Why Explore Equity Partnerships and Parcel Conveyance for Affordable Housing?

In many communities, land is one of the most significant barriers to building affordable and attainable housing. Traditionally, cities or government entities have sometimes donated or sold land at a reduced cost to make a project feasible. While this approach can be very effective, it also means the community permanently gives up a valuable asset and receives little return beyond the housing itself.

An emerging model is the equity partnership combined with parcel conveyance. Instead of giving away land outright, the government contributes the value of its land as an in-kind equity investment. This model is still new in Colorado but is increasingly being tested across the United States as a way to leverage public land for affordable housing while ensuring long-term community benefits.

What is an Equity Partnership?

An equity partnership allows the land value to be recognized as part of the project’s “capital stack”—the combination of all funding sources needed to finance construction. By contributing the land as equity, the government strengthens the project’s financial foundation and makes it more competitive for securing Low-Income Housing Tax Credits (LIHTC) and other subsidies.

Unlike a donation, this model can provide the government with a form of ownership interest or residual return. While a public entity cannot technically operate for profit, any return generated from its contribution can be reinvested in future housing or community initiatives. This creates a revolving resource rather than a one-time subsidy.

Why Parcel Conveyance Matters

For LIHTC projects, long-term site control is a requirement. Developers must show they have ownership or equivalent control over the land in order to qualify for funding. Parcel conveyance—through sale or long-term lease—gives the developer the certainty needed to secure investors and lenders, while deed restrictions and affordability requirements ensure the community’s goals are protected.

When paired with an equity partnership, parcel conveyance creates a balance: the developer gains site control to unlock financing, and the public retains accountability, affordability protections, and in some cases, a pathway to reinvestment.

Why This Benefits Communities Without Dedicated Housing Funds

For governments that lack a steady funding source for housing, this approach offers a way to put existing land assets to work. By investing land instead of cash:

• Development costs are lowered, making homes more affordable.

• Projects are stronger candidates for tax credits and grants.

• Any future return on the land value can be reinvested into other initiatives, for housing or other community needs.

This is not just a financing mechanism—it is a form of public-private partnership (P3). In a P3, the government brings resources such as land or infrastructure, while the private partner takes on financing, construction, and operational risk. Together, they can deliver affordable housing that would not otherwise be possible.

Examples from Across the U.S.

This model is being explored by a growing number of communities:

• Austin, Texas has used publicly owned land in multiple LIHTC-supported projects, sometimes contributing it as equity to ensure deeper affordability while preserving long-term public benefit.

• San Antonio, Texas created a Public Facility Corporation (PFC) that partners with developers, using city land as equity to receive a share of revenues while guaranteeing affordable units.

• Charlotte, North Carolina has partnered with nonprofit and for-profit developers by contributing land value in exchange for affordability commitments and long-term oversight.

These examples show how equity partnerships and parcel conveyance are becoming part of the national toolkit for cities working to address housing shortages.

Doesn't this raise costs for the renters?

Reducing development costs at the front end directly protects affordability at the back end. In LIHTC projects, rents are not set by how much it costs to build; they are set based on household income levels. When less debt service is required, the project does not need to layer in additional financing that could otherwise raise costs or make the deal unworkable. In fact, lowering upfront costs makes it easier for developers to lock in lower rents and keep them affordable for decades.

A Path Forward

By combining equity partnerships with parcel conveyance, a government entity can reduce upfront development costs, help projects secure critical funding, and preserve affordability for decades—without needing to draw from limited cash reserves.

This model allows communities to treat land as a renewable resource: one that not only makes today’s housing possible but also generates value that can be reinvested in tomorrow’s solutions.