Bill > SB307

This bill, known as the Alabama Community Land Trust Act of 2026, authorizes Class 1 municipalities (larger cities in Alabama) to establish community land trusts, which are organizations designed to provide affordable housing for low-income and moderate-income families by separating land ownership from home ownership through ground leases. These trusts aim to keep housing affordable for future residents and capture public investment for community benefit, with their boards of directors having specific appointment and expertise requirements, and their assets being transferred to the organizing municipality or a designated nonprofit upon dissolution. Community land trusts can acquire and lease residential property, enter into ground leases with qualifying lessees, and engage in related activities, with specific rules for leasing to low-income (at least 80%) and moderate-income (up to 20%) families. Ground leases, which can last up to 99 years, include provisions for the trust and municipality to have a preemptive purchase option on improvements, with specific timelines and procedures for exercising these options, and if neither exercises their option, the homeowner can sell at fair market value, with proceeds sharing provisions applying only to the first arm's-length sale. The bill also outlines property tax exemptions and assessment methods for community land trust properties to maintain affordability, and mandates the transfer of assets to the organizing municipality or a designated nonprofit if a community land trust loses its nonprofit status.

Government Affairs

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