Re: Incentives for early joiners
From: Raines Cohen (coho-Lraines.com)
Date: Sat, 22 Apr 2000 19:38:01 -0600 (MDT)
Mariana Almeida <mqa [at] pacbell.net> wrote on 4/22/00 4:23 PM:

>Some people may
>be better able to afford a unit if they can invest their money with a 50%
>rate of return. (Esp. if this is rolled into the asking price without
>having that interest taxed.) 

But wouldn't the people most in need of affordable housing typically be 
the least able to (a) take the risk on downpayment $, and (b) have the $ 
to begin with... so the benefit is primarily for those who are already 
sufficiently funded to survive if part of their capital vanishes... plus 
those that are in a position to put up $ early, years before it 
translates into housing benefit. It might help a few people on the edge.

>The issue to me is that the early risktakers make it possible for the
>project to exist at all. 

And the later buyers make it possible for the early risktakers to have 
the confidence to take that risk. It's a mutual symbiotic relationship... 
one where you can build in incentives like a high rate of return, but you 
have to balance that with the goal of keeping the purchase prices as low 
as possible... the same argument applies with internal transfers for 
"affordability"... it's a zero-sum game if every $ put towards making 
unit A (or buyer Z) more affordable means that unit B (or buyer X) is 
priced out of the project. Especially when construction costs can't 
reliably be predicted.

Raines (who, it should be pointed out, is in the same group as Mariana!)

Raines Cohen <coho-L [at] raines.com> <http://www.swansway.com/>
Finally living in community -- worth the wait!

  Member, Old Oakland [CA] Cohousing at Swan's Market
Where 18 of 20 households have moved in.

  Member, East Bay Cohousing [no site yet] <http://www.ebcoho.org/>
Which has just about everything except the site figured out.

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