Lasting Affordability in Housing Now: Our Path to Racial Equity

August 26, 2020 - (5 min read)

A lot has been said and written about this incredibly pivotal moment in the racial justice progress of our nation. However, one essential question remains to be answered: Will we all finally acknowledge and face the consequences of systemic racial injustice and make an intentional shift toward a more just and equitable society?

The recent painful loss of Congressman John Lewis only further highlights the urgency of our collective progress along the arc of the moral universe. His inspiring legacy of “good trouble” includes his leadership in not only achieving voting rights protections, but also advancing human rights in the creation of a new model of land tenure for African Americans as a specific strategy of the Civil Rights Movement.

In September 1968, following the assassination of Dr. Martin Luther King in April that same year, a group of eight progressive national leaders met in Atlanta, Georgia, to draft a plan for a unique new nonprofit organization that came to be called New Communities, Inc. The group included representatives from the Federation of Southern Cooperatives, Southern Christian Leadership Conference, National Sharecroppers Fund, Institute for Community Economics and others.

The purpose of the new organization was to help Black farming families in the South achieve community control of land—preventing their violent involuntary displacement by eviction from their farms and homes, which was often done in direct retaliation for exercising their legally fundamental right as Americans to vote.

New Communities, Inc. still operates proudly today in Albany, Georgia, as a thriving example of the Community Land Trust (CLT) model, first established in 1969 by Black leaders in the rural south. The detailed origin story of that heroic struggle is well documented in the 2016 documentary film Arc of Justice.

Today, just over 50 years later, use of the nonprofit model has evolved and expanded to include more than 250 CLT organizations in 46 states. These organizations focus largely on providing affordable housing for low- and moderate-income families in a wide variety of urban, suburban and rural communities.

Our national nonprofit intermediary, Grounded Solutions Network, directly supports CLTs and many other similar shared equity housing programs across the nation, which collectively control approximately 255,000 perpetually affordable homes. Shared equity homeownership (SEH) is a self-sustaining model that uses a one-time public investment to make a home affordable for a lower-income family. The model restricts the home’s sale price each time it is sold to keep it affordable for subsequent low-income families who purchase the same home.

SEH programs balance wealth building for families who would otherwise be unable to afford owning a home with preserving the initial public investment. Unlike traditional affordable-housing policies and programs that have specific affordability term limits and often eventually convert to market pricing, the result of SEH is a form of “lasting affordability” — the currently missing essential ingredient in solving our dire massive trilemma of housing, economic and health-crisis events.

Lasting affordability using shared equity homeownership models can close the growing racial wealth gap — counteracting our history of exclusionary public policies that have resulted in a typical white family’s net worth being nearly 10 times greater than that of the typical Black family.

A 2019 study, “Tracking Growth and Evaluating Performance of Shared Equity Homeownership Programs During Housing Market Fluctuations,” which evaluated 58 SEH programs controlling over 4,000 homes, proves that SEH models promote sustainable wealth-building opportunities and lasting affordability for lower-income households.

The study found that the share of households of color served by the same 4,000-unit sample grew from just 13% (during 1985–2000) to 43% (during 2013–2018). Documented levels of wealth creation by the sample households indicate the median household accumulated $14,000 upon selling their home, typically over a five- to seven-year period, while those same households made a median initial investment of only $1,875 for the initial purchase of their SEH home. Additionally, 60% of SEH families who sold their homes to another income-qualified household went on to purchase a traditional home at market rate.

Through SEH, stable affordable homeownership continues to be attainable over time for ever more families who will all gain the benefits of upward economic mobility and wealth building.

As our nation responds and recovers from the dire health and economic consequences of the COVID-19 global pandemic, local, state and national leaders must all commit to achieving positive racial equity impacts. We must seize this unanticipated tragic situation as an opportunity to achieve just outcomes. This demands an inclusive community decision-making process for interventions that will be planned and launched to benefit communities of color in the coming months and years ahead.

Grounded Solutions Network and our over 200 current members have committed to a vision for rapidly expanding the scale of housing with lasting affordability by achieving at least 1 million new homes over the next decade. This vision for “Lasting Affordability Now: Our Path to Racial Equity,” requires strong support from a variety of partners who can summon the collective political action needed to secure and focus a variety of government, philanthropic and private-sector resources.

We encourage advocates who share both our values and affordable-housing vision for racial equity to formally join our network today. Only then can Grounded Solutions effectively support greater production and stewardship capacities within community-based organizations and local governments. Together, we can produce even more homes with lasting affordability at the regional scale required to further bend the arc of our nation’s moral universe toward justice.

This blog post is part of Building Equitable Communities, a series from the National League of Cities and Citi. This series will explore how community land trusts create lasting affordability in housing and how worker cooperatives can build wealth and create quality jobs.


About the Author

Tony PickettTony Pickett is the Chief Executive Officer with Grounded Solutions Network.