Re: Re: the microflat as a module in affordable inner urban design
From: Sharon Villines (sharonsharonvillines.com)
Date: Mon, 15 Jul 2002 08:13:01 -0600 (MDT)
on 7/14/2002 2:48 PM, Jock Coats at jock.coats [at] oxfordlibdems.org.uk wrote:
> You borrow less because you are building at cost, not for profit.

Business people please correct me if I'm wrong:

One confusion about "profit" in business is that when you own your own
business, the "profit" is your salary. It is not extra money. Someone has to
be paid to do the work of developing the project. Thus doing it "at cost"
will still include a developer's salary. "At cost" is often used to mean
that the labor is donated. I don't think you can build an apartment complex
with donated labor.

If you are using invested funds, the investors will want to receive interest
for the use of their funds. This can be as "profit" (shared risk) or "cost"
(set interest rates) however you want to look at it but you still pay.

Forming a non-profit corporation will enable you to avoid some taxes and
receive certain kinds of grant moneys but this is very hard to do when there
is a mix of affordable and low income units with market rate units.

Some programs in the United States provide various special funds and tax
relief as long as the residents stay for 10 years. If they leave or sell
before that time, they have to pay back the money (a lien is placed on the
property). After ten years, the property is treated like any other property.

Your individual corporation could try something like that. It prevents
people from buying for investment or to rent. Otherwise you have the same
problems that others have mentioned of people being trapped by rising prices
elsewhere.

Sharon
-- 
Sharon Villines
Takoma Village Cohousing, Washington DC
http://www.takomavillage.org


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