Four questions are useful for understanding what “community ownership” means in practice:
- What are the goals of community ownership? In the broadest terms, community ownership leverages property ownership for the “common good” of a defined community. What is meant by the “common good” varies based on the community, giving rise to many distinct community ownership models (Table 1) designed to achieve different goals, including preserving affordability, building wealth, and harnessing control of assets and neighborhood change (Figure 1). Some of these models are focused on owner-occupied residential property (housing), whereas others focus on those holding income-generating assets (commercial real estate, including multifamily rental housing).
- Who is the ‘community’ in community ownership? The definition of ‘community’ varies based on the model (Figure 1), but most models stipulate geographic boundaries which could be as large as a city, county, or state or as small as zip codes. Some models prioritize shares for residents with earnings below a certain percentage of the area median income.
- Who ‘owns’ the property in community ownership? The legal owner also depends on the model (See “Possession” in Table 2). In some models, like Community Land Trusts (CLTs), ownership is divided between a nonprofit entity (who owns the land) and individuals within a community (who own the buildings on the land). In others, like REITs, the owner is a corporation and residents can become shareholders in the corporation to profit from development. In all cases, the key distinction is that individuals can earn, buy, or build their own equity while sharing control.
- How do individual wealth and community ownership intersect? Individuals do not give up all property rights when they enter a community of ownership. The mechanisms vary based on model (see Table 2), but in general, individuals and the community negotiate a set mechanism to share the benefits and obligations of ownership between individuals and the community. This mechanism then enables the community to pool resources—often using a system of shares. Shares belonging to individuals can then represent equity that can be grown, traded, or borrowed against, a right to collect shorter-term dividends (for properties generating income), and/or a proxy for share of control. Table 1 expands upon wealth-building components of each model.