City of Lakes Community Land Trust (CLCLT), the third-largest land trust in the country, creates and preserves permanently affordable homeownership opportunities for low- to moderate-income Minneapolis households through the community land trust model. Over the course of two years, Ivanhoe Development’s work with CLCLT has shifted from primarily supporting the general operating grant pipeline toward program-specific asks, national funding opportunities, and consideration of diversified low-interest loan revenue. These new efforts raised a question that was difficult to pin down in CLCLT's budget line: what does each intervention actually cost? Ivanhoe began working with CLCLT leadership to develop a true program cost framework that moves beyond aggregate program expenses to identify the actual staff time and direct and indirect costs required for specific activities such as:
Bringing a homebuyer from application to closing
Delivering pre- and post- purchase homebuyer support
Rehabilitating a vacant property
Rehabilitating an occupied/existing home
Supporting a resale
Supporting single-family development
The Hurdle
CLCLT could readily identify many of the hard costs associated with property acquisition, construction, rehabilitation, and affordability subsidies. Much harder to see was the organizational cost of making those transactions happen. CLCLT's statement of functional expenses broke down activities across its various entities, but not across its programs. The operating budget grouped all program costs into a single program expense line. While this provided an accurate organization-level picture, it did not necessarily answer questions such as:
How many staff hours does one home purchase require?
How much more staff capacity does a vacant-home rehabilitation require than a standard buyer-initiated transaction?
What does it cost to provide education and counseling before a household ever reaches closing?
How much organizational infrastructure is required for each completed home?
The nature of CLCLT's work also means that not every home or household requires the same level of effort. A relatively straightforward homebuyer transaction may require one level of staff involvement. For example, a long-held vacant property requiring rehabilitation may require substantially more staff hours than an owner-occupied home. Homeowners experiencing financial or property challenges may require more intensive individualized support.
Without distinguishing those activities, CLCLT could calculate its total expenses but had less visibility into its cost per intervention. That created challenges when building program-specific grant budgets, determining whether proposed funding adequately covered delivery, advocating for “fully loaded” budgets with adequate administrative or operating support, forecasting the staffing implications of growth, evaluating new funding or financing opportunities, and answering the seemingly simple question: “What would it cost us to do 10 more of these?”
The Answer
Ivanhoe worked with CLCLT leadership to break broad programs into identifiable interventions. Rather than treating affordable homeownership as a single programmatic cost center, the team identified distinct units of work, such as rehabilitation of owner-occupied housing, rehabilitation of vacant homes, foreclosure management, new single-family development, pre-purchase and post-purchase homeowner support, and more.
From there, Ivanhoe and CLCLT began identifying the specific cost variables associated with each intervention, including hard capital costs, assessments and fees, and the more difficult-to-quantify cost of staff time.
In order to get the most accurate picture, the next phase of this work involves CLCLT sharpening assumptions around the actual cost of those variables. CLCLT will conduct a staff time study to determine which staff members participate in each intervention, the major tasks involved, how much time each activity requires, and how staff effort varies between relatively straightforward and more intensive cases. In parallel, CLCLT will finalize direct-cost assumptions and establish a methodology for allocating shared organizational expenses that enable program delivery. This step is critical to moving beyond direct expenses alone toward a fuller understanding of what each intervention actually costs the organization.
Once these variables are refined, CLCLT can apply a repeatable formula that combines direct property or program costs, staff time, and an appropriate share of organizational infrastructure to calculate a true cost per intervention. The resulting model will provide CLCLT with a practical baseline for understanding the resources required to deliver its work and can be updated over time as staffing, construction costs, program design, or service intensity change. This clear understanding of true program costs will give CLCLT a stronger foundation for pricing its work accurately, evaluating new financing opportunities, planning staffing and capacity, and advocating for the full organizational investment required to create and preserve permanently affordable homeownership.
Why True Program costs matter:
Understanding true program costs gives organizations clearer insight into their work that can answer key questions:
Funding adequacy: Does a grant, contract, or subsidy actually cover the work required?
Growth: What additional staffing and infrastructure would be required to scale?
Program design: Which activities require the most organizational capacity, and why?
Advocating for full costs: What is the appropriate request amount for a specific program or intervention with full indirect and operational costs?
The capacity to answer these questions becomes increasingly important as an organization grows and pursues larger, more sophisticated funding and financing opportunities.
