Shared Equity Homeownership: Meeting Demand and Preserving Supply

This article is part of The Rooftop, a blog and multimedia series from New America’s Future of Land and Housing program. Featuring insights from experts across diverse fields, the series is a home for bold ideas to improve housing in the United States and globally.

The housing affordability crisis has become one of the most overwhelming and urgent issues affecting communities across the country. One promising solution to these challenges is the shared equity homeownership model, as used in community land trusts (CLTs), limited-equity cooperatives, resident-owned communities, and deed-restricted housing.

At Grounded Solutions Network (GSN), where I work as national policy director, we champion these models and their use of resale restrictions to maintain affordability while allowing households to build wealth. For example, CLTs, as nonprofits that own land and sign ground leases with homebuyers, provide households all the benefits of ownership while also reasonably limiting how much of the home’s value appreciation they can walk away with if they sell, thus keeping the home affordable for the next household.

Grounded Solutions’ nationwide census of CLTs in 2022 found that the average amount of the appreciated value that homeowners kept was about 20 percent, or around $14,000. Research suggests that this is significantly greater than the amount of wealth households would have had if they had been renting for the same period of time. It can also ensure that the household buying the home will be purchasing that home substantially below its market value as required by the resale restrictions.

In addition to offering a demand-side solution to the housing affordability crisis, shared equity homeownership models create a positive multiplier effect for generational wealth. Each affordable owner-occupied unit created and stewarded by a shared equity program is preserved for generations of homeowners. Research indicates that the average length of a shared equity homeowner’s time in their home is six years, meaning that a new household is benefitting from that original subsidy every six or so years.

The individual benefits of shared equity homeownership are reflected in generational program-level impacts. The rental-to-ownership Homes for the Future initiative, from GSN’s Innovative Finance team, leverages private capital to grow the stock of affordable shared equity homeownership units. The below figure from GSN staff shows how a single subsidy at the initial sale for a three-bedroom home in the Atlanta metro area can quadruple its impact over 20 years. This subsidy can come in a variety of forms, including philanthropy, federal, state, or local subsidy funding, and donations of land.

The Housing Affordability Crisis

The current affordability crisis affects rental and owner households, and shared equity homeownership can provide benefits to both. To understand the scope of these benefits, it is important to first understand the nature of the crisis.

Recent data indicate that more renter households are cost-burdened by housing expenses than homeowners. The Joint Center for Housing Studies’ State of the Nation’s Housing 2025 report found that in 2023, the number of cost-burdened renters reached an all-time high of 22.6 million households, while the number of cost-burdened homeowners increased to 20.3 million.

While the count of households is similar for both, the percentages tells a starker story: In 2023, around 50 percent of renters were cost-burdened compared to less than 25 percent of homeowners, according to an analysis of American Community Survey data by the Congressional Research Service CRS.

Affordability is a significant problem for those looking to transition into homeownership, as the gap between actual median income and qualifying income—the income necessary to keep annual homeownership cost at 30 percent or less of annual income—widens. Data from the Federal Reserve Bank of Atlanta over the last 20 years shows how dire the trend is. Between 2020 and 2025, the gap between actual and qualifying incomes grew in 80 percent of the U.S. metropolitan areas tracked by the Federal Reserve Bank of Atlanta. Their most recent data shows that while coming out of 2023, the median U.S. household income is $80,000, the qualified income needed to afford a house is approaching $130,000.

Unsurprisingly, the distribution of ownership across various demographics is very uneven across income. In 2023, according to the CRS report of American Community Survey data, only 25 percent of adults earning less than $50,000 owned their homes, but this percentage increases as folks earn more: 84 percent of households earning over $100,000 own their homes.

Moving from renting to owning is difficult for households struggling with high cost burdens, as half of renters currently are, according to State of the Nation’s Housing 2025. Tight budgets leave little or no room to save for a downpayment even if a household’s income is enough to qualify for a loan.

Developing CLTs in the Places that Could Most Benefit

Two points are clear about financial hurdles to homeownership. First, housing cost burden tends to be higher for renters and contributes to their inability to purchase a home. Second, the affordability gap for homeownership has been steadily growing relative to income, without taking into account the limited resources available to renters.

Shared equity homeownership models can mitigate both of these challenges by providing an accessible pathway to ownership while helping to bridge the expanding gap between income and home prices. But where are the households that would most benefit from the subsidized sales price and stable housing costs? Renters experiencing particularly high cost burdens would see huge benefits from transitioning to homeownership, and renters making between 50 and 80 percent of area median income (AMI) are the households that earn enough income to qualify for a mortgage and meet the income restrictions for most homeownership subsidies (often 80 percent AMI or below).

To see where CLTs would most benefit the renter population, I combined data on housing cost burden by tenure with the percentage of AMI. For this analysis, I used data from PolicyMap on the percentage of renter and owner households that are housing cost-burdened (paying greater than 30 percent of household income). Next, I used the Comprehensive Housing Affordability Strategy dataset from the U.S. Department of Housing and Urban Development (HUD) to identify the number of renter households earning 50 to 80 percent of HUD Area Median Family Income (HAMFI).

I identified census tracts in which renters are more cost-burdened than owners, and in which there are relatively high percentages of low- and very low-income families—specifically, where more than 30 percent of all households were earning 50 to 80 percent of HAMFI. This yielded just over 14,000 census tracts, or 16.5 percent of all the census tracts across the country.

There are currently over 300 active CLTs and other shared equity homeownership programs in the United States. While this analysis does not reflect current or future plans to develop new CLTs, it usefully showed the distribution of those census tracts across three metropolitan areas: Baltimore-Columbia-Towson in Maryland, Dallas-Fort Worth in Texas, and Denver in Colorado.

Next Steps

How do we achieve a greater scale for shared equity homeownership in these areas? This analysis might make you think about the households in your own community that could benefit from the stabilization and wealth creation shared equity provides. While there are barriers, there are also opportunities to grow these models.

Like many strategies for addressing affordability that go beyond reliance on private markets, shared equity homeownership models require external support to be successful. Some aspects of this can be reduced to the simple (and universal) need for funding, from property acquisition to daily operations. However, the context for these programs is just as important. Shared equity homeownership can struggle without a supportive environment made up of financial institutions familiar with the models and policymakers who understand their particular needs.

Fortunately, there are a growing number of entities that see the benefits provided by shared equity homeownership and are helping to build this environment. For example, several state-level programs support shared equity housing. Minnesota Housing, the state’s housing finance agency, has provided significant support to community land trusts through their Community Initiatives Support Fund.

Another story of state-level support is the Illinois legislature’s Community Land Trust Task Force, created in 2023 and renewed in 2025, has a mandate to explore how findings from a report on CLTs in Illinois can be put into practice. The Colorado legislature recently created the Drive It Home program, which is a collaboration between the Colorado Housing and Finance Authority and the state treasurer to provide below-market loans for the construction and purchase of affordable owner-occupied units .

Finance capital can also play a role in growing the sector, especially through innovative deployment of mission-drive investment. Detailed mapping that shows where renter populations could most benefit from shared equity homeownership models is a first step to bring this supportive environment to such places.

Editor’s note: The views expressed in the articles on The Rooftop are those of the authors alone and do not necessarily reflect the opinions or policy positions of New America.