Prime Property Institutions for a Subprime Era: Toward Innovative Models of Homeownership

Berkeley Business Law Journal, 2011, 8, 1-34

34 Pages Posted: 11 May 2010 Last revised: 22 Jul 2018

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Amnon Lehavi

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law

Date Written: January 11, 2011

Abstract

This Article breaks new ground toward contractual and institutional innovation in models of homeownership, equity building, and mortgage enforcement. Inspired by recent developments in the affordable housing sector and in other types of public financing schemes, we suggest extending institutional and financial strategies such as time- and place-based division of property rights, conditional subsidies, and credit mediation to alleviate the systemic risks of mortgage foreclosure. Two new solutions offer a borad theoretical basis for such developments in the economic and legal institution of homeownership: a for-profit shared equity scheme led by local governments alongside a private market shared equity model, one of "bootstrapping home buying with purchase options."

Keywords: property, homeownership, mortgage, finance, local government, subsidy, tax

JEL Classification: D23, E62, H31, H71, K11, R31

Suggested Citation

Arruñada, Benito and Lehavi, Amnon, Prime Property Institutions for a Subprime Era: Toward Innovative Models of Homeownership (January 11, 2011). Berkeley Business Law Journal, 2011, 8, 1-34. Available at SSRN: https://ssrn.com/abstract=1601172 or http://dx.doi.org/10.2139/ssrn.1601172

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Amnon Lehavi

Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law ( email )

P.O. Box 167
Herzliya, 46150
Israel
972 9 9602765 (Phone)
972 9 9568605 (Fax)

HOME PAGE: http://www.idc.ac.il

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