Cohousing-L Mailing List: Re: Affordable Housing

[William New (new.william]

> On Mon, 5 Sep 2016, 06:55:55, Nancy Csuti <nancycsuti [at] gmail.com> wrote:
> 
> Someone's house is often their largest single equity and important for
> their financial security. So when it comes to selling, should one sell at
> market rate ($300 = a sq foot in many urban areas), or sell at less than
> market rate, loose what would be income, but ensure diversity of home
> ownership?

This is the intrinsic peril of financial concentration in a single asset, 
versus portfolio diversification that spreads one’s wealth across a number of 
asset classes:  https://en.wikipedia.org/wiki/Diversification_(finance)

It becomes the argument supporting rental of housing (which can adaptively 
change over time with life events) and moving income into a variety of 
alternative investments (education, tools, children, quality stocks, 401[k], 
productive land, etc) whose value can be expected on average to appreciate over 
time but are largely independent statistically from the vagaries of the 
housing/mortgage market (which can crash as we know). The result is that one is 
not critically dependent on home equity for financial security in old age.

Debt-free home/farm ownership was a useful construct a century or two ago as an 
asset which could be passed on to one’s progeny who in turn could be expected 
to support their elders.  Capitalism that encumbered houses with debt (often as 
an acquisition method), along with consumer/consumption ethos and government 
loan guarantees, exploded post-WWII and morphed a house from a home to an 
“investment".

The counter-direction emerging today is the notion (besides adaptive rental) of 
a minimalist “tiny house”, often on wheels/trailer, that can be moved and 
clustered with others, where the underlaying land is the asset (possibly 
rented).  Whilst this works easiest in rural/suburban environments, cities with 
enough space are embracing the idea (e.g. Fresno, Portland, Detroit).

I speculate that a sustainable model for co-housing is a “village” of “tiny 
houses” clustered around a larger commons house — perhaps finding a property 
with substantial acreage and a pre-existing larger home.  A commercial 
developer would conventionally do a land split and build mortgage-enabled 
near-identical houses (think, Levittown or Pete Seeger “Little Boxes”) whereas 
a “tiny house” cluster village would be much less damaging to the environment, 
leaving substantial open space to till and enjoy.

We have worked our way into this box canyon by (emotionally) insisting on 
debt-encumbered home “ownership”.  Perhaps we can teach our children a better 
way.

=== Bill

William New
Still Creek
Woodside, CA