Hanging on to affordable housing : an analysis of the mechanisms, processes & pitfalls of ownership-based affordability controls in Massachusetts

Abstract

While much attention has been paid to ways to help low and moderate income homebuyers buy their first homes, relatively little has been written about how those homes can be kept affordable for the next purchasers when the original owners move on. Although programs have become very successful at finding ways to make homeownership possible for households not served by the private market, the ultimate challenge is to devise workable strategies to maintain the affordability of those homes over time. This analysis will provide an overview of both the policy choices being made and the mechanisms being employed to protect Massachusetts' stock of affordable ownership housing. Through an examination of the ways in which ownership-based affordability restrictions are currently being designed, implemented, monitored, and enforced, under different programs and in different communities, this report will demonstrate ways in which the current system may fail to protect units from being "lost to the market" and will recommend measures which could be taken to make the system more failsafe. Only a few decades ago, housing activists did not think that it was possible to find a workable balance between restricting resale prices and maintaining affordability. Today thousands of families who are unable to become owners through the private market are accepting this trade-off when they decide to purchase restricted ownership units. This analysis focuses exclusively on what has been occurring in Massachusetts. While the concepts outlined in this report should be applicable to other programs in other parts of the country, there are a number of features of the Massachusetts affordable housing experience which are uniquely local.