Although it doesn’t get many headlines, housing affordability is quickly becoming one of the defining challenges of our time, and there are numerous causes. Americans are moving back into cities that are already housing-challenged. Efficient financing isn’t available for many middle-class Americans, who are often pushed further away from job centers. Local policies and regulations make it very difficult to build moderate priced or affordable housing. And construction costs continue to rise, making economics for new development in infill locations extremely difficult.
Though these challenges are significant, they are solvable. And perhaps most importantly, both the public and private sectors are stepping up to solve the crisis. In 2018, Utah’s largest home builder, Ivory Homes, was the driving force behind the creation of the Ivory Prize for Housing Affordability. The Ivory Prize awards both private and public sector entities that have developed ambitious, feasible and scalable solutions to housing affordability in communities across the U.S.
The inaugural Ivory Prize competition, which drew over 120 applicants from 28 states and the District of Columbia, recognized entities on the front lines of the fight for affordable housing. Important steps taken have included modular construction methods that reduce the time and expense of housing development, innovative financing models that help more people achieve home ownership and critical reforms that opened more housing for more people in fast-growing Austin, Texas.
Chicago-based Home Partners of America is honored to be a 2019 winner for finance, joining an impressive group of housing innovators.
How are we trying to help solve our housing challenges? Founded in the aftermath of the Great Recession, Home Partners of America’s unique lease-purchase approach makes living in a single-family home more accessible for people who aren’t ready or able to purchase a home. We provide our customers transparency, choice and flexibility. Our residents work with a real estate agent of their choice to find a home listed for sale that best matches their needs. The rental costs are listed on our website and the purchase right is directly tied to the cash cost of the home. A resident only signs a one-year lease, which can be extended at their option for an additional two to four years. They have the right to purchase the home at any point during their residency or the ability move out with no penalty at the end of each one-year lease term. We are trying to help match consumers, who are not ready to purchase a home, with the best housing that fits their family’s needs.
Our approach allows the household to budget and plan for the future and control their home, for at least a five-year period. We create an additional supply of rental properties in good neighborhoods, which are often lacking in more affordable options. We try to make sure families are moving into a home they can afford and regardless of whether they ultimately opt to buy the house, they are providing a better future and quality of life for their children.
Operating primarily in 10 major markets in the U.S. and active in 41 metro markets, Home Partners of America has helped 15,000 families get access to housing, and over 1,000 of those have already purchased homes. In 2020, we want to accelerate our growth and double the number of families that we help each year.
Of course, we are not the only solution. At a recent Ivory Prize event at Harvard University’s Joint Center for Housing Studies, I was joined by two other companies making it easier for lower and middle-income families to purchase homes. Landed Homes takes a shared equity approach to assist essential professionals – primarily educators – purchase homes in high-cost areas across the country. Hurry Home uses a similar rent-to-own program to create access to affordable housing in South Bend, Indiana.
What’s the next big thing in housing affordability? The 2020 Ivory Prize competition seeks visionaries who are already doing their part to make housing more affordable. Applications are open through December 15, with both finalists and winners announced in early 2020. You can learn more at www.ivory-innovations.org. We look forward to learning how others are addressing housing affordability in their communities and across the country.
Solving the housing affordability crisis may sound daunting, but it’s a challenge that can and must be met. Home Partners of America is committed to working with other companies and organizations that are already stepping up to meet this challenge. Now it’s time to learn lessons from our progress and scale these solutions to benefit the entire country.
