How does Forest City's Community Land Trust work?

The Community Land Trust is part of the scheme to solve a specific problem: the city will sell homes well below market prices—to make them actually affordable—instead of optimising to make as much money from homes as possible.

The risk here is that a bunch of "investors" come along and buy the homes cheaply, then re-sell them for twice the price—making money for themselves and effectively stealing the discount that is intended for future generations.

So to solve this, each home is sold with a covenant—if you want to sell one of these new homes, you must sell it back to the city as buyer of first resort at a valuation decided by the CLT (governed by residents). Typically, CLTs publish a valuation formula which includes inflation, gradual normalisation with market rates, and some discretionary amount based on improvements that have been made to the home since it was bought.

Of course, if the city declines to buy back the home, it can be sold on the open market.