|Re: equity caps||<– Date –> <– Thread –>|
|From: David L. Mandel (dlmandelrcip.com)|
|Date: Sat, 14 Aug 1999 20:25:21 -0600 (MDT)|
This response to Don Lindemann's comments on equity caps is in addition to my previous comment regarding the initial query, though both may actually go out at the same time. I understand and agree with most of Don's point, which boils down to the assertion that regular people like us shouldn't take individual responsibility, at the cost of adversely affecting our own economic security through equity caps, for providing others with affordable housing. The adverse consequences in the context of our economic system can indeed create unnecessary hardship, and it's unfair that some should bear it while others don't. Now, two buts: 1) Sometimes it's a reasonable tradeoff in the context of a deal that enables people to obtain desirable housing in the first place. For a very low-income resident who otherwise couldn't have come close to buying into my community, it wasn't a bad option -- and in our deal, if there's a lot of appreciation caused by a hot housing market, the low-income person who sells shares that bonus with the housing authority, according to a formula that we spent a long time negotiating. It may be that for Berkeley cohousers it wasn't worth the price, that you negotiated a bad deal. I don't know how much of a tax break you got in exchange for accepting limited equity. Perhaps there was no choice and if it's what made the project possible, would you not do it again? ... And if the housing market there hadn't taken off, as you describe, perhaps it wouldn't look so bad. As long as housing is treated as a commodity in our society, the decision to "invest" in a home is a sort of gamble; one could decide instead to rent and put the other resources into stocks or bonds, not into home equity. Any special conditions that come along with the investment need to be weighed among the other considerations. It's not fair that the rich are much more likely than I to become even richer by investing in stocks. I devote energy to overthrowing that system. But meanwhile, I still have to make decisions about housing and about where to invest the little surplus I may have. 2) The other option is to create a different type of housing, one that could demand far fewer financial resources from the residents both initially and onwards and that creates little or no equity. I'm disappointed that more cohousing communities don't choose to become cooperatives, for which a limited equity option could be easily applied for all -- and which, I would argue, are much more in tune with the cohousing idea. Again, part of the blame is the lending market and laws in the country, which discourage co-ops. But there are a lot of them, there is a co-op bank, and many cohousing groups -- including mine and the Berkeley folks -- have considered the idea but backed off. Too bad.
- Equity caps, (continued)
- equity caps Philip W. Bush, August 16 1999
- Re: equity caps Bitner/Stevenson, August 16 1999
- Fwd: equity caps RowenaHC, August 17 1999
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