The Alabama Community Land Trust Act of 2026, designated as bill HB404, empowers Class 1 municipalities to create and manage nonprofit community land trusts aimed at fostering affordable housing options. The legislation outlines the structure and responsibilities of the board of directors, which must consist of seven members with relevant expertise, including a registered architect or city planner, and mandates annual audits by the Department of Examiners of Public Accounts. The community land trusts are authorized to acquire and lease real property to low-income and moderate-income individuals through 99-year ground leases, which must include options for repurchase by the trust or municipality. The bill also introduces ad valorem property tax exemptions for certain properties held by the trust and establishes clear definitions for affordable housing and the roles of stakeholders involved.

Key amendments in HB404 include provisions that allow municipalities to assign purchase options to qualifying owners without additional criteria, and it clarifies that subsequent purchasers will receive title free of rights established in the ground lease, while still adhering to lease payments. The bill emphasizes transparency, competitive processes in leasing, and non-discrimination in tenant selection. It also stipulates that if a nonprofit loses its status, it must transfer its interests in ground leases within 120 days. The act is set to take effect on October 1, 2026, and aims to enhance the governance and accountability of community land trusts in promoting affordable housing initiatives across Alabama.

Statutes affected:
Introduced: 11-40-12
Engrossed: 41-13-1
Enrolled: 41-13-1