Why it Matters

Community ownership housing models—including community land trusts, resident-owned communities, and cooperative housing—have all the ingredients for massive scale: strong demand, proven track records, and significant wealth creation potential. What's missing is the financing ecosystem to match the opportunity.

The Big Picture

These models could deliver this generation's wealth-building breakthrough, much like the 30-year fixed-rate mortgage enabled Baby Boomer wealth creation or how the Low-Income Housing Tax Credit built millions of affordable units. But they're stuck in a financing bottleneck that's keeping billions in community wealth locked away.

The Problem

Community ownership faces a classic collective action problem. Fund managers develop deals in isolation while juggling misaligned investors and complex capital stacks. Meanwhile, institutional allocators see the sector through fragmented lenses, missing the true scale of opportunity. Result? Impact-focused managers get the "slim pickings" after private equity firms acquire their fill of properties.

By the Numbers

A recent Grounded Solutions Network investor convening revealed both the enthusiasm and the barriers:

• Over 300 locally focused community ownership developers need capital

• Deals take significantly longer to close than traditional real estate ventures

• High perceived risk leads to higher cost of capital, limiting growth

• An "alphabet soup" of terms (CLTs, LECs, ROCs) confuses investors and communities

The Three-Part Solution

1.  Create shared language and storytelling: "We welcome the opportunity to invest more capital in community ownership housing funds with ambitious scaling goals," says Neha Shah, head of community development lending at Charles Schwab Bank. "Better definitions, data on the track record of the industry, and well-supported fund managers with some early wins are all necessary to increasing the scale of our investment."

2. Build market infrastructure: The field needs standardized investment products, reliable benchmarking data, capital aggregation platforms, and risk management tools. "We need robust infrastructure that can carry capital to people and places it wouldn't otherwise reach," says Catherine Godshalk, chief investment officer at Calvert Impact.

3. Design for institutional capital: Leaders should prepare for scale by developing municipal bond frameworks, state revolving loan funds (like Colorado's affordable housing fund), and partnerships with government-sponsored enterprises like Fannie Mae and Freddie Mac.

The Opportunity

Even the best-designed community ownership models require some concessionary capital—but that's the mechanism that enables shared prosperity, not a flaw. The field could stretch those dollars further by scaling operations and tapping favorable market-rate tools.

What's Next

Organizations like Grounded Solutions Network and Integrated Purpose are building this infrastructure now. Other sectors—charter schools and green banks—have successfully made this transition to institutional capital. Community ownership can too.

Go Deeper

• Grounded Solutions Network's community ownership resources

• Calvert Impact's Community Investment Note structure

• Center for Community Investment's shared ownership research

• Enterprise Community Partners' wealth-building initiatives