Re: Economic naivete
From: Robert Hartman (
Date: Tue, 4 Jan 94 10:29:32 PST
> From cohousing-l [at] Mon Jan  3 09:37:27 1994
> Date: Mon, 3 Jan 94 11:35 CST
> Originator: cohousing-l [at]
> Sender: cohousing-l [at]
> From: david sucher <dsucher [at]>
> To: hartman [at]
> Subject: Re: Economic naivete
> X-Listprocessor-Version: 6.0 -- ListProcessor by Anastasios Kotsikonas
> Status: R
> On Mon, 3 Jan 1994 biow [at] cs.UMD.EDU wrote:
> > To sum up, we are trying to do something radical with co-housing:
> > we are trying to change the nature of our living arrangments
> > and communities. Let's not complicate things by tying our fate to
> > an attempt to solve possibly unsolvable economic problems.
> Well said.

Agreed, unless of course there's a way to provide the major benefits of
individual ownership without having to transfer title.  

The equity that builds up is a fund that individual members can use for
financing when it is time for them to upgrade.  If they know that they
can get access to those funds to finance a new home, they'll have
incentive to keep their share of equity high.  And they can do that if
the association is set up with this in mind.

As long as the rental income stream from the original cohousing unit
remains stable, lenders will be happy to finance new loans on the equity,
esp. for the purchase of additional real estate with a guaranteed
tenant.  Thus, a new member can come in at the same rental rate as
the departing member.

By using a departing member's share of equity as collateral to finance a
down payment, the association's holdings grow.  The member gets to
move into a new place that he or she can afford, and the new house
becomes part of the stock of the association when the departing
member decides to move _again._

Theoretically, the association could continue growing unabated.  The
only exception might be if a member needed to move out-of-state or
out of the country.  In that case, cashing out might be the only option.
But those occurrences should be rare in comparison with members who
just want to upgrade locally.


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