Cohousing-L Mailing List: Re: Maintaining affordability

[David L. Mandel (dlmandel]

I know of very few cohousing communities that had initial affordability
provisions, let alone rules that were supposed to maintain them for
subsequent owners, even for a limited time. There may have been more in
recent years, but I haven't been following this very closely for a while.
Maybe we can hear about some other experiences from other people on this
list. ..
The monitoring was supposed to be done in our case by the local housing
authority, which holds silent second mortgages for the subsidized units.
When an owner sells, this loan must be paid back with a portion of the
appreciation, according to a formula in the note. Since the loan is secured,
the authority must sign off on a transfer, so that was to have been the
enforcement mechanism. Why didn't this happen? A few reasons.
1. Employee turnover at the housing authority. The new people were
unfamiliar with the rather complex arrangement and less committed to keeping
to it.
2. Lack of incentive for the agency: In any case its loans are repaid upon
resale, and there are other things they'd rather do with the money instead
of recycling it to new borrowers in our community. It might even get more
bang for the buck using the dollars for other affordable housing.
3. Self-interest of low-income sellers. Who wouldn't prefer to sell at
market value and have a larger pool of potential buyers, if possible?
4. Lack of follow-up commitment in the community. No one wanted to make it
harder for friends who needed to move on. And in several cases, prospective
new buyers had a lot of friends in the community and no one wanted to be the
bad guy, keeping them from being able to buy in
because of the abstraction of the restrictive rule.
David, Southside Park

----- Original Message -----
From: "Graham Meltzer" <graham [at] grahammeltzer.com>
To: <cohousing-l [at] cohousing.org>
Sent: Thursday, December 25, 2003 3:38 PM
Subject: [C-L]_Maintaining affordability


> Thanks Liz and David for the info.  But this is really fascinating ...
>
> >     Unfortunately, however, the affordability was only temporary. For 10
> > (moderate) or 30 (low) years, sales were supposed to be only to someone
in
> > the same financial category and at a restricted price. But the housing
> > authority that partnered with us on the deal has not been interested in
> > maintaining/enforcing even this much, so affordability is disappearing
as
> > original subsidized owners move on (though more than half remain) and
the
>
> I've often wondered when it's said that a unit HAS to be onsold to people
in
> a similar low income catagory, and that the price HAS to be tied to median
> income levels ... whether, in fact, that's what happens.  Who monitors and
> enforces it and with what level of committment?
>
> So David, do you think your experience is common?  Do you know of other
> communities where the limitations on price rise have stuck and units have
> remained available to low income folk, only?
>
> Graham
>
> graham meltzer
> contemporary photography
> 15/27 ballow st, fortitude valley, qld 4006
> ph: 07 3257 4852      web: www.grahammeltzer.com
>
>
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