Re: Affordable (Co)housing
From: Diana Carroll (dianaecarrollgmail.com)
Date: Mon, 19 Apr 2021 17:01:42 -0700 (PDT)
Sharon notes: "But it sounds like they are not owners. If they can’t sell
at the price that is considered “affordable” at the time they sell, there
is little advantage over renting, except that they can live in your
community."

We have a similar model for our affordable units here in Mosaic Commons --
the price on resale is set according to a formula, so you can't really make
a profit, so it doesn't count as an investment the way standard real estate
does.

I wouldn't say, though, that there's no advantage over renting. There are
pluses and minus. A big plus is that it never goes away. No one gets to
kick you out to convert your apartment to a condo. No one will raise your
rent as the neighborhood gentrifies.  (The association fees may go up, but
you get a vote in that. And here at Mosaic, the association fees are
subsidized as well.) You can choose what you want to do in the house --
painting, knocking out walls, whatever.  You can borrow against it (take a
second mortgage).  You can pass it to your children/beneficiaries. It's
protected against bankruptcy (at least in MA, not sure about other states.)
It's way harder legally to foreclose on a mortgage than to evict a tenant.
Basically...you OWN it, and there are advantages to owning things rather
than renting them.

And depending on the specific neighborhood and nature of the subsidy, it
might be cheaper than renting. You'd be hard-pressed to find a rental as
nice as our homes in our town -- and we live in a very desirable town in
terms of school district, commuting and so on.

Yes, there are also sorts of minuses compared to renting too. I'm not
getting into those, I'm just pointing out that growth of capital is not the
only reason to own a home.

On Mon, Apr 19, 2021 at 6:56 PM Sharon Villines via Cohousing-L <
cohousing-l [at] cohousing.org> wrote:

> > On Apr 19, 2021, at 2:15 PM, Zev Paiss <zevpaiss [at] gmail.com> wrote:
>
> > There is zero “compensation” for owning a permanently affordable home
> except that they can afford to purchase it in the first place. The only
> controls the selling price and the income of buyers.
>
> But it sounds like they are not owners. If they can’t sell at the price
> that is considered “affordable” at the time they sell, there is little
> advantage over renting, except that they can live in your community. Aside
> from the downpayment (which is a big thing) could they afford to live there
> otherwise and carry a  mortgage?
>
> An example of the problem in terms of life planning is a household that
> moved here from California. They had for 10-20 years lived in a community
> that was jointly owned. Everyone had worked to rehab a set of houses
> forming a community. But if you left, you took nothing with you. They had
> invested a lot of time and energy to something they just walked out of.
>
> Is that a good model? Is it sustainable?
>
> Sharon
> ———
> Sharon Villines
> http://affordablecohousing.com
> affordablecohousing [at] groups.io
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> affordablecohousing+subscribe [at] groups.io
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>
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>
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