The Stewardship Standards for Homeownership Programs was developed collaboratively by a number of national organizations, practitioners, and experts for the purpose of providing an educational resource and measurable framework to help homeownership programs with long-term affordability requirements achieve excellence and maximize impact. View Standards
Ensuring ongoing affordability of homeownership units is more challenging than rentals and requires attention to a wider range of issues.
Grounded Solutions Network led a yearlong process that engaged dozens of practitioners and several national homeownership organizations to create the Stewardship Standards* for Homeownership Programs that seek to preserve long-term affordability. The standards include more than 41 independent program elements and policies that participants believed were essential for successfully preserving long-term affordability. The standards also include resources, such as sample documents and templates to facilitate the adoption of best practices.
Ownership units require more active involvement, and property management companies do not offer the needed expertise for these activities. As a result, most cities with portfolios of inclusionary homeownership units have significant staffing dedicated to managing and monitoring those units.
NeighborWorks America and NCB Capital Impact reviewed the staffing levels among a wide range of affordable homeownership programs with long-term restrictions including many inclusionary housing programs.
They found that staffing levels varied significantly with small programs managing fewer than 100 units per employee and some larger programs overseeing 500 or more units per employee. Their report concluded that, “It seems prudent to plan on staffing at the level of one full-time staff person (or equivalent) focused exclusively on post-purchase monitoring and resale administration for every 150 to 300 affordable homeownership units”.*
Third Party Administrators
Many cities have turned to third-party administrators to assist with the tasks of monitoring and enforcing deed restrictions on homeownership units. These third-party partners are most often Community Land Trusts or other nonprofit organizations, but a number of private firms provide administrative services to dozens of local jurisdictions in New Jersey, for example.
Effective stewardship of affordable ownership units makes a big difference. The ongoing stewardship services provided by many shared equity programs (especially CLTs) have been shown to effectively preserve affordability over resales and to enable accessibility and sustainability of homeownership for lower-income residents.* National studies of CLTs found that lower-income owners of CLT homes were much less likely to be seriously delinquent or in foreclosure than conventional homeowners across all income levels.*
Recently, the availability of HomeKeeper, a Salesforce-based software tool developed by Grounded Solutions Network to help manage resale restricted homeownership units, has helped improve efficiency of both program implementation and portfolio management.
Setting Initial Prices
Setting the initial affordable home sales prices is slightly more complicated than setting affordable rents because it involves a number of additional assumptions to estimate the monthly housing costs. Continue reading
Marketing Homes to Eligible Buyers
As with pricing, many communities in the past left all marketing to developers, but the recent trend has been for cities to play an increasing role in marketing. Continue reading
Nearly all programs require some level of homebuyer education before applicants can purchase an affordable unit. Continue reading
Explaining Program Requirements
A growing number of programs are requiring potential homebuyers to complete an orientation that covers the program rules and carefully explains the resale price restrictions. Continue reading
All programs must screen applicants against the program eligibility criteria and manage a fair and transparent process for selecting from among many qualified applicants. Continue reading
Working with Lenders
Building affordable housing is only half the picture. If low-income buyers do not have access to appropriate mortgage financing, the program can’t succeed. Continue reading
Once homeownership units are sold, communities must provide some level of ongoing monitoring to ensure that they are owner occupied and are not sold outside of the program. Continue reading
Ensuring Homeownership Units Are Adequately Maintained
One of the most significant administrative challenges for many programs is ensuring that units are in good condition when they are sold. Continue reading
For inclusionary homeownership units, communities generally implement shared equity homeownership programs. These programs allow income qualified homebuyers to purchase units at below market prices, but the homes can be resold only to another lower-income buyer for no more than an affordable price set by a shared equity resale formula. Continue reading
Enforcing Program Requirements
Generally, jurisdictions with inclusionary housing requirements record a deed restriction, deed covenant, ground lease, or similar document against the title of the property in order to facilitate enforcement of affordability controls. Continue reading