1 / 19

An Alternative Vision for Affordable Housing: Mainstreaming a Third Tenure Option

Explore the Shared Equity Homeownership (SEH) sectoral approach for a sustainable, affordable housing solution. Learn about the tenure types, core components, and challenges to scaling up. Discover the benefits of SEH and strategies for mainstreaming this innovative option.

slater
Download Presentation

An Alternative Vision for Affordable Housing: Mainstreaming a Third Tenure Option

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. An Alternative Vision for Affordable Housing: Mainstreaming a Third Tenure Option Prepared for Affordable Housing: What’s Next Nationally and in Nashville Vanderbilt University March 2008 George McCarthy The Ford Foundation

  2. Starting points • Traditional, bifurcated housing market (owner/renter) does not adequately house the population • Viable alternatives are not part of unified approach to housing the population • We have not been entrepreneurial in identifying and growing a “third option”

  3. Solution • Shared Equity Homeownership (SEH): A sectoral approach to effective, permanently affordable housing • Ultimate goals: • A linked system of community-managed affordable & work force housing stocks • Establishing SEH as a superior alternative to fee-simple owning or renting

  4. Tenure types of SEH Sector • Deed restricted properties (DR) • Community Land Trusts (CLTs) • Cooperative ownership (COOPs) • Hybrid models: e.g. MH communities; EAH

  5. Core Components of SEH • Individual ownership and control of units • Permanent affordability—maintained through resale restrictions • Asset-building opportunities for owners: modest, but limited • Local stewardship of affordable housing

  6. Scale: The ultimate goal • Currently, less than 1% of nat’l housing stock is in SEH • Meanwhile: 69% H-O; 30% Rental • Where are we currently seeing prospects for reaching scale in SEH? • Irvine, CA (10,000 units in CLT) • Chicago (15,000 units in CLT) • DC (10,000 units in “CLT”) • NYC, DC, multifamily coops (~2-5%) • New Hampshire: ~20% of MH sector

  7. What will it take to reach scale? • 1500 CLTs with 10,000 units = 15MM units • Conversion of expiring tax credit and other multifamily to COOP or DR condos= 2.5+MM units • Deed-restricted HO units = 5+MM units • Half of MH parks converted to ROCs = 2+MM units

  8. Obstacles to scaling up • External: • Public acceptance • Market acceptance • Capacity of developers • Public sector support • Internal: • Standardization • Scalable approaches • Limited vision of practitioners • Philosophical/psychological

  9. What are we doing w/CLTs? • Acquisition strategies: • Subsidized • Debt financed • Cross-subsidized • Broader clientele served: • Not just affordable housing • Not just residential • Strong linkages b/t public sector and private market players • Better business models

  10. What are we doing w/DR? • Conversion strategies: • Using PLR from IRS, three LIHTC projects being converted to DR condos • New production: • Multiple jurisdictions using DR strategies to preserve affordable units built under IZ • Big challenges: • maintaining stock of DR units • stan

  11. Success key: Making SEH superior • Standardizing tools and processes that promote and grow SEH • Financial tools • Legal tools • Marketing • Leveraging opportunities provided by segmentation of market • Purchasing power • Political power • Example: CCA Global Partners

  12. CCA Global Partners • Started in 1984 as cooperative of 13 carpet retailers, grows to 200 w/sales of $800MM by 1990 • By 2004, support 3700 retailers, w/sales of $8.7BB in 15 different industries • Key—centralized provision of services for members: • Marketing, branding, warranty programs • Common operating systems • Access to health care, insurance, RE services • Training

  13. Lessons from CCA-GP • Success exhibited by growth, not survival • Success predicated on making partners more competitive w/in their context • Distinguishes, and elevates, alternative approaches within market • Manifests opportunities offered through growing collective enterprise

  14. Applying lessons to SEH • How do we make SEH more desirable than both fee simple homeownership and rental? By providing services to SEH members that are not available to other tenure choices: • Discounted insurance • Bulk heating fuel purchases • Maintenance assistance • Reduction in transaction costs/facilitation of mobility w/in network

  15. Exhibiting benefits of SEH • Benefits to individuals: • Asset accumulation • Better housing, amenities • Social benefits: • More effective use of subsidy • More housing created • Permanent use of subsidy • More successful families • More stable neighborhoods

  16. How do we do it? • Mainstream treatment of SEH at all levels—buyers, sellers, lenders, appraisers, secondary market; • Demonstration of scalability of SEH without the need for more subsidy; • Opportunistic action: a solution to foreclosure crisis.

  17. Desired Outcomes • SEH viewed as superior good, preferable to other housing types in performance; • Access to purchase and finance improved; • Public, and public sector, view SEH as desirable addition to local housing stock; • Broad participation by private sector

  18. What SEH Sector is doing • Leadership development: • NCB Capital Impact; CLT Network; Lincoln Land Institute; CFED; NHI • Systems development: • CoopMetrics; ROC USA • Resource development: sustainable, long-term funding • Partnership development • Outcome and impact measures

  19. Summing Up • We cannot rely on traditional methods of development to meet housing needs • We need to rethink the way we finance and subsidize affordable housing • A third tenure option, SEH, offers the best opportunity to: • Provide high quality affordable and workforce housing in all markets • Make responsible use of public subsidy • Re-engage a broad coalition of public and private sector actors to address local and national housing needs

More Related