Region Forward Blog

Securing Long Term Affordable Homeownership Opportunities with Shared Equity

Nov 5, 2013
Chris Anderson of Montgomery County Department of Housing and Community Affairs & Elizabeth Oo of the Urban Institute at our event.


As 1.5 million people are set to move into the Washington region by 2040 affordable housing will become critical for maintaining an educated middle class workforce. Shared equity homeownership is a tool that local governments can use that allows homes to remain affordable to middle and lower income households on a long-term basis. It does this by preserving affordable housing in areas where rising prices are forcing lower income households out of the market such as in the high cost Washington region and by limiting the appreciation that the owner can retain.

How can this happen? Shared equity takes place when a local government or a nonprofit organization invests in local properties in order to ensure that they will be affordable for middle income and lower income workers. This means if the home value rises in an affordable unit the local government or non-profit developer that sponsored the homebuyer will retain some value and apply it toward future affordable housing. This partnership between buyers and sponsors helps create new homeowners who gain equity and keeps homes affordable for the long-term by passing on the benefit of the public investment when selling the home.

One study conducted by NCB Capital Impact found that nationwide only 47 percent of low-income homebuyers still owned their homes five years after purchase. In shared equity homeownership programs however more than 90 percent of low income homebuyers were still owners after five years.

The Metropolitan Washington Council of Governments held a workshop on Thursday October 31st for area affordable housing practitioners from local governments non-profits and developers on implementing shared equity homeownership programs. The workshop discussion was led by Anne Geggie from NCB Capital Impact and co-sponsored by the Coalition for Smarter Growth.

The participants reviewed pricing and resale models and were able to gain a greater depth of knowledge regarding the different ways in which to implement a shared equity program. A number of participants who are COG members already implement shared equity homeownership programs and COG will look for additional opportunities to share these affordable housing strategies and bring stakeholders together to focus on regional housing needs.

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