Sharing The Cost

An obstacle facing officials in the five East End towns as they begin a campaign to encourage support for a new Community Housing Fund, which would use a transfer tax to pay for affordable housing measures, is the perception that towns will try to simply build their way out of the crisis. Doing so would undermine the gains made via the Community Preservation Fund, which it’s patterned after, but which had a nearly opposite goal of limiting development and saving open space.

The two do not have to be incompatible. There’s little question that new construction is an element of the solution. But it doesn’t have to be the focus. In fact, a creative use of funds to help make existing stock more affordable can have a significant impact, and chart a long-term solution.

There are numerous programs to do that, including helping first-time homebuyers with down payments, but the most innovative and potentially impactful strategy involves “shared equity.” Southampton Town is focused on the idea, and it’s a sliding-scale solution that has many benefits.

There are details to work out — so many details — but the idea would be that the town would share ownership of a house with a potential buyer. Let’s say it’s a 50/50 split, though it can be any fractional breakdown. Suddenly, an $800,000 house is a more manageable $400,000, without the person selling it having to give up a dollar of value.

Delivered as a down payment, the money could help in two ways. When the property owner is ready to move on, or move up, they sell the house — and split the proceeds with the town. The benefits: affordable housing in various communities, almost invisibly; no new construction needed; no lost value of real estate; it can work at a variety of price points; it still offers a return on investment according to market values; and the repaid funds can recirculate and help more families.

One problem: It’s a very cost-intensive solution. But a transfer tax should provide a steady stream of revenue; the CPF, in fact, exceeded even the rosiest projections over its first two decades.

The affordable housing crisis is a comprehensive problem, and it will require a comprehensive solution. But perhaps it will help if, instead of picturing blocks of apartment buildings going up, the CHF can be sold on a more enticing vision: making the houses we see around us more affordable instead of increasingly unavailable.