Limited Equity Cooperatives: The Non-Economic Value of Homeownership
Julie D. Lawton
DePaul University - College of Law
December 3, 2013
Washington University Journal of Law and Policy, Vol. 43, No. 187, 2013
DePaul Legal Studies Research Paper No. 14-03
This article evaluates the meaning of homeownership for low and moderate income residents who live in a homeownership model that does not provide equity appreciation. For many Americans, wealth creation is one of the major reasons for home ownership. Federal and local governments have for years looked to wealth creation as a means of helping low and moderate-income residents become self-sufficient. However, for many low and moderate income residents, homeownership is not an easily obtainable goal since many low and moderate-income residents have neither the income, nor credit, to qualify for a mortgage for a condominium or single family home. To combat these problems, some affordable housing proponents advocate for alternatives to traditional fee-simple ownership, such as community land trusts and housing cooperatives. One of the major criticisms of these types of homeownership is that they are structured to restrict equity appreciation to promote long-term affordability, and, thus, undermine the value of homeownership. This Article examines one of these alternatives, the limited equity cooperative, to evaluate the non-economic value of homeownership and to help understand why this homeownership model is still valued as homeownership for these owners who have no hope of equity appreciation.
Number of Pages in PDF File: 40
Keywords: Housing cooperatives, Cooperatives, Limited Equity Cooperatives, Coop, LEC, Homeownership, urban economics, real estate, propertyAccepted Paper Series
Date posted: January 14, 2014 ; Last revised: March 12, 2014
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