price so that the price-to-income ratio stays near your target. | Keeps homes aligned with what local households can pay; seller equity growth is directly tied to income trends. |
| Hybrid or corridor formulas | Test scenarios that cap appreciation using the lowest or highest of several indices (market, CPI, income). | Balances predictability with market responsiveness; requires more explanation to homeowners and lenders. |
By running the calculator two or three times with different combinations of rates and shares, CLT staff and policymakers can visualize trade-offs between homeowner equity-building and preserving deep affordability across future resales.
Assumptions and limitations
This tool is an educational estimator and does not replace legal, financial, or program-specific calculations. Every CLT and shared-equity program has its own ground lease, resale formula language, and local regulatory context. Before adopting any numbers from this tool, verify them against your official documents and consult appropriate professionals.
- Simplified appreciation dynamics: the calculator assumes a single market appreciation rate over the holding period. It does not model year-by-year changes, local submarket variations, or condition adjustments.
- Program-specific rules: real-world CLTs often have detailed rules around maximum improvements credits, depreciation, required repairs, and how fees are shared or waived. This tool treats the improvement credit and stewardship fee as straightforward inputs without those nuances.
- Financing and transaction costs: mortgage payoff amounts, closing costs, taxes, and subsidies from third parties (such as soft second mortgages) are not modeled unless your program builds them into the prices you enter.
- Income and affordability metrics: the "target household income" and "price-to-income ratio" are user-entered estimates. The tool does not pull official AMI tables or adjust for household size, property taxes, interest rates, or insurance costs.
- Policy design, not compliance: outputs should be read as indicative ranges to support board discussions, counseling conversations, or policy drafts. They should not be treated as the definitive resale price or as evidence that a specific transaction complies with any particular ground lease.
By keeping these assumptions in mind, you can use the calculator to compare directions and magnitudes rather than precise dollar-perfect outcomes.
Who can use this calculator and how
CLT staff and boards can use the tool to test draft resale formulas and illustrate how minor changes in seller share or stewardship fees play out over time. Housing advocates and city agencies can use it to understand the policy implications of different shared-equity designs. Homeowners and prospective buyers can explore how their equity might grow under various resale policies and why long-term affordability protections matter for the larger community.
Pair this tool with your program's written resale formula and, where available, other shared-equity affordability calculators to build a fuller picture of both household-level and system-level impacts.
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.