Land Trust
The Ho‘omaluhia Community Land Trust (HCLT) is an innovative housing solution designed to make homeownership accessible to moderate-income families while ensuring long-term affordability. By separating land ownership from the homes built on it, HCLT reduces costs for homeowners and safeguards affordability for generations.
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In Hawaiian tradition, land (‘āina) is not a commodity but a cherished resource that we are meant to care for and pass on. HCLT embodies this belief by managing land responsibly for the benefit of current and future generations. Our community land trust model aligns with these values by ensuring the land is always in service to the people.
How it works
The HCLT purchases and holds land in trust, making homeownership affordable for families through 99-year renewable ground leases. This model allows families to own their homes, while HCLT retains ownership of the land, creating a more affordable homeownership option and ensuring long-term affordability.
Income Qualifications
To preserve affordability for Kaua’i residents, both initial buyers and any future inheritors must meet HCLT’s 120% AMI income qualifications.
Lease Payments
Homeowners pay an affordable monthly ground lease fee to the HCLT, which helps maintain the trust and community programs, making the model sustainable and homeownership accessible.
First Right of Refusal
When a homeowner decides to sell, HCLT has the first right to repurchase the home, helping to retain affordability within the community.
Resale Formula
If a homeowner chooses to sell, HCLT’s formula-based resale approach allows homeowners to gain value while keeping the home affordable for the next buyer. When selling, the new buyer must also be income-qualified. However, if a qualified buyer cannot be found within six months after the HCLT’s purchase option expires, the home may be sold to any buyer—regardless of income—at a price that does not exceed the then-applicable Purchase Option Price.
Resale Price Calculation
(IPP÷IA)×(CA–IA)×SAF=HSA+IPP=BFP
BFP+CIC-EDC=FP
IPP: Initial Purchase Price
IA: Initial Appraisal (market value at purchase)
CA: Current Appraisal (market value at sale)
SAF: Shared Appreciation Factor
HSA: Homeowner's Share of Appreciation
BFP: Base Formula Price
CIC: Capital Improvement Credit
EDC: Excessive Damage Charge
FP: Formula Price
Shared Appreciation Factor (SAF)
Homeowners can gain a share of appreciation based on how long they’ve lived in the home, starting at 25% after five years and increasing incrementally at 2.5% annually, capping at 47.5% after 14 years.
Capital Improvement Credit (CIC)
An increase based on the cost of any eligible capital improvements made by the homeowner. All capital improvements must be pre-approved by the HCLT.
Excessive Damage Charge (ECD)
A decrease in the amount equal to the value of any excessive damage or neglect.
