Senate Bill 307 Alabama 2026 Session

Summary

Primary Sponsor

Merika ColemanRepresentative

Democrat

Session

2026 Regular Session

Title

Class 1 municipalities; authorization to establish community land trusts, affordable housing

Summary

SB307 would let Class 1 municipalities create nonprofit community land trusts to provide affordable housing through long-term ground leases to low- and moderate-income families.

What This Bill Does

Authorizes Class 1 municipalities to establish one or more community land trusts (CLTs) that operate to provide affordable housing through 99-year ground leases with qualifying lessees. Requires CLTs to be membership-based with open meetings and a seven-member board appointed partly by the municipality and partly by the mayor, and gives the CLT power to acquire/lease property, improve housing, and manage ground leases. Creates mechanisms to preserve affordability, including a resale-restricted formula and occupancy rules, and sets aside a process for the municipality and CLT to purchase improvements or property under preemptive purchase options. Allows property tax exemptions for certain CLT-owned properties and outlines how property is assessed and taxed when under a ground lease.

Who It Affects

• Qualifying lessees: low-income and moderate-income families would be eligible to lease housing units from the CLT under long-term ground leases, with affordability requirements limiting housing-related costs to no more than 30% of household income and unit mix rules for multi-unit dwellings.
• Class 1 municipalities and CLTs: cities would have the authority to create and regulate CLTs, appoint boards, oversee property acquisitions and leases, and potentially benefit from tax exemptions and long-term housing development tools.

Key Provisions

• Section 4 authorizes Class 1 municipalities to create and regulate one or more nonprofit community land trusts by ordinance.
• Section 5 establishes CLT governance: membership-based structure, open meetings, and a seven-member board with specific appointment rules and diversity considerations.
• Section 6 grants CLTs powers to acquire/lease real property, construct/improve residential property, enter into ground leases, and accept funding from municipalities and other sources.
• Section 7 sets occupancy rules: at least 80% of leased units for low-income families and up to 20% for moderate-income families for multi-unit projects; status of lessee determined at lease inception.
• Section 8 provides preemptive purchase options for CLTs and organizing municipalities to buy improvements or property, with timelines (120 days for CLT, 120 additional days for the municipality) and transfer mechanisms.
• Section 9 limits ground leases to a maximum of 99 years and requires inclusion of key terms such as resale restrictions, preemptive options, and lease-violation grounds.
• Section 10 describes property tax treatment: exemptions for certain CLT properties and valuation rules, including initial sale-price assessments and ongoing assessments using a limited equity or income-based approach.
• Section 11 requires nonprofit status to be maintained for CLTs and provides transfer procedures if nonprofit status ends.
• Section 13 states the act becomes effective October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 13, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties & Municipalities