Council discusses creating Canton Community Land Trust to lower purchase prices for selected buyers at North Canton site

City staff and members of the Canton Housing Team spent more than an hour on June 5 discussing whether to form a Canton Community Land Trust (CLT) and use it to guide development of the 1.9-acre North Canton Cottage Village parcel.

The discussion did not produce a final vote. Instead, staff described a proposal for a project-specific CLT and asked council whether it wants staff to pursue the legal documents, board structure and resale rules and return with a formal package for future action.

The proposal aimed to lower the purchase price of homes by separating the land value from the cost of the house and selling the structure with a long-term ground lease. "If we decided to do this, the city would transfer the land to a land trust," city staff member Michael Dyer told council, adding that the buyer would purchase the structure and a lease rather than the land. Dyer suggested limiting future buyers to households within a targeted area of area median income (AMI) to preserve affordability without complex equity formulas.

Housing-team member Jeff Patton (referred to in the meeting as "Mister Patton") reviewed resale formula options and income limits. He said staff had provided a draft resale formula and examples and noted trade-offs: "Homeowners wishing to pursue this avenue know on the front end that they're not going to maximize that equity," Patton said, describing the fixed-rate formula staff recommended as the simplest option. Patton also provided HUD AMI figures used for eligibility calculations and examples at 60, 80 and 100 percent AMI; he told council the HUD AMI used in staff materials was $114,200.

Staff and several council members discussed raising the down-payment-assistance income cap to 120% of AMI for this project so prospective buyers could qualify for conventional loans at lower sale prices. Dyer offered sample household figures: a 120% AMI example produces roughly $95,000 for a one-person household and $137,000 for a four-person household, numbers Dyer said illustrate the "missing middle" that might be able to buy if the land is removed from the sale price.

Council and staff framed the CLT discussion as a pilot for a small development: the property at issue could yield roughly nine single-family units under the staff—s initial concept, though developers might propose different housing types. Dyer said the city could require any proposed development to be approved by council and that the land trust board could initially be populated by city staff to get the entity started.

Councilmembers raised implementation and governance questions — board composition, enforcement of resale or occupancy restrictions, exceptions for hardship and the mechanics of recording leasehold restrictions on title. Dyer said those details could be drafted before any transfer of city-owned land: "The city council could create the community land trust, establish the makeup of the board, have all the documentation in place before any transfers of property ever occurred from the city to the land trust," he said.

Several councilmembers signaled interest in pursuing the concept as a pilot but emphasized they wanted a full package before any transfer. No formal motion to create a CLT or to transfer property was taken; staff said they would return with detailed legal documents and financing scenarios for council consideration at a later meeting (staff suggested the July meeting as a possible next step).

Clarifying details provided to council included (1) resale-formula options (fixed-rate, index/appraisal-based and mortgage-based variations) and staff preference for a fixed-rate model as simplest; (2) HUD AMI used in staff materials: $114,200; (3) the proposal under discussion targeted roughly nine units on the North Canton parcel and would pair a CLT lease with the city—s down-payment assistance program; and (4) the city could record a memorandum of lease and deed restrictions to enforce income or occupancy limitations for resale.

Council members also asked staff to consider protections against investor purchases and rules for subleasing or hardship rentals; staff said covenants and the lease could prohibit rentals without the land-trust board's consent and that hardship exceptions could be drafted. Staff also warned that a CLT is a long-term tool: some lease terms could last multiple decades and unwinding transfers later would be legally and administratively complex.

The discussion closed with staff agreeing to prepare a full package of governance documents, resale rules, targeted income bands and cost estimates for lead, site work and potential down-payment assistance adjustments for council review at a future meeting.