Community land trusts trace their conceptual history to India's gramdans where villages held property in the community interest, and to European and North American land banks, which are quasi-public agencies that invest in land often to help build family farms or to encourage economic development. "The ideas behind the community land trust...have historic roots" in the indigenous Americas, in pre-colonial Africa, and in ancient Chinese economic systems, as Robert Swann and his co-authors saw it in 1972. The introduction in their book, "The Community Land Trust: A Guide to a New Model of Land Tenure in America" continues, "...we can say the goal is to "restore" the land trust concept rather than initiate it." Residential land trusts emerged in the United States after calls among civil rights leaders in the 1950s and 1960s in the American South for economic reforms to reverse rampant poverty. An Institute for Community Economics was organized in the late 1960s to help residential trusts:

Gain control over local land use and reduce absentee ownership
Provide affordable housing for lower income residents in the community
Promote resident ownership and control of housing
Keep housing affordable for future residents
Capture the value of public investment for long-term community benefit
Build a strong base for community action
Residential community land trusts are now widespread in the United States, but seldom gain much notice beyond occasional local news accounts. The Institute for Community Economics in 2004 reported nearly 120 community land trusts of varied sizes in 30 states, the District of Columbia and in five Canadian provinces. While a few earlier trusts faltered, the number of land trusts in North America overall nearly tripled between the 1987 and 2004.

Community land trusts rely on community members, word of mouth and strategic communications to attract new residents, members and supporters. In residential land trusts, the CLT usually owns the land, leasing it long-term to the land user who owns the home and other improvements on the land. CLTs usually retain rights to buy buildings from residents who move out of the community. The goal of residential trusts is often to protect housing prices from real estate speculation and gentrification but to allow residents to accrue equity, including sweat equity.