Cohousing-L Mailing List: Re: capping resale prices

[Jock Coats (jock.coats]

C2pattee [at] aol.com wrote:

> I, too, believe that artificially holding down the resale price of a person's home can have unintended, and very negative, consequences.  However, Hartford (CT) Area Habitat for Humanity (and maybe the method is universally used by Habitat chapters)has a method to capture the "excess profit", if any, from resale of a home whose initial cost was subsidized by volunteer labor and donation of materials.  
>
> Habitat houses are sold at cost of construction, which works out to about 
> $80,000 for 'simple, decent housing', with 3-4 bedrooms and no garage.  Habitat 
> sells the house to the homeowner with a no-interest morgage.  The key element 
> for recapturing 'profit' above the sale price, should the homeowner choose to 
> sell, is a second morgage that is repaid *only* if the new sales price is above 
> the original price.
>
> In the city of Hartford itself, this is a pretty moot issue, since we literally 
> couldn't give away houses in certain areas of the city, and it's unlikely that 
> any Habitat house in Hartford would sell for the actual price of construction 
> (which is why the city fathers love us.  We're almost the only orgaization 
> putting up new housing in the city, and we finally learned that even poor 
> people want to be in a single family house, in a safe part of town.)  On the 
> other hand, in the wealthy town of Farmington, just outside the city, we built 
> two homes on scraggy little pieces of land that the town wouldn't even sell to 
> us (they are leased for 99 years at $1/yr) because of past scandals in other 
> towns with get-rich-quick resales of affordable housing.  I doubt those 
> families will part with their houses any time soon, but if they did, they would 
> go for much more than the original price - the morgage would be paid, the 
> family would get back their already-paid principle, and Habitat would claim the 
> remainder via the second morgage (which i think decreases over a 20 year period 
> so the family will be able to benefit from real estate market appreciation to 
> some degree).
>
> This system obviously requires an organization with resources for initial 
> capitalization and a long term time frame for implementation.
>
> Christine Pattee
> late of Greater Hartford Cohousing.
>
>  
Sounds like an innovative way of creatign a sort of Georgist Land Value 
Tax.  Not sure I quite understand the second mortgage. <english pedant> 
It IS morTgage by the way.  It is an important reminder of what it means 
- 'Death Pledge'</english pedant>

--
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+  Jock Coats, Oxford Liberal Democrats, M3a Morrell Hall, OX3 0TU  +
+       T:+44 1865 485019 M:+44 7769 695767 F:+44 845 1275714       +
+   E(pref):jock.coats [at] oxfordlibdems.org.uk Cix:jockox3 [at] cix.co.uk   +
+     W1:www.oxfordlibdems.org.uk W2:aldco.oxfordlibdems.org.uk     +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++



_______________________________________________
Cohousing-L mailing list
Cohousing-L [at] cohousing.org  Unsubscribe  and other info:
http://www.communityforum.net/mailman/listinfo/cohousing-l