Cohousing-L Mailing List: Re: Help!

[Nancy Wight (wight]

Well, since you asked... 

We considered this for awhile early on, and finally came to the 
conclusion that a limited equity arrangement is not feasible unless
the community is "subsidized" from some outside source.  This is
because the original owners end up paying market rate for their
housing, but end up selling it for below market rate (assuming the
market rate increases over time).  The subsequent buyers get a deal because 
they get to purchase the house at below market rate.  If any of the
original owners need to move out of the community, they would be
penalized because their house did not appreciate at the same rate
as houses outside of the community, and therefore they would not be
able to buy a comparable house.  The main thing here is, as Pablo
stated a couple of weeks ago, the original owners end up subsidizing
the "limited equity".  

There is also the issue that, if there are units available at below
market rate (in the future), you get people who are less interested
in the cohousing aspect and more interested in the cheaphousing aspect.

- Nancy

> 
> Tucson Cohousing is having a discussion concerning Limited Equity or market 
> value in the resale of property or improvements.  
> 
> 1. Can anyone out there give some thoughts or feeling regarding this topic.  
> 
> 2. Did anyone compromise and what did you do.
> 
> Any and all input is appreciated.
> 
> 
> Gregg (smithmcc [at] delphi.com)
> 

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Nancy Wight                                               (508) 659-4974
New View Neighborhood Development, Acton, MA            wight [at] wal.hp.com
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