The most prevalent strategy for keeping commercial land permanently affordable is to facilitate mission-driven organizations in their purchase and management of scarce private land. Three types of organizational entities that have this capability are commercial land trusts, commercial development corporations, and public development agencies. The management of commercial land by these entities accomplishes three things:
(1) It removes land from the free market;
(2) Reserves it for community use; and
(3) Ensures the land can stay affordable for an extended period of time, since the landowning organizations are not profit-driven.
Each type of entity is distinct, presenting a set of advantages as well as disadvantages for each.
- Community (and Commercial) Land Trusts
Community (or commercial) land trusts, or CLTs, are nonprofit organizations that maintain permanently affordable residential or commercial space by acquiring land and then selling the improvements on it while maintaining ownership of the land underneath through a ground lease. Building owners receive a lower entry cost into home or business ownership, with the caveat that they are limited in how much they can sell the property for, if they choose to do so, to maintain a level of affordability. CLTs may also provide affordable commercial space through subsidized rents in more typical tenant-landlord relationships.
- Commercial Development Corporations
Community Development Corporations (CDCs) are nonprofit organizations that represent the interests of a specific, often low-income, neighborhood. They may form through neighborhood planning processes, or come about from a grassroots need to address specific social issues. CDCs are unique in that their governance structures are either partially or fully community-controlled. As a result of their structure and deep ties, CDCs are able to merge planning with implementation. Their strategic planning is typically more comprehensive, more coordinated, and has a longer-time horizon than strategic plans created by the government, foundations, or other nonprofits.
- Public Development Agencies (or Public Development Authorities)
Public Development Agencies or Public Development Authorities (PDAs) are quasi-governmental corporations created by a city, town, or county ordinance to manage a special project or carry out a specific mission of public value. The municipality that creates a PDA does not legally own it, but it does oversee its budget and operations.
Table: Comparison of Entities