One of the common arguments from those who are skeptical of shared-equity homeownership is that it's unfair to ask low-income people to give up their right to 100 percent of the appreciation of their home in exchange for the below-market price that got them into homeownership—specifically, that higher income homeowners would never accept such a deal.
Well, it turns out that's not quite true. Thanks to new higher downpayment requirements for jumbo loans, HousingWire reports that people buying homes in the half a million to a million dollar range are turning to companies that will front them half of the downpayment, in exchange for the rights to a substantial percentage of the appreciation when the home sells.
Now clearly, there are a few significant differences here from shared-equity homeownership. These homebuyers could afford a home, and indeed generally even the full downpayment, if they chose to do something like, as the article's example says, sell stocks or pull cash out of their business. There's no affordability being created or preserved anywhere along the way, just profit for a clever financial company. Certainly there's no community orientation, mission, or control.
But I think this trend should probably put to rest the patronizing idea that offering a contract that trades windfall upsides for homebuying assistance is an affront to low-income buyers.
(McMansion photo by Flickr user pluckytree, CC BY-ND.)