HIP Tool: Affordability Covenants

Affordability covenants can be incorporated into affordable housing projects to limit the resale price of ownership units or tie rents to established income thresholds to maintain the affordability of the units, either for a set period of time or in perpetuity. These controls can be set up through regulatory agreements, deed or mortgage restrictions, options or other legal agreements.


Deed- or title-based price controls use income-based restrictions and other qualifications (e.g., household size, employment status) to preserve affordable housing. In owner-occupied housing, price controls ensure that when a unit is put back on the market, it remains at a price attainable to low-income families. The equity the owner has in the home is limited, thus constraining the return the owner can receive when the home is sold, but conditions in the deed generally ensure that the owner receives some profit. In rental buildings, price controls set rent limits to a percentage of median county income for a particular household size.

Cities can advocate or mandate affordability covenants when a developer is constructing affordable homes, but they do not generally write the deed or manage the income-screening process. A non-profit developer or housing authority administrating the unit usually handles income or household screening required to qualify for the unit. An ordinance attaching a covenant to a particular regulation may specify language to be included in the recorded covenant, including its duration, eligibility requirements, and how the covenant is attached to the property. The covenant is recorded with the county recorder. Depending on how the covenant is written, the city may later play a role in ensuring that the unit remains affordable if the property is redeveloped or resold. Units constructed under some programs, such as the multifamily tax exemption, require affordable units to remain so for a specified number of years. Affordability covenants can be mandated with a provision of an incentive, such as density bonuses.

Tool Profile

Focus Areas

  • Urban Centers
  • Transit Oriented Development
  • Expensive Housing Markets
  • Innovative Single Family Techniques

Project Types

  • Single Family
  • Multifamily
  • Ownership
  • Rental
  • Market Rate
  • Subsidized

Affordability Level

  • Less than 80% AMI

Housing Goal

  • Affordability