Perpetual Affordability Covenants: Can These Land Use Tools Solve the Affordable Housing Crisis?

Approximately 3.8 million privately-owned residential housing units in America today contain affordability covenants recorded in their chains of title. State and local agencies and the District of Columbia use these covenants to ensure that publicly-subsidized properties are actually used to provide affordable housing. With rents at all-time highs and stagnant wages, the affordable housing crisis has reached a fever pitch. House Democrats are proposing billions more in housing subsidy. To the extent those funds subsidize privately-owned housing development they, too, will be secured by affordability covenants. In response to this crisis, a new trend in high cost markets is to extend the duration of affordability covenants into perpetuity to create or maintain a permanent stock of privately-owned affordable housing, rather than allowing these covenants to expire after some term of years. Despite their ubiquity, there is no scholarship and remarkably little case law on the validity of affordability covenants. This is astonishing given that affordability covenants often do not satisfy the traditional requirements for real covenants or equitable servitudes at common law, and yet are relied upon to secure billions of dollars of public investment in affordable housing. The scarce case law on affordability covenants relies on public land use justifications to uphold these covenants, ignoring traditional property law doctrine. This Article argues that affordability covenants belong among the new, “hybrid,” public/private land use devices that straddle traditional property law and public land use law. The Article looks to other hybrid devices that have received more judicial scrutiny and scholarly interest—particularly conservation easements—and concludes that affordability covenants are at risk of judicial invalidation unless they are supported by state enabling legislation. Finally, the Article argues that the unique public purpose driving perpetual affordability covenants gives rise to legislative considerations that should be addressed by all state enabling acts