Edited by author 01-18-2004 09:22 PM
OK, Susan, I found the reference I was looking for. It's in "Fine Homebuilding" Magazine, Spring/Summer 2001, by John Abrams. It's about a co-housing project that Abrams and others put together on Martha's Vineyard.

Here are the key grafs on how they kept the housing affordable into the future:

"The core group of homeowners, which by this point represented 10 households, was committed to accommodating income diversity and providing desperately needed affordable housing. Therefore, we agreed that four houses would be deeply subsidized and sold to qualifying buyers who made less than 80 percent of median local income. Four more houses would be lightly subsidized to accommodate those for whom Vineyard housing prices are just out of reach. Here's how we subsidized the houses:

* Internal price structuring, which shifted a higher percentage of the shared costs (development and design costs, infrastructure and common facilities) to the larger houses. In other words, thoseof us who bought three- and four-bedroom homes not only paid additional construction costs but also paid a higher percentage of the shared costs of the project.

* Cash fund-raising (tax-deductible donations to the Island Affordable Housing Fund).

* Reduced mortgage rates from our two public-spirited banks (6 percent as opposed to 8 percent).

The four deeply subsidized houses also have limited-equity deed restrictions designed to maintain perpetual affordability by limiting appreciation and future resale prices. The two-bedroom homes appraised for about $200,000. We sold four of them for about $120,000 and wrote into their deeds that they must always sell for 60 percent of their appraised value. "

The limited-equity deed restrictions provide perpetual low-cost housing. This strikes me as a really sensible solution, far better than the "normal" system used here.