Should Home Buyers Be Looking For Co-Investors?

• November 21st 2011

by Shilpi Paul

Atlantic Cities spent the better part of last week mulling over the younger generation’s housing conundrum. In “The Anxiety of the Forever Renter,” DC resident Emily Badger shared her conflicting desires; to move to Portland on a whim, but also have a home that she feels like she can make her own. She’s aware of the risks of homeownership, but still wants freedom from a landlord’s careful watch.

Shows like My So-Called Life and movies like American Beauty may have soured some on suburban life, and the housing market crash made a mortgage seem more like an albatross than a wise investment. The new world order is supposed to reward adaptability and create more global citizens. But while we’re here, we want a place we can call home.

So, is there a way for Generations X and Y to be temporarily settled?

Atlantic Cities found one compromise: housing partnerships. The idea, from New York University economics professor Andrew Caplin, is that homeowners find co-investors to share ownership of a house, like the stock market. The homeowner would live there, but the co-investors, who Caplin imagines might be parents, employers or just interested investors, would own shares in the home.

When the owners wanted to sell, all the investors would keep a share of the selling price. The theory is that the owner wouldn’t take on more than they can afford, keeping default rates low. The investors share the risks and the rewards, and the owners get to paint, renovate and generally feel like it is their home.

Sounds like Caplin’s plan might work for some people. The problem? He says that current tax and property laws make the execution of the theory almost impossible. Nevertheless, he continues to lobby for the plan.

This article originally published at https://dc.urbanturf.com/articles/blog/should_home_buyers_be_looking_for_co_investors/4619.