Shared-Equity Homeownership: A Primer

Although it often requires a high initial investment to secure land and buildings, shared-equity homeownership "can lower costs in the long run by preserving a city's affordable housing stock in perpetuity," Benjamin Schneider writes. In a primer on two popular shared-equity models, Schneider discusses the history of community land trusts (CLTs) and housing cooperatives, and goes over several examples of how residents have fared. 

In the United States, CLTs own a total of about 15,000 home ownership units and 20,000 rental units. "By taking land off the real-estate market, they make the housing units they control permanently affordable. Community land trusts own the land upon which housing units are built, and sell or rent the units on top of it." Where they exist, CLTs tend to preserve some affordable options in gentrifying neighborhoods.

Co-ops are more of a mixed bag. "Since co-op tenants own the building, they can create rules that fit their needs, whether those are limited-equity agreements to keep units affordable, or arcane membership requirements that weed out the hoi polloi," Schneider writes. 

Still, shared-equity homeownership is very much the exception to the norm. And for that to change, new mechanisms for funding them must become more readily available.