equity caps
From: Philip W. Bush (Philip.W.Bushdartmouth.edu)
Date: Thu, 12 Aug 1999 10:26:27 -0600 (MDT)
At Cobb Hill we need to make a decision soon about whether or not to limit 
equity gain in houses by indexing the increase in price to CPI, rather than 
letting the market determine price.

This is complex, and I apologize for the length of my inquiry.  We may have 
some subsidized affordable housing units where equity limits are required by 
the funding.  Our current question is whether to impose similar limits on all 
units in order to keep costs low for future buyers.

One of our members has written, "I have  a sense of conflicting world views - 
neither is right or wrong per se -  but they are very different.  One world 
view is that to ensure my security  and well being - and that of my family - it 
will be necessary to own my home  like an investment - to be able to realize 
the market warrented gain.  That  limits imposed by something other then the 
market will constain my ability to  find new housing, provice for my children, 
retire.. etc.  And some people  have had this experience.

The other is that my housing and community are a place to make my values and  
ideals concrete.  They provide a way to separate out my lviing from "the  
market" to give expression to ideas of generiosity to future families and  
generations, to keep in the community values crated by our work together.  A  
willingness to take a big risk.

Both these view have embedded in them numerous assumptions and interests.

I am wondering if we could get a bunch of information from somewhere.  For  
instance - I wonder how many people actually sell their homes for more then  
cost plus inflation - esp. if you take into account what a mortgage actually 
costs.   In other words - will having a  fixed price agreement likely lose 
anything?  Or really make a difference?" 

I am curious what other co-housing communities have done - is it possible to 
put this  out on the co-housing list as a question?  And to get more 
information about the impact of limited equity in affordable housing 
developments that are several years old?"

Do any of you have established equity limits have experience you can share?  
How about those who have not?

Phil Bush
Cobb Hill
Hartland, VT

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