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July 2008 - Shared Equity Homeownership

Photo courtesy of the Champlain Housing Trust

In the Toolbox

This issue of In Focus features shared equity homeownership – an innovative approach to homeownership designed to preserve the long-term affordability of homes with large public subsidies, even if surrounding property values rise. Shared equity homeownership works by pairing substantial downpayment or other assistance to a homebuyer with an agreement that the homebuyer will "share" any home price appreciation with the provider of the subsidy. Well-designed programs allow families to build assets while ensuring continued affordability for future homebuyers.

Among other applications, shared equity homeownership can help preserve the long-term affordability of homes located near public transit and job centers, ensuring that low- and moderate income families have ongoing access to locations that facilitate a reduction in car usage and transportation costs. For this reason, shared equity homeownership is one of Six Housing Policies for a World of High Energy Costs.
Click here for an analysis of other ways in which shared equity homeownership can be applied in a weak housing market.

While there are many forms of shared equity homeownership, the form most suited for preserving permanent affordability in these desirable locations is one in which the resale price of a home is permanently restricted by a formula intended to ensure its ongoing affordability. Examples of this approach include community land trusts, deed-restricted homeownership, and limited-equity cooperatives.

Learn more about shared equity homeownership

"Out Loud" Podcast's monthly Out Loud podcast series focuses on noteworthy housing policy solutions being implemented at the state and local levels. In this month's podcast we hear from Rick Jacobus, Partner at Burlington Associates, to give us a better understanding of how local governments can implement shared equity homeownership strategies to achieve permanent housing affordability, while still allowing for significant individual asset-building.

Special guest Connie Chavez, Executive Director of the Sawmill Community Land Trust in Albuquerque, NM, joins us to speak about Arbolera de Vida, a vibrant, mixed-use community with affordable housing built on a formerly vacant lot near downtown.

Listen to the podcast

Solutions in Action

Troy Gardens is a mixed-income, 30-unit homeownership development located near downtown Madison, WI, and developed by the Madison Area Community Land Trust (MACLT). Twenty of the homes at Troy Gardens are designated as permanently affordable to low to moderate income first-time homebuyers earning 65 percent of the county's area median income. MACLT maintains ownership of the land, reducing the purchase price of the home substantially. When homeowners of Troy Gardens sell their home, 75 percent of the appreciated value stays with the house, ensuring affordability for the next buyer while still offering homeowners a significant return on their initial investment.

In 2001, MACLT purchased a 31-acre property from the State of Wisconsin and reserved five acres to develop the homes, leasing the remaining 26 acres of land to a local conservation organization to protect as open space with walking trails and community gardens. The homes were built in accordance with the Wisconsin Green Built Home Program standards to reduce utility and long-term operating costs. They were also designed to provide universal access to residents with physical disabilities. A bus stop outside of Troy Gardens provides convenient access to downtown utilizing public transportation, and is well-connected to Madison's bike lane network.

Learn more about Troy Gardens

What's Your Story?

The August issue of In Focus will focus on efforts to preserve affordable rental housing, and we’re looking for examples of successful programs and initiatives from your community. Have you found a way to connect sellers of subsidized rental developments with buyers interested in maintaining affordability, or created an early warning system to enable identification of "hot" neighborhoods where rents for market-rate units are likely to increase dramatically? We want to hear about it! By sending in your examples, you will help us ensure that remains a timely and comprehensive resource for state and local decision-makers interested in expanding the availability of affordable homes.

Share your story!


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Featured Gallery Entry:

Cottages at Mattituck, Southold, NY

Photo courtesy of Community Development Corporation of Long Island


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.