Shared equity housing (SEH) strategies seek to establish lasting affordability, create community control, and build wealth for people with limited incomes. While the practice of shared equity housing is flexible and context-dependent, programs often achieve these outcomes by limiting the sale or rental price of homes in their portfolios, requiring the sharing of home appreciation gains, and providing homeownership assistance to program residents. Residents and community members build community control by participating in governance of shared equity housing organizations through democratic decision-making and/or cooperative ownership structures. In this way, SEH organizations steward land and keep housing affordable for the long-term benefit of a community, rather than seeking profits for the short-term benefit of individual owners or investor shareholders.

It is impossible to reduce shared equity housing to a single purpose. Rather, practitioners and scholars see diverse benefits in shared equity models. These rationales include community autonomy and self-determination, efficient use of public resources, displacement prevention, and wealth building for both individuals and communities.4 While these are all vital threads in the shared equity field, growing attention from policymakers, researchers, and nonprofits today in part reflects increased concern about the state of affordable housing and homeownership across the country. Racial inequities in homeownership, low homeownership rates, and high housing-cost-to-income ratios are some of the issues prompting exploration of shared equity as a new way to expand and preserve access to stable housing and homeownership.

Homeownership has long been the cornerstone of housing policy in the U.S. The mortgage interest deduction for homeowners remains the federal government’s largest housing subsidy, despite several changes in the 2017 Tax Cuts and Jobs Act, including reductions in the size of eligible mortgages.5 This policy emphasis on homeownership in part reflects widely held assumptions about the benefits of owning one’s home. Among these presumed benefits, wealth-building through house price appreciation and increased residential stability have the strongest basis in empirical research. Other benefits of homeownership for which there is empirical evidence include improved educational attainment, future earnings, behavioral outcomes for youth, and positive effects for neighborhood health and stability.6 As discussed below in section II.A, shared equity housing may be positioned to expand access to these anticipated benefits of homeownership by making homeownership affordable to a broader set of households.