Cohousing-L Mailing List: Re: A strategy for affordability

[Richart Keller (richart.keller]

Hi Fred

Thanks for the thoughtful remarks.  I certainly agree that the CLT is not
the final solution to affordable housing, nor is there likely to be any
long-term widely applicable solution in our "free market" system. The
inability to use a net resale profit as a means of climbing the asset
ladder is an important consideration,  However, the problem of affordability
goes much deeper.However, a paradigm shift in the social contract in this
country as it effects housing seems unlikely in the foreseeable future.

As you imply, although it embeds the "American dream", the conventional
approach has its flaws as well.  Unfortunately, these flaws aren't often
given serious consideration in comparisons with the CLT approach.

In our economic system their house is perhaps the only potentially
productive asset available to many if not most people of modest means.
However, a "conventional" house is not necessarily a secure, productive
investment; the financial risks are substantial:  Many homes available for
purchase by a low-moderate income family lack strong investment growth
potential:

a) Obtaining a net positive resale value is not assured, even without the
additional risks from and costs of the predatory practices which have
increasingly contaminated the lending industry over the last few decades.
This is particularly true for low cost houses which are often located in
unstable neighborhoods..

 b) Depending on the nature of the structure, the holding costs can be very
high and are not usually factored into the calculation of the return on
investment.  Such costs can include repairs and "improvements" to deal with
structural deterioration resulting from neglect and/or poor initial
construction, chronic moisture and/or drainage issues, as well as high
energy costs, periodic painting or replacement siding,and re-roofing,  Large
older houses (commonly found in urban neighborhoods) are prone to especially
high costs for such measures.

c) Upon moving, there is a substantial risk that the purchase cost of the
next house may not be financial beneficial--there may be no net gain.

d) In many cases, the current value of houses which were originally sold
with "affordablity" restrictions is beyond the means of the people whose
earnings would make them eligible buyers.


With regard to Brian's thoughts, when I last looked, the costs of
construction in many parts of the country were beyond the means of low
income families--particularly if the cost of land and utilities are
included.  In some (particularly urban) locations, without free land, the
costs are problematic even for Habitat for Humanity.

I really hope that the cohousing movement can find a way to make more units
affordable on a continuing basis.  I am convinced that cohousing nurtures
basic values and a mutually supportive lifestyle which shoud be availlable
to people regardless of means.  I also suspect that as the value of
cohousing units has increased, a number of people who were lucky enough to
be among the original owners could no longer afford them.

Ironically, although costs of living (other than paying for a mortgage) in
cohousng seem to be substantially less expensive, the social opportunities
are richer than in conventional neighborhoods in the U.S.

I am envious and appreciative of your situation--we reluctantly sold our
family's homestead after about 40 years.

Rick







On Sun, May 16, 2010 at 9:30 AM, Fred H Olson <fholson [at] cohousing.org> 
wrote:

>
> Richard, thanks for the pointer to
> The Community Land Trust Reader
> see http://j.mp/cJZrpy
>
> ( which goes to:
>
> http://www.lincolninst.edu/pubs/1776_New-Book-Announcement--The-Community-Land-Trust-Reader)
>
> Community Land Trusts (CLT) have been discussed on Cohousing-L
> from time to time.
>
> But things have changed.  One of the main problems with CLT's is that
> since CLT's are few in number in the US, moving from one to another
> can be difficult. This may result in having to go back into the
> regular housing market where housing prices may have inflated leaving
> one's equity short since CLTs limit price inflation.  But the housing
> market meltdown has clearly shown that planning on housing inflation
> can be problematic too.
>
> I too find Brian's reply odd.  Particularly his example:
>
> > used travel trailer for a few thousand dollars, and park it in a
> > friend's suburban backyard for perhaps nothing.
>
> However I do sort of agree with his conclusion:
>
> > If low and moderate income folks are having trouble affording a
> > house, the problem is NOT the cost of building it.
>
> A main problem is the market that, till recently, pushes prices
> very high in many places.  It bewilders me how people afford housing
> prices in some places.  This is what CLT's address.
>
> Fred  who has lived in the same house for 33 years, one strategy
>      is to stay in the same place for a long time.
>
> --
> YEA! (& boo) 3/23/10 Health Care Reform Passed! See my Blog entry.
> Fred H. Olson  Minneapolis,MN 55411  USA        (near north Mpls)
> Communications for Justice -- Free, superior listserv's w/o ads:
> http://justcomm.org      My Link Pg: http://fholson.cohousing.org
> 612-588-9532 (7am-10pm CST/CDT)   Email: fholson at cohousing.org
>
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