Paper Abstract
95. Jack Feiyang Chen, Deed Restrictions and Affordable Home Ownership, 06/2023.
Abstract: Deed restrictions are a commonly used instrument in connection with affordable home ownership programs. As covenants attached to subsidized ownership units, deed restrictions set—among other provisions—maximum sales prices and occupancy constraints, binding current and subsequent owners over a specified period. Deed restrictions attempt to achieve two conflicting policy goals: allowing owners to build equity while keeping property affordable for future inhabitants. Deed restrictions thus represent an “ownership-lite” version of property ownership, missing a number of “sticks” from the proverbial bundle, and compound the risk and limit the reward of home ownership. This paper presents a survey of Massachusetts deed restrictions over the last three decades, and outlines the main components of deed restrictions and how they affect the incentives and payoffs of property ownership compared to unencumbered title.