Shared equity housing: Maintaining neighborhood standards
One of the most exciting parts of buying a house is learning about the neighborhood you’re joining. The architectural style of the homes, how people tend to their yards, the local schools and closest eats can all contribute to a neighborhood’s charm – and housing prices.
A healthy housing market has neighborhoods with homes that vary in size and price. Ideally, there is plenty of stock available at affordable prices for first-time buyers and also larger homes for families to settle into later in life. But that’s not always how things shake out. Sometimes, prices can rise dramatically quickly, which changes the entire fabric of the neighborhood.
Why wouldn’t you want values to rise in your neighborhood?
That’s a fair question. At United Housing, we talk a lot about a house and property as an investment that appreciates in value over time. We DO want your investment to grow. But when property prices grow exponentially in a short period of time, it can hurt overall affordability. Your annual taxes could rise, increasing your monthly mortgage, sometimes substantially. It’s better for home prices to rise incrementally over the course of several years, allowing you opportunity to advance in your career, increase your earnings and feel comfortable with potential tax increases.
Is there anything I can do about rising prices in my neighborhood?
Yes! Neighborhoods around the country are investing in shared equity housing. That’s a complicated way to say that neighbors are pooling resources to manage property ownership and sales in their communities. When neighbors take on properties and sell them, they can set terms, manage overall prices, maintain the charm of the property and most importantly, keep outside investors out of the neighborhood.
In Memphis, one great example of this is Binghampton Community Land Trust. Recently, they bought a house in their neighborhood that was in pretty bad shape – the roof was caving in, and it was an eyesore. They razed the property with the help of United Housing, and built a new, affordable home in its place. They were able to sell the home to a local family, recoup their investment plus some, and maintain the property value in the process! Now, they can seek another property to do the same thing with in the future. What’s so cool about this opportunity is that it beautifies the neighborhood, provides an affordable housing opportunity for a family, and strengthens the community without pricing people out of their homes.
Community land trusts are only one type of shared equity housing. Recently, the Tennessee Housing Development Agency shared information about other options for communities across the state. If you’d like to learn more about shared equity or about housing preservation in general, the team at United Housing would be happy to chat! Give us a call today at 901-272-1122.
