Can the Resale Housing Market Be Split to Facilitate Long-Term Affordability?

32 Pages Posted: 28 Jan 2014

See all articles by Amnon Lehavi

Amnon Lehavi

Reichman University - Interdisciplinary Center (IDC) Herzliyah - Harry Radziner School of Law

Date Written: January 27, 2014

Abstract

This paper argues that a comprehensive affordable housing policy requires the formal splitting of the homeownership market into (at least) two distinct segments: one designated for the general public and following a conventional market pricing mechanism, and the other designated for eligible households and controlling both initial supply and subsequent sales of housing units through regulated affordability-oriented pricing mechanisms. To facilitate the systematic design of an affordable housing segment that remains intact upon household turnover, the paper introduces two alternative cap-on-resale mechanisms: “Mixed Indexed Cap” (MIC) and “Pure Indexed Cap” (PIC). It explains how such models could promote long-term social mobility, allowing multiple low- and modest-income households to engage in capital building by sequentially enjoying increments of appreciation of properties in the affordable housing segment.

Keywords: affordable housing, capital building, inclusionary zoning, property tax, real estate

JEL Classification: D47, H31, R21

Suggested Citation

Lehavi, Amnon, Can the Resale Housing Market Be Split to Facilitate Long-Term Affordability? (January 27, 2014). Available at SSRN: https://ssrn.com/abstract=2386212 or http://dx.doi.org/10.2139/ssrn.2386212

Amnon Lehavi (Contact Author)

Reichman University - Interdisciplinary Center (IDC) Herzliyah - Harry Radziner School of Law ( email )

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

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