How to Reduce Housing Costs by 80% in 20 Years

The primary beneficiaries of the homeownership structure used in the U.S. since 1950 have been finance organizations and energy companies, not homeowners. Just interest on a 30 year, 6.5% mortgage costs 28% more than the cost of the home. Energy operating costs also equal or exceed construction costs. There are three primary (and roughly equal) components to our housing costs:

Permanent community ownership of homes through a Housing Trust can:

  • Stop inflation/market increases in BOTH land and housing prices on trust owned land and housing. At our historic 3% inflation rate, prices double in 20 years. Therefore trust ownership can, in effect, cut the comparative purchase price of homes in half in 20 years.
  • Eliminate (in 20 years) the finance component of trust-owned land and housing costs. This equals a reduction in housing costs in perpetuity equal to the entire capital cost, where a trust owns structures.
  • Eliminate cumulative transfer costs on trust-owned land and housing. Where both house and land are trust-owned, this would amount to 1/3 of the purchase cost of a house over a lifetime.
  • Thus in 20 years, the capital and finance costs of a house can be reduced:
    • 50% through elimination of finance costs,
    • another 25% reduction through escaping market inflation, and
    • another 8% through avoidance of transfer costs.

Together this new homeownership structure results in 83% reduction in capital/finance costs.