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
- 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.