Andrew Caplin, Sewin Chan, Charles Freeman & Joseph Tracy
A revolutionary housing finance concept can help many more Americans buy the homes of their dreams, while simultaneously furnishing vast, new investment opportunities for financial institutions and investors. The idea: enable consumers to purchase part of a home through a new type of financing called Housing Partnership agreements.
Housing Partnerships: A New Approach to a Market at Crossroads provides a blueprint for the development of this alternative housing finance market, and offers a new and compelling housing finance option: instead of the existing two housing options -- renting or buying an entire dwelling -- would-be home owners can finance a percentage of a property, while the other portion is financed by institutional investors, who provide capital for the house in exchange for a proportion of the final sale price.
The home buyer (Managing Partner) and a financial institution (Limited Partner) would each own a fixed proportion of the home, resulting in co-ownership of the property. The Managing Partner would live in the entire home and when the house is sold, potential proceeds are split with the Limited Partner.
Housing Partnerships: A New Approach to a Market at a Crossroads proposes adapting the same legal form used successfully by commercial enterprises for the residential housing market. Why can't individual home owners, just like businesses, avail themselves to the benefits of this type of ownership? Why is the U.S. housing market the only one in which there is no way to sell any part of the return stream to other investors?
Housing Partnerships: A New Approach to a Market at a Crossroads has ideas to interest a range of readers, from prospective home buyers to realtors, from financial investors to those interested in housing and social policy development.