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Preservation of Affordable Homeownership

This brief examines the range of policies communities use to preserve affordable homeownership opportunities over time while still building household wealth.

This Resource at a Glance

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  • There are opportunities to preserve the value of public subsidy while offering meaningful opportunities for individual asset accumulation.
  • Communities may want to consider different strategies based on market strength and programmatic goals.

In this 28-page policy brief, authors Rick Jacobus and Jeffrey Lubell outline a continuum of strategies for preserving affordable homeownership opportunities over time.

Many communities have learned the hard way that homes made affordable through an initial down-payment grant or other subsidy forgiveness model often become unaffordable when the property is sold to the next family. The amount of subsidy needed to make homeownership affordable for working families is growing exponentially; communities struggle with how to ensure that the public’s investments in homeownership keep pace with the market, while still allowing for homeowners to build wealth.

This brief provides an overview of the range of mechanisms that local governments use to ensure that housing funds invested in affordable homeownership today will continue to serve additional families into the future. In general, this is accomplished in one of two ways: 1) Below-market rate sales prices and resale restrictions that preserve the affordability of specific assisted units, or 2) Deferred loans that allow the locality to capture a portion of home price appreciation at the time the assisted units are sold.

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