Innovating Equitable Homeownership

Innovating Equitable Homeownership

Accessing housing that is safe and affordable continues to be a challenge throughout the United States, while historic discriminatory practices have amplified inequities in housing. In January 2023, the Terner Center for Housing Innovation at the University of California Berkeley, together with the Joint Center for Housing Studies of Harvard University and the National League of Cities, cohosted a symposium on housing supply innovation. One panel discussed how policymakers can increase the housing supply equitably, with speakers highlighting innovative programs that center racial justice and community empowerment while expanding affordable homeownership opportunities. Panelists included Joshua Morrison, creative director and co-founder of Frolic; Nikishka Iyengar, founder and chief ecosystem officer of The Guild; and Imani Yasin, director of strategic initiatives at Parity. The discussion was moderated by Chris Herbert, managing director of the Joint Center for Housing Studies.

Herbert pointed out that housing affordability encompasses several aspects, including low incomes and the high cost of new housing construction, but he framed the discussion for the panel on a third issue closely tied to equity and racial justice: ownership of the underlying land.

Pioneering Models of Equitable Development

The organizations that the panelists represented work in areas that vary in economic strength. Whereas Parity operates in historically disinvested neighborhoods in Baltimore, Frolic operates in high-cost Seattle. Nevertheless, each group’s mission is implementing innovative development models that promote equity and affordable homeownership.

In Atlanta, The Guild is building neighborhood wealth through a model of communal landownership that removes real estate from the speculative market. For its first project, The Guild purchased an abandoned 7,000-square-foot building in a disinvested but gentrifying neighborhood and renovated the structure to include 18 units of permanently affordable housing above a grocery store and coworking space. To ensure that the project returns economic value directly to community members, area residents can purchase shares in the housing trust created to own the building. These shareholders receive dividends from both the net operating income of the property and its appreciation.

Parity works in the West Baltimore neighborhood of Harlem Park, said Yasin, to create affordable homeownership units to advance social justice, racial equity, and civic engagement and to create wealth in a historically African-American and redlined neighborhood. By working on a block-by-block basis — in contrast to the more site-by-site approach that The Guild pursues — Parity hopes to demonstrate the feasibility of their model for transforming Baltimore’s underinvested neighborhoods at scale while promoting equity. For Yasin, rebuilding historically disinvested neighborhoods through affordable homeownership to the benefit of existing community members is important both for closing the racial wealth gap and for rewriting the dominant narratives about which places are worthy of investment and care.

In Seattle, Frolic focuses less on remediating neglect and disinvestment and more on confronting the challenge of high land costs and the consequent displacement of longtime residents. Morrison described how Frolic works with owners of single-family homes on lots that can be developed into cooperative multifamily housing. These homeowners essentially become investors in the new development, allowing them to realize some of the value gains associated with maximizing their lot’s development potential. At the same time, their projects add affordable homeownership opportunities in neighborhoods whose residents often experience displacement. Frolic’s cooperatives are made accessible through downpayments measured in tens of thousands of dollars rather than the hundreds of thousands of dollars typical for Seattle properties. By engaging with local community and neighborhood groups and producing designs sensitive to neighborhood context, Frolic has garnered support for their work from area residents, reported Morrison.

Striving for Scale

Each of these organizations is innovating their own model to change the dominant paradigm of landownership, wealth accumulation, and equity. Currently, both The Guild and Parity rely on philanthropic funding to support their work. Herbert identified the limits to scalability that a dependence on philanthropy poses in the long run, but panelists described their current work as being more about proving the workability and benefits of their models, which will eventually make the case for sustained public investment at scale. By contrast, said Morrison, Frolic aims to demonstrate the scalability of its model to attract traditional investment from financial institutions and commercial lenders rather than relying on government support. Other challenges are more immediate. Yasin, for example, cited the rise in construction costs over the past several years. In addition, says Yasin, scaling up and automating internal systems and processes are part of the growing pains for any expanding organization.

Equitable Development Builds Community

Fundamentally, panelists see their equity-focused work as nurturing community. For Iyengar, that means preventing the destabilization that gentrification introduces and supporting legacy residents, who may have generations of history in a neighborhood, while building solidarity with new residents. Iyengar argues that supporting the most marginalized and vulnerable members of the community enriches the community for everyone. Morrison believes that community also has a spatial and design component, so Frolic is ensuring that its projects provide equitable housing opportunities that meet people’s needs at all stages of life, thereby promoting effective intergenerational communities. By including communal spaces, Frolic is also tapping into a human need to live in contact with neighbors. Likewise, Yasin sees cultivating a sense of inclusion and belonging through care and attention as a core value in Parity’s work in West Baltimore.