Home Equity a Dilemma for Housing Programs
Decision makers involved in setting up affordable housing programs for low- and moderate-income home buyers face the dilemma of allowing families to benefit fully from the accumulation of equity in their home, which can appreciate quickly, or tapping that money when the home is sold so that it can be put back into programs to help fund homeownership opportunities for more households, according to speakers at a recent conference on inclusionary housing.
Held in Washington, D.C. earlier this month, The National Inclusionary Housing Conference was presented by the Innovative Housing Institute, the National Housing Conference and PolicyLink and underwritten by Fannie Mae, Freddie Mac, the Ford Foundation and the Annie E. Casey Foundation.
Those who focus on the affordable housing issue must address “whether you’re in a wealth-building strategy or a permanent affordability strategy, and whether those two can be reconciled,” said Raymond L. Kuniansky, Jr., chief operating officer of the Atlanta Neighborhood Development Partnership.
“You have to make a choice,” said Brad Lander, director of the Pratt Center for Community Development in New York. “You can have a limited equity program, so the family gets an affordable home but very modest wealth creation through equity. Or you can let the family accrue a larger share of the equity so the family enjoys more wealth creation [but the housing becomes less affordable.]"
“We have a whacked-out notion of public housing,” added Doug Shoemaker, deputy director of NPH, a non-profit housing advocacy organization in San Francisco. “We don’t want to ghettoize the poor. But I don’t see how putting families making $70,000 around other middle-income families is ghettoizing anything.”
The conference was designed to help communities that do not have an inclusionary housing program or ordinance create one, and to help those communities that do have such programs to make them more effective. Lander, Kunianski and Shoemaker were part of a panel discussion on building support for inclusionary housing.
“The conference took for granted the notion that inclusionary zoning programs are effective in adequately addressing affordable housing needs, and we disagree with that assumption,” said Debra Bassert, assistant staff vice president for land development policy NAHB.
“Too many local governments are passing inclusionary zoning ordinances that address the housing needs of just a small fraction of their citizens,” Bassert said. “They really need to respond to the housing affordability problem with a much broader array of policy options.”
For more information, e-mail Blake Smith at NAHB, or call him at 800-368-5242 x8583.