Cohousing and THEY as is THEM
From: biow (biowcs.UMD.EDU)
Date: Wed, 7 Sep 94 10:37 CDT
The "Alienation" thread seems to have jumped from good-natured grousing
to wild and ignorant conspiracy-mongering. I know I'll never dissuade
a True Believer in any conspiracy (see the sci.skeptic FAQ for details
on why this can't be done), but perhaps I can provide some straight 
information for other readers, and direct conspiracy theorists to
alt.conspiracy, where their insights will be truly appreciated.

First, I'll say that I have worked in the "mortgage banking" industry
as a mortgage loan officer. I now work for a company that writes software
for loan officers and real estate agents. It is fair to say that this 
industry is very much structured to exploit the naive homebuyer. But 
the nature of this exploitation has nothing whatever to do with the
popular perception of "bankers." In fact, I'm not sure that we could 
do much about this exploitation without making things worse--thus far
almost every US government attempt to improve the situation has harmed
the homebuyer. As with any other area of economic activity, there is no
substitute for an informed buyer.

Rather than rattle off on this tangent, I'll respond by addressing some recent
articles from the list:

On 3-Sept. "Craig D. Willis" <willic3 [at] rpi.edu> wrote:
>But one thing that I
>am very aware of is that cohousing has the potential to be a threat to
>powerful vested interests in our society.  I do *not* expect the
>status quo elements of our society... those who profit from the
>powerlessness and alienation that has been engineered for the masses
>in terms of their living (e.g. housing) choices... to be supportive of
>our efforts to find alternatives to the straightjacket we've been ever
>more solidly confined in for the entirety of this century.

Actually, without an identification of who THEY are, it's hard to directly
refute this. At the least, it would seem that THEY have resources and 
aren't willing to devote them to cohousing as much as the poster would
prefer. THEY as have resources usually choose to use them in as lucrative
a manner as possible, with maximum return for a given level of risk. 
Cohousers who have done the (hard) work of assuring THEY of reasonable
risk levels have received loans at the same market rates as other types
of housing. To ask for anything more is to beg the goverment to force
THEY to give you money. You're hardly the first in line for that sort
of money.

On 6-Sept. Bob Morrison <morrison [at] took.enet.dec.com> responded:
>  I think the powerful (bankers, town planning boards, etc.) DO often oppose
>cohousing, but do so mainly due to fear of the new and unconventional, not due
>to a deliberate scheme to create alienation.

This is closer to reason, but still misses the point. Mr. Morrison asserts that
bankers and town boards are somehow "powerful." Depending upon your definition 
of that
word, they may be, but they retain their power only because and only for so
long as they behave in ways that please their investors and constituents.
Bankers hardly ever lend their own money. In fact, they rarely lend even the
bank's money for residential real estate. Typically, your local bank merely
fronts for a local mortgage company, which brokers the loan to a government
chartered secondary market company. The money they lend today comes
almost exclusively from insured, sliced, diced, and securitized mortgage
debt instruments. Do you have any interest, direct or indirect, in a pension
fund? If so, you probably have much of that money invested in mortgage backed
securities. State retirement funds, which you as a taxpayer would be 
responsible for bailing out, invest very heavily in mortgage backed 
securities.

[rant on--directed at Mr. Willis, not Mr. Morrison]

THEY is YOU!

Yes, there were at one time banks that lent their own money for residential 
real estate, with great flexibility. They were able to do this only because
the US government helped them set a limit on savings account returns that 
exploited small-guy savers to subsidise this system. Once inflation forced
the removal of these limits, these banks (called S&L's) went broke, forcing
the taxpayer to make up the losses. (only slightly oversimplified)

THEY was YOU! And YOU got upset that YOU had to cover these losses. As
a result, YOU now have the mortgage backed security system that effectively
limits residential lending today. If YOU want to risk YOUR money (personal,
government, and pension) on different types of lending, feel free. But then
don't whine when YOU don't have a pension because YOUR money was blown on
real estate investments that weren't so wise after all.

[rant off]

>I think this alienation has occurred as a side effect of developers,
>bankers, etc. considering housing a "commodity", not as a deliberate plan
>of some sort.

Commiditization puts products within the reach of people who otherwise
couldn't hope to afford them. You may always choose to purchase outside
the commodity market. Feel free to assemble your own computer from scratch.
But if so, be prepared for the costs.

[rant on--directed at Mr. Willis]

We have a remarkable system in this country, in which people can purchase
real estate worth as much as three times their annual income, with as little
as three to five percent cash down payment. This is remarkable--you should 
hear the jealousy in my Turkish friend's letters when I tell him how easy
it was for me to buy a house. Through most of history and in most of the
world, this is impossible. Before rocking that boat, be very sure why your
idea is better. Realize that investment economics is completely unforgiving
of "neat ideas" and wishful thinking. Tour your choice of central African
country for object lessons in this area. It is far easier to make wealth
go away than to create it.

[rant off]

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