|
Do shared equity homeownership programs help generate significant wealth for families? A new study led by a team of researchers from the University of Washington and University of California at Berkeley – and supported by Grounded Solutions Network – addresses this common inquiry asked by many advocates, housing practitioners, and prospective shared-equity homeowners. The research team employed the most rigorous method to date to quantify home equity gains for over 1,100 families who previously resided in shared-equity programs (majority of which are community land trusts) and compared these gains to wealth accumulated by homeowners in market-rate homes and renters with similar demographic and economic status during the same period of time. The comparison was achieved using data from the HomeKeeper National Data Hub. HomeKeeper, a program of Grounded Solutions Network and Salesforce app, is a program management tool that not only facilitates daily operations for over a hundred shared equity homeownership and housing counseling programs, but also collects and aggregates critical information that allows performance monitoring and outcome evaluation.
The study finds that shared-equity homeowners experienced a median net home equity gain of $1,658 per year. This amount is substantially higher than the $100 in median annual wealth gain of similar renters. In addition, while it is less than the $2,080 in median annual housing wealth gain accumulated by similar owners, this discrepancy is not statistically different.
To put the finding into perspective, the estimated amount of housing wealth built by shared-equity families is more than 1.5 times the median net worth of renters ($6,000 as of 2019) and represents an amount sufficient to put a 5% down payment on a $200,000 house. The study demonstrates that shared equity homeownership programs can be an effective wealth-building tool, particularly among low- and moderate-income households who often have limited access to other homeownership opportunities.
This study was published by the academic journal Housing Policy Debate
|
