Owning a home is associated with many benefits, but the recent foreclosure crisis has shown that many of our policies implemented to increase homeownership rates are not sustainable, and may have done more harm than good. Homeownership programs with long-term affordability controls present one potential solution.
These programs provide homeownership opportunities to income-eligible families who buy homes at below-market prices. The appreciation that can be earned by resellers is limited to preserve the homes' affordability at resale.
Results: Homebuyers earned competitive returns, but homes still remained affordable to lower income buyers over time. Homeownership under these programs was sustainable: there were very low delinquency and foreclosure rates and many families who sold their homes were able to use their sales' proceeds to purchase market-rate homes.
These reports present outcomes for seven shared equity programs:
- Champlain Housing Trust (CHT) – Burlington, Vermont;
- Northern Communities Land Trust (NCLT) – Duluth, Minnesota;
- Thistle Community Housing – Boulder, Colorado;
- Dos Pinos Housing Cooperative – Davis, California;
- Wildwood Park Towne Houses – Atlanta, Georgia;
- A Regional Coalition for Housing (ARCH) – eastern King County, Washington;
- San Francisco Citywide Inclusionary Affordable Housing Program.
Using client-level data reported by each of the programs, they analyze the following four issues:
- preserving affordability;
- personal wealth creation;
- security of tenure;
- mobility.
Balancing Affordability and Opportunity: An Evaluation of Affordable Homeownership Programs with Long-term Affordability Controls
Shared equity initiatives provide homeownership opportunities to income-eligible families who buy homes at below-market prices; the appreciation that can be earned by resellers is limited to preserve the homes' affordability at resale. This report analyzes affordability, personal wealth, security of tenure, and mobility outcomes for seven shared equity programs across the country. Homebuyers earned competitive returns, but homes remained affordable to lower income buyers over time. Homeownership under these programs was sustainable: there were very low delinquency and foreclosure rates and many families who sold their homes were able to use their sales' proceeds to purchase market-rate homes.
Shared Equity Homeownership Evaluation: Case Study of Thistle Community Housing
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner's potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the Thistle Community Housing's Community Land Trust, which operates in the Boulder, CO metropolitan area. Despite owners' high returns, Thistle homes saw an increase in affordability. Thistle has had almost no foreclosures in its history. And even though nearly all Thistle buyers were first-time homeowners, most resellers are able to purchase market-rate homes when leaving the program.
Shared Equity Homeownership Evaluation: Case Study of Dos Pinos Housing Cooperative
Shared equity homeownership initiatives provide below-market homeownership opportunities to families in return for a share of the owner's potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the Dos Pinos Housing Cooperative, which operates in Davis, CA. Dos Pinos does not allow mortgages, so resellers realized little gain in equity. But prices and monthly carrying charges increased slowly, meaning that Dos Pinos homes saw increases in affordability relative to incomes in the area. And almost none of Dos Pinos' owners have ever been delinquent on monthly carrying charges.
Shared Equity Homeownership Evaluation: Case Study of the San Francisco Citywide Inclusionary Affordable Housing Program
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner's potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the San Francisco Citywide Inclusionary Affordable Housing Program. Although there were several resale price formulas, most owners (all of whom were first-time homebuyers earned reasonable returns. And most homes saw only a small decrease in affordability over time (though real incomes were decreasing at the time in San Francisco).
Shared Equity Homeownership Evaluation: Case Study of Northern Communities Land Trust
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner’s potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the Northern Communities Land Trust (NCLT), which operates in Duluth, MN. NCLT owners realized high returns, but resold homes saw a modest decrease in affordability over time. Foreclosure rates for NCLT homes are below the area’s already-low average. And even though nearly all NCLT buyers were first-time homeowners, most resellers are able to purchase market-rate homes when leaving the program.
Shared Equity Homeownership Evaluation: Case Study of Wildwood Park Towne Houses
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner’s potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the Wildwood Park Towne Houses, a housing cooperative operating in Atlanta, GA. Despite owners’ high returns, Wildwood homes saw an increase in affordability. None of Wildwood’s owners, who had incomes well below area averages, had defaulted on their share loans. And resale restrictions did not appear to limit mobility, allowing owners to leave with the equity they had built in Wildwood.
Shared Equity Homeownership Evaluation: Case Study of A Regional Coalition for Housing (ARCH)
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner’s potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for A Regional Coalition for Housing (ARCH), which operates in eastern King County, WA. ARCH owners realized very high returns, but resold homes saw a decrease in affordability over time. Foreclosure rates for ARCH homes are well below the area’s already-low average. And resale restrictions did not appear to limit mobility, allowing owners to leave with the equity they had built in ARCH.
Shared Equity Homeownership Evaluation: Case Study of Champlain Housing Trust
Shared equity homeownership initiatives provide below-market homeownership opportunities to income-eligible families in return for a share of the owner’s potential capital gains at resale. This case study analyzes affordability, personal wealth, security of tenure, and mobility outcomes for the Champlain Housing Trust (CHT), which operates in the Burlington, VT metropolitan area. Despite owners’ high returns, CHT homes saw only a small decrease in affordability. Foreclosure rates for CHT homes are below the area’s already-low average. And even though nearly all CHT buyers were first-time homeowners, most resellers are able to purchase market-rate homes when leaving the program.
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