Cohousing-L Mailing List: Re: Capped Equity

[David M. Dobkin (dmdobkin]

Raymond D. Gasser wrote:
> 
> At EcoVillage at Ithaca we put in what we call a "flip tax". We don't cap
> equity, but if a house gets resold, the co-op gets back 20% of the profit
> after taking into account improvements, inflation, etc. The proceeds are
> supposedly earmarked for affordability issues.
> 
> Ray Gasser, EcoVillage at Ithaca
> raygasser [at] delphi.com
> 
> where we've got one or two units coming on the market, but they look a lot
> better in the spring when we're all outside planting!!!
> 
> At 09:11 AM 2/6/98 -0600, Floriferous [at] classic.msn.com wrote:
> >Putting caps on equity may cause banks to have problems loaning to your
> >project.
> >
> >Rob Sandelin
> >----------
> 
> >Our group in Hartland VT. is discussing Capping Equity on the resale of homes
> >in the future.
> >
> >I have only seen equity caps tied
> >to initial subsidy, with the intent that the subidized homeowner not profit
> >from the subsidy, thus also retaining the subsidy to the next purchaser.
> >
> >Has anyone see or been part of a system that caps unsubidized homes?
> >
> >
> >Robin Ellison
> >Hartland Co housing
> >>

At the community commonly called Berkeley Cohousing (we have never
formerly named ourselves: no one should forget that we have a defacto
name given to us by various media entities) we have created what is
essentially a limited equity condominium. There is a deed restriction,
for thirty years, that caps the price appreciation of the units to a
formula tied to the rise in area median income, not the area real estate
market.  It is a complicated formula(but we believe an easy to use
formula) that also takes into account capital improvements that add to
the value of the individual home AND to the community as those community
improvements also add value to the home as well.

For those of you serious about discussing it with me for an individual
project, my phone number,daytime, is 510-549-8275. Saturdays included.
A copy of the deed restriction can also be sent if you mail me a SASE at
2220 Sacramento Street, Unit #E, Berkeley, CA 94702

David M. Dobkin