No Time for Timidity

Shelterforce Magazine

BY JOHN DAVIS: Better than what? Better than putting precious public dollars into subsidizing affordability that is quickly lost on the first resale. Better than putting precarious people into aging houses they can barely improve or reliably maintain. Better than homeownership that predictably fails for half the families of modest means who are boosted into this favored form of tenure for the very first time.

For many people, in many places, shared equity homeownership is simply a sweeter deal and safer investment than buying a home on the open market. Yet few of us who work with community land trusts (CLTs), limited equity cooperatives (LECs), or inclusionary housing programs mandating long-term affordability are accustomed to trumpeting the superiority of the housing we provide; nor are we comfortable pointing fingers at the spectacle of our kingly competitor strolling naked through the streets, confident that his is the only path to the American Dream.

Such bashfulness does little to advance our cause.

We dress our own advantages in the plainest of clothes, while averting our eyes from the shortcomings of market-rate homeownership, allowing it to escape the sort of critical scrutiny that is our daily fare.

One example: proponents of shared equity homeownership are regularly and reasonably asked to defend the ceiling they impose on the resale price of their housing. Doesn’t this mean, ask our critics, that low-income people who resell during an overheated real estate market will be prevented from building wealth? It’s a fair question and one that is easily answered, since there is a body of evidence showing that the owners of shared equity homes typically realize a significant return on their initial investment.

But turn this around.

When was the last time you heard anyone ask the bankers, developers, realtors, or public officials who shill for market-rate homeownership to defend their privileged form of tenure? Doesn’t the lack of a floor beneath the equity and security of those who own market-rate homes (or, more accurately, the absence of a watchful steward providing a durable safety net) mean that low-income people are constantly at risk of losing what little wealth they have in housing that is theirs should the economy turn cold–perhaps to the point of losing their homes?

You might think the tsunami of mortgage foreclosures over the past few years would have humbled the proponents of market-rate homeownership. Conversely, you might think that minuscule rates of default and foreclosure among the owners of resale-restricted homes would have emboldened the champions of shared equity homeownership. You’d be wrong, on both counts.

When one has ruled the roost so long, humility comes hard.

With so many people praising your fitness and finery–and so many admirers making money from developing, financing, and selling market-rate homes (not to mention wildly speculating on mortgage derivatives)–any criticism of this tenure’s vulnerability is unlikely to lead to a lot of soul searching. Rather than questioning the way that millions of foreclosed homes were owned, it’s simpler to deflect all attention and blame onto the way these homes were financed.

The diffidence of those who promote alternatives to market-rate homeownership is understandable as well. When you’ve been a supplicant so long, begging crumbs from the king’s table, it’s not easy to begin crowing about the stellar performance of your CLT, LEC, or any other form of resale-restricted homeownership. And when the system through which your homes are subsidized, financed, regulated, and taxed is rigged heavily in favor of your main competitor, you are hardly inclined to voice either praise for the former or criticism of the latter.

But silence is not our friend.

The best chance we have of ever changing that system is to make more noise. Shared equity homeownership cannot slump shyly in the corner like some poor relative at a family reunion of high rollers. When it outperforms its market-rate cousins, as it often does–preserving affordability and protecting subsidies in hot markets; preventing deferred maintenance, defaults, and foreclosures in cold markets–it must say so, loudly and proudly. Shared equity homeownership will only attract the public and private resources it needs to “go to scale” if it attracts more attention to itself. Instead of begging to be seen as something almost as good as conventional forms of tenure, shared equity homeownership needs to be bragging about the ways it is better. If you’ve got it, flaunt it. This is no time for timidity.