What if service-industry wage earners could own a home, without relying on government subsidies? In the Bay Area, the median household income is around $100k, but the median house price is something crazy like $750,000 or even $800,000. There is talk of creating 40, 60, and 100 year mortgage products. Yikes! Wage earners with a houshold income of $80k per year can't afford a 30 year mortgage on a $800k house, and so they rent. I'm in that boat. I hate being in that boat.
It's important to find an answer. Our civilization can either build "affordable" Sprawl (at the expense of our children's future) or we find a way to have urban areas remain affordable. I hate more government involvement, don't think we need more entitlement programs, so is there a creative solution?
I can afford a mortgage of about 2/3 the value of the this house. So I'm going to ask my landlady to hold a deed for the remaining third. She'll get a big chunk of money now, and a future bit of money when the house is sold later. As the house continues to appreciate and I pay off the loan, I'll finally be acquiring some equity in a piece of real estate.
See how that works? I hope to "own" a house at a rate I can afford. I call this a market solution to affordable housing because it separates the price of a house from the ownership of a house. Private individuals wanting to own property could negotiate their percentage of split, from 51/49 to 66/34 to even 80/20. A household with an income of 50% of the regional median could still "own" a house.
Why would private individuals be interested in co-owning a house with people who are earning a near-living wage? For one thing, it keeps just-below median income people part of the community, it keeps their children in the area schools, it slows down Sprawl development, it even encourages local economic growth because all the ties are to the local area. If a person has to commute 20 or 30 miles to their job, they pass plenty of opportunities to do their shopping outside of where they work. If the commute is across town, then where will all the groceries, lightbulbs, and fuel get purchased? Right here in town! Live, work and shop local!
We are meeting tomorrow. I'll let you know how that goes. You can hold good thoughts for me, if you are so inclined.