|Re:Equity caps - Limiting Returns||<– Date –> <– Thread –>|
|From: Fred H. Olson (fholsoncohousing.org)|
|Date: Thu, 12 Aug 1999 16:35:33 -0600 (MDT)|
Scott Crowley scowley [at] library.utah.edu: 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] cohousing.org -------------------- FORWARDED MESSAGE FOLLOWS -------------------- 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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