Re:Equity caps - Limiting Returns
From: Fred H. Olson (
Date: Thu, 12 Aug 1999 16:35:33 -0600 (MDT)
Scott Crowley scowley [at] 
is the author of the message below but due to a problem it was posted
by the Fred the list manager: owner-cohousing-L [at]
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Hi, Philip:

I have a personal interest in affordability.  I was once with a group of
idealistic folks who tried to establish a Community Land Trust in New
Hampshire.  Limiting the (almighty) speculation in your housing definitely
is a risk in this day and age.  I was fortunate enough to live close
enough to employment to have a decent prospect of having work while making
the sacrifice of limiting the return on my housing investment. Therefore I
took the risk, and agreed to limit the growth of the capital investment to
just the cost of living.  However, I did not have a big family with which
to navigate the visscitudes of the future.  Limiting return on equity is
an awesome commitment to one place. 

   I have now finished helping to develop a cohousing community.  We have
5 of 26 homes in an affordability program.  Instead of each of us limiting
our equity, we allowed the affordable homes to be limited for 15 years
under a HUD program of "investment credits" which is administered by a
local agency.  They and their investors are, therefore, taking the risks. 
You probably have a similar agency in VT.  Where those of us who didn't
limit the return could help is, as Joanie Blank so admirably did, by
taking some of our profit and putting it back into the cohousing movement. 
Perhaps you should earmark it for development of affordable components, or
directly toward ownership of homes for those in affordability programs. 
Another inspiring example is that of the Harambee housing in Chicago where
all of the construction was "sweat equity", and donations were repaid by
formally limiting the profits on resale. 

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