In part 7 of this 10-part, more or less, series on co-housing, I described briefly the concept of fee title ownership in a land trust, with dwellers in a community paying periodic “occupancy fees” while being stripped of the direct burdens of ownership like payment of taxes and obtaining and maintaining homeowner’s insurance, mowing the lawn, trimming the green stuff and cleaning the swimming pool. Of course, there is no single “perfect” mechanism for a community’s co-housing land title ownership; the objective should be to choose a way for a community that may visually resembles today’s plain vanilla housing development but vests title in a single ownership. That’s not essentially a radical notion. Condominium ownership provides that a dweller owns “air space” residing between each coat of paint on the interior walls of the living structure, and an undivided interest in common elements; no individual condominium “owner” actually owns any building outright. Instead, these buildings belong to the condominium association. Cooperative apartments, popular along parts of the Eastern Seaboard, are multi-unit buildings whose residents own stock (as shareholders) in the fee-owning corporation but make a lease of their occupied units. Individual dwelling “pads” with utilities connections to a central service may be ground-leased by a single fee-title owner. I suppose that this most nearly resembles the familiar mobile – home park. Installment contracts for land transfer permit the gradual vesting of legal title (a device to secure the seller’s payment stream) but the immediate granting of equitable ownership to the purchaser.
What makes a land trust distinctive is two things. First, the process of forfeiting the interest of the Trustee by the control party is simplified by the terms of the contract. Second, the control party – the trust beneficiary that controls the actions of the fee title owner during the period of the payment of the acquisition price – can be anonymous in a fashion that few other fee ownership structures permit. That latter fact facilitates both absentee and corporate ownership of land. Of course, such mechanisms might encourage the gradual consolidation of land ownership in increasingly fewer hands. This leads to the question whether co-housing controlled by land trust beneficiaries would cause the resurgence of a “landed aristocracy?” A question of substantial weight, is this; after all, we’re living in a country built on the pioneering concept by immigrants for most of whom land-ownership was the impossible dream in the homeland and families they abandoned to move into America’s “interior.” Many Americans took the history courses in middle and upper school grades where this idea was drummed home (or that effort was made, anyhow). And Americans continue to be inspired by the idea of some day owning their own home, complete with a tranquil piece of land skirting the cement slab foundation. (They need to abandon the inspiration to own a second and third home that they can use as investment property and live from the cash flow. Mostly, Americans don’t know how to make that work successfully for themselves.)
The answer to the question is, yes, consolidated ownership among a class of wealthy landowning individuals is a possible outcome. But another possible outcome is the growth of land trusts (or other, similar cooperatives for joint land ownership) for conservation. Here, groups of individuals will pool individual fortunes to purchase and preserve the character of communities by limiting the amount of asphalt and concrete and “vegetation wastelands,” like the multicolored pea gravel yards with a token palm tree in full bloom in some arid, southwestern U.S. urbanized areas. I don’t believe that consolidation of ownership of development tracts requires a resulting increase in land prices rendering land unaffordable except to the very well-to-do. Land trusts are often controlled by groups of persons. In the instance of trusts formed to preserve, for example, scenic landscapes or properties of historic character, the trusts have more in mind than profit from leasing. No doubt tracts of substantial size will soon be of reach of some cash-rich persons. Land has become unaffordable, however, as a result of committing to more obligations than ordinary borrowers can manage to pay with their current earnings, which leads to insolvency. (National Public Radio broadcast a show on Thursday, January 14, where the reporter stated that more than 10 million households in the U.S. have underwater mortgages – that is, homes that are worth less in value that the mortgage payer owes.) Those insolvent (unable to pay the sum of their obligations as they become due) inevitably take a hit in their credit ratings, rendering debt for subsequent home purchases unavailable to them regardless of its price.
One fallout from consolidation of ownership in co-housing scenarios may be the death of power vested in homeowners’ and similar property owners’ associations presently governing most residential housing communities. When fee title to the land is controlled by an individual owner or handful of owners, the dwellers’ representation – or tyranny of the minority, as some regard it today – will be held in check by the power of the purse. There is little for the fee holder to gain from a high dweller-turnover rate (unless the fee owner imposes and collects some kind of breakage fee upon each departing dweller) or from vacancies occasioned by warring factions within a co-housing community. Vacancies either redistribute the common amenity and utility costs among those who remain in the community or compel the fee holder to shoulder those unreimbursed costs. It seems more likely, therefore, that a recurring investor’s property manager (or his/her staff) will collect assessments and enforce rules dispassionately and professionally, with an air of detachment that avoids intra-neighborhood hostilities.
This sort of co-housing organization argues for a thoughtful conceptualization of the co-housing community and the adoption of regulations for its dwellers that avoid conflicts in obvious areas (e.g., sport court lights illuminated after a certain hour of night) without impinging unnecessarily upon individual occupant freedoms (e.g., dictating a narrowly – confined color palette for exterior wall coverings or the hours during which certain vehicle types may be parked in plain view). I doubt the latter sort of “democracy” will be sorely missed if the POA becomes a dinosaur. Thoughtful dispute – resolution rules of engagement among dwellers, if enforced, will minimizing “pining for the good old days” of hostile POA board or annual owners’ meetings, where fights over a fine levied because a dweller’s basketball hoop was seen in the wrong place on his lot constituted an evening’s entertainment.