Association for Public Policy Analysis & Management

Following the 2008 U.S. housing market crash and subsequent foreclosures, Black and Latino communities were drained of trillions of dollars in household wealth. Today, American homeownership rates stand at an all-time low since the 1960s, causing concern about how minority families will continue to build wealth and what impacts the growing racial wealth divide might have on the greater economy. U.S. policymakers continue to grapple with ways to expand homeownership, but local practitioners are turning to Shared Equity Housing (SEH) as an alternative to traditional homeownership models. SEH is a risk-sharing homeownership strategy between local governments or nonprofit organizations and low-income families. By pairing public subsidies with resale restrictions, localities have created systems of perpetually affordable homes that prudentially utilize public funds. SEH models preserve housing affordability for generations and allow low-income, creditworthy homebuyers a foot in the door to traditional homeownership. U.S. demographic shifts show a growing minority population in desperate need of new and innovative approaches to sustainable, affordable homeownership. Federal legislators, this paper argues, must look to the future and consider SEH as a solution to the affordable housing conundrum that considers the changing needs of a more diverse America.