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In Focus

September 2009 - Shared Equity Homeownership and Asset Building

Courtesy of Potterhill Homes

In the Toolbox

This issue of In Focus highlights shared equity homeownership and its role in helping families build assets. "Shared equity homeownership" programs provide assistance to help bring homeownership within reach of low- or moderate-income families. In return for this assistance, participating homeowners agree to share the benefits of future home price appreciation in a way that helps preserve affordability to future buyers. These programs allow communities to use a single investment in affordability to provide affordable homeownership opportunities to one generation of homebuyers after another.

Because shared equity homeownership programs often achieve durable affordability by limiting the price at which owners can sell their homes, they generally offer homeowners more limited wealth creation than traditional homeownership. However, well-designed programs can, in fact, offer significant asset building opportunities while providing a more stable form of homeownership for low- and moderate-income families. Still, in many communities that have considered investing in shared equity homeownership, the limitation on owners’ wealth creation has been a source of some debate.

The new Center for Housing Policy report, Balancing Durable Affordability and Wealth Creation: Responding to Concerns about Shared Equity Homeownership, explores the potential of shared equity homeownership to balance long-term affordability and asset-building objectives, and how communities have responded to concerns over limiting families’ wealth creation opportunities. The report provides an overview of some of the ideas and strategies shared at an October 2008 convening held by the Annie E. Casey Foundation. This event brought a group of shared equity homeownership practitioners together with leaders from the asset building field to consider the issues involved in balancing durable affordability and wealth creation.

Learn More about Shared Equity Homeownership

"Out Loud" Podcast

This month’s Out Loud podcast features the audio recording from the July 30th Live at the Forum event with Rick Jacobus of Burlington Associates in Community Development and Barbara Lightsy of City of Lakes Community Land Trust. They spoke about the new Center for Housing Policy report Balancing Durable Affordability and Wealth Creation: Responding to Concerns about Shared Equity Homeownership. Join the conversation and read the Q&A!

Live at the Forum events highlight the latest reports, programs or policy developments related to affordable housing policy in a two-part format. First, guest speakers participate in a conference call in which they provide an overview of new research or innovative policies. Following the conference call, listeners can log-in to the Forum to pose questions about the audio presentation and get real-time answers from the guest speakers.

Listen to the Podcast!

Solutions in Action

Between 2006 and 2008, the city of Minneapolis allocated $10 million in funds raised through tax increment financing, to city neighborhoods for affordable housing production. City neighborhood councils, such as the Fulton Neighborhood Association (FNA), had the discretion to use the funds as they saw toward this purpose. The City of Lakes Community Land Trust (CLCLT), a provider of permanently affordable homeownership in the Minneapolis-St. Paul area, reached out to the FNA to inform them about the community land trust model as a way to promote greater housing affordability.

Initially, the FNA expressed concerns about whether low- and moderate-income families would be able to afford and maintain homeownership, whether CLCLT homeowners would be good neighbors, and the costs of supporting this type of affordable homeownership.

In response to this, CLCLT developed a comprehensive outreach strategy to work with the FNA and gain members’ support and trust. As part of their strategy, the CLCLT invited current land trust homeowners speak directly to the neighborhood association about their experiences working with and purchasing a home through the CLCLT. The strategy worked and the FNA released $150,000 to support three families in purchasing community land trust homes. Because CLCLT's outreach proved so effective,they hired one of their own land trust homeowners as a full-time Outreach Coordinator. The Outreach coordinator serves as a spokesperson for the CLCLT, establishing and maintaining relationships with CLCLT homeowners and related community groups.

Learn More about the City of Lakes Community Land Trust

New Report Outlines and Clarifies the Different Types of "Shared Equity" and "Shared Appreciation" Homeownership Programs

Sometimes, the same term is used to describe very different products or services. This appears to be the case with the term "shared equity homeownership," as well as the related term "shared appreciation homeownership." To help bring greater clarity to this emerging field, the Center for Housing Policy has released the report What’s in a Name? Clarifying the Different Forms and Policy Objectives of “Shared Equity” and “Shared Appreciation” Homeownership Programs. This report seeks to clarify the overall characteristics of shared equity / shared appreciation homeownership models and identify the distinguishing characteristics of the multiple programs. The report also seeks to show how the different programs fulfill somewhat different housing policy objectives.

Read the Report

Share Your Story

Do you have shared equity homeownership programs in your community? Are you curious about where the initial subsidies to purchase land for shared equity homeownership units come from? Are you interested in how community concerns about shared equity homeownership have been addressed? Join the Shared Equity Homeownership discussion group on the Forum to add your own questions and share your experiences with fellow housing practitioners across the country.

The Forum features interactive discussion groups organized around key policy areas,
Rental Housing Preservation, Inclusionary Zoning, Foreclosure Prevention, Neighborhood Stabilization, and Affordable Housing, and is a place to pose questions, exchange ideas, and learn from the experience and expertise of others.

Visit the Forum to Share Your Story!


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Featured Gallery Entry:
Mills of Carthage, Cincinnati, OH

Photo courtesy of Potterhill Homes


July 2009 - In Focus: Post-Conference Edition
April 2009 - In Focus: Learning Conference
March 2009- In Focus: Neighborhood Stabilization
December 2008- In Focus: Neighborhood Stabilization
November 2008-- In Focus: Neighborhood Stabilization
October 2008-- In Focus: Transit-Oriented Development
September 2008-- In Focus: Inclusionary Zoning
August 2008 -- In Focus: Rental Housing Preservation
July 2008-- In Focus: Shared Equity Homeownership
June 2008 -- In Focus: Green Affordable Housing -- This issue of In Focus kicked off a series of Six Housing Policies for a World of High Energy Costs
May 2008 -- In Focus: Foreclosure Prevention
April 2008 -- In Focus: Employer-Assisted Housing
February 2008
-- was launched in January 2008 as part of Housing Solutions Week. Click here to view materials from the week.