|By Eileen Fitzgerald|
Chief Executive Officer
We certainly support alternative forms of homeownership, like shared equity and rent-to-own, as part of the strategy. Alternative homeownership models benefit people and communities. For generations, families with the resources to do so have lent money so their children can buy homes prior to inheriting wealth. This is an informal shared equity model which can overcome the inheritance gap. Formalized shared equity models or lease-to-own programs provide a way for people with less privileged social networks to achieve homeownership, and provide for long-term affordability, benefiting future generations. Done correctly these models not only provide an affordable homeownership option, they come along with education and support to make sure they are a sustainable arrangement for residents.
A number of NeighborWorks organizations have had success with shared equity and lease-to-own models. For instance, Durham Community Land Trustees and Champlain Housing Trust in Vermont have effectively used the land trust model to build homeownership opportunities for lower income families. Beyond Housing in St. Louis, Missouri has had success with its lease-to-own program.
There are new opportunities for scaling up nontraditional homeownership approaches that face challenges, but are worth exploring. Sometimes these strategies are resource intensive, so it is important to develop the organizational and external (legal, financing) infrastructure necessary for success. Local market conditions can also dictate what resources are needed to achieve success. For instance, one of the best places to use shared equity is a community with an inclusionary housing requirement, as is currently happening in an Austin, Texas program run by Habitat for Humanity. In those communities, little or no additional capital is needed to undertake the model.
In closing, we believe the best way to further community stabilization is through multiple strategies, which support many different forms of homeownership, as well as rental housing. All of those elements of a successful approach require flexible resources that can sustain plans tailored to the needs and resources available in each community.