Homeownership

From HousingWiki

"Owner-occupancy or homeownership is a form of housing tenure where a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live. This home can be house, apartment, condominium, or a housing cooperative. In addition to providing housing, owner-occupancy also functions as a real estate investment." -Wikipedia

Wikipedia prefers the term "Owner-occupancy" to "Homeownership," perhaps to emphasize that the point is not owning homes, but living in the one you own. 

As cultural and policy goal

 

Arguments for / benefits of homeownership

 

Issues with / critiques of homeownership

 

Homeownership assistance programs 

Mortgate interest deduction (MID)

 

Capital gains tax waiver on home sales

 

SALT (State and Local Tax deduction 

 

Owner-occupancy restriction

A requirement that a dwelling be only occupied by its owner's household, except for certain exceptional or limited-time case. It may be set:

  1. as a policy of a condominium board or Home Owners Association,
  2. as a policy on a development, for example by a non-profit Community Housing Development Organization on affordable housing.   
  3. by adding a deed restriction that permanently enjoins the property unless ruled illegal. 
  4. potentially, by a municipality, as an area-wide policy. [for example, via restrictions on Short Term Rental use]. 

in Allston-Brighton, Boston

Letter from Michelle Wu, Boston Councilmember

"Allston-Brighton is a distinct Boston community that is attempting not only to grow homeownership opportunities but is attempting to prevent the continued erosion of owner-occupancy in that area. The mere construction of a condominium does not create the likelihood of owner-occupancy in Allston-Brighton. It is well-known that absentee investors often buy condos in Allston-Brighton and simply treat them as rentals. Therefore, by not proposing significant home ownership opportunities - particularly home ownership with a high percentage of required owner-occupancy- the developmentis overwhelmingly likely to inject into Allston-Brighton's housing market more of the same type of housing that perpetuates the housing crisis and the decline of owner-occupancy in that area." August 26, 2019. http://www.bostonplans.org/getattachment/6bef440f-c3c6-4c8b-8399-becd5df8610e.

[Councilmember Wu also forwarded to YIMBYwiki the example of All Bright Homes program noted below]. 
 

All Bright Homes program (Allston Brighton CDC)

"In 2015, Allston Brighton CDC established the All Bright Homes program in partnership with Harvard Allston Task Force, Harvard University, Boston Community Capital, and the City of Boston. Our goal is to stabilize North Allston and North Brighton by increasing owner-occupancy in the neighborhood. By providing homebuyers more access to a much sought-after community, the program is designed to support the growth of owner-occupancy and to strengthen the vibrancy of North Allston and North Brighton.

"Allston Brighton CDC has the ability to act quickly when homes go on the market in the neighborhood in an effort to reduce investor ownership. We subsequently resell the homes to individuals or families who want to reside in the neighborhood. By placing an owner-occupancy deed restriction on the property, we ensure that each home purchased through the program remains owner-occupied in perpetuity. Eventually, if they choose to sell the property, they must sell to another owner-occupant who will also call this neighborhood home.

"North Allston and North Brighton offers residents the feel of a close-knit community with convenient access to local parks, the Charles River, cafés, restaurants, farmers markets, and art and music venues. Residents can choose to stay local and access nearby amenities, or, whether they walk, bike, drive or take public transit, be in downtown Boston, Harvard Square, or Allston Village in a few short minutes. With this program, we are creating opportunities for families and individuals who want to buy and enjoy all the amenities this neighborhood has to offer."
 

Comment from YIMBYwiki to Michelle Wu

in response to above letter and program example from Councilmember Wu, we commented (on Twitter): 

"Interesting topic, in that while we might prefer resident to absentee owners, on other hand owners tend to be higher-income & higher wealth than renters; and discrimination against renters is deeply rooted, pervasive, and in some contexts illegal. "if speculative ownership is the problem, then perhaps units should be deed-restricted to limit equity gains. That reduces 'ownership' mostly to use- and tenure rights, but perhaps those rights should just be added to rental occupancy."

 

Limited Equity Cooperatives

from "Limited Equity Cooperatives" page of City of Cambridge, Massachusetts, which has several buildings of this type that were created with assistance from the city. [Cambridge 2019].  Suggested by Molly Goodman @MollyRose_Good.
 

"Cooperatives, or “coops”, are a form of housing unit ownership that differs from the more common condominium form of ownership. Like condominium ownership, cooperative ownership is a structure through which several owners jointly own a building comprised of multiple units. In a condominium, each owner holds a deed to their individual unit, as well as an interest in the building’s common areas. In a cooperative, a corporation owns the entire building. The corporation is made up of “shareholders”. Each shareholder owns shares of stock in the corporation which come with the right to live in their unit. When a buyer purchases into a coop, they are buying shares in and becoming part of the ownership corporation." "There are also several limited-equity coops in Cambridge, created with assistance from the City prior to the end of rent control. These limited equity coops have income limits for new shareholders and restrictions on the increase in value of each share of stock. Each coop is managed by its residents according to its own set of bylaws, which govern the how the coop is run.   "When a limited equity coop has a vacancy, the coop itself offers the unit to new applicants and reviews applications from prospective members. The City often assists coops in reaching out to residents who may be interested in applying. However, each coop is responsible for choosing the applicant to whom they offer the unit and available coop share(s). The application process often includes several interviews with coop members. "Coops are financed differently than condominiums. There is usually a “buy-in” price that covers the value of the share(s). Banks generally do not provide mortgages for these share purchases, but certain coops offer “share loans” to cover a portion of the share purchase. Applicants looking to purchase coop shares need to have funds to cover all or a portion of the share purchase price. "Shareholders also pay a monthly “carrying charge” that covers certain coop expenses, including maintenance, insurance, taxes, and payments on loans held by the coop as a whole. The carrying charges for limited equity coops are based on the coop's costs, not the individual shareholder’s income. For most limited equity coops, Section 8 vouchers can be used to pay the carrying charge in the same way as rent."

 

 

References

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