Is it fair to homeowners to limit their appreciation?

Shared equity homeownership programs maintain affordability by limiting the extent to which homeowners can profit from rising home prices. This limitation strikes some people as unfair.  Why should low-income home buyers face such limits when others earn unlimited appreciation? Others feel that when the public invests scarce resources to help a family attain homeownership, letting that family retain all the profit from the public investment is unfair to all the other families who did not receive asistance. Shared equity homeownership programs offer a middle ground that allows buyers to earn real wealth and experience all of the other benefits of ownership but also allow today’s public investment to serve one family after another.

For homebuyers without the ability to afford market rate home prices, the benefits of this approach outweigh the drawbacks. Such benefits are fixed and sustainable housing costs, mortgage interest deductions and, most important to many, a place to call home that allows homeowners freedom and control over living space. In terms of public subsidies, by limiting appreciation the public portion of the resale stays with the home allowing more low income families to benefit from homeownership.

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