In 10 years, this becomes the new “racist redlining”.
What starts out as a creative solution to get low income people into housing becomes “locking people of color out of real estate wealth creation”, particularly if the 3rd parties who end up buying equity positions in people’s homes wind up being banks or hedge funds. I can see the hysterical headlines now.
Taxpayer subsidized down payments for home buyers.
They can accomplish this because the language of Prop 13 makes it difficult to determine exactly when a property trades hands if more than one person/entity has an interest in the property before and after the transfer.
Shared equity housing may be a way for homeowners to avoid reassessment when houses are transferred just like large corporations.
This could be a game changer for California and Prop 13.
Wasn’t it just a week or so ago we were told millenials don’t want to own homes and stuff?
When it does, maybe the younger set will be able to buy in. Until then, the gimmicks are just redistributing the wealth the rest think they have.
There’s actually something to be said for this approach, but only if you accept the idea that a home should not be seen as an “investment.” A home is a home, and that’s it. It’s nice if you can sell it for a lot more money than you paid for it, but this country’s housing bubble was largely driven by investment-driven considerations that never should have been part of the conversation.
I would hope the wave of the future is reasonably priced houses.
A thousand square feet of plywood is about 30 sheets at maybe $20/sheet - $600.
A house might have $5,000 worth of wood in it. It might cost $4,000 for labor to frame that wood.
A mason should be able to lay 200 big concrete blocks in an 8-hour day. So maybe that’s $2/block laid. A 30x30 house has 120 linear feet with maybe 90 blocks, or $180 every 8 inches of foundation. With maybe 12 layers of 8-inch blocks that’s 12x$180 or about $2,300.
So we have $11,300 for foundation blocks and rough frame carpentry.
Houses in many areas in the country are severely overpriced.
Maybe mortgage companies should have their lending people learn to estimate the construction cost of a house (and insist potential mortgagees learn to estimate the construction cost of a house by taking an online course.
Just making people who are not responsible enough to save up a down payment into homeowners can mean a new Detroit or Newark in a decade or two.
I’ve seen plenty of houses trashed in Florida by “homeowners” without a true stake in the property after the Bush boom.
Perhaps the Islamic partial purchase method where people buy about 3% a year and rent the remaining 97% (and 94%, 91%etc.) could be used instead. The Islamic gradual purchase method totally prevents people from getting underwater. I believe it is sometimes used in Britain.
If only there was something the government could do to force lenders to sell houses to people with no down payment or provable income.
This has nothing to do with housing and everything to do with propping up housing prices.