Hope for a gain just comes naturally for home buyers
The desire to make a profit is one of those basic human drives that you just can't ignore and certainly can't legislate out.
Lenin never figured that out, but the rest of the world eventually did.
Heck, it's the part of the glue that holds our crazy society together.
So trying to curb this ingrained yearning in the interest of keeping housing "affordable" is something only a true do-gooder would think could actually work.
Well, if you want more proof it doesn't, check out the abysmal sales record of government subsidized condos.
Built-in restrictions that cap gains for buyers when they eventually resell have left a small army of these affordable condos, all just built within the last couple years, sitting empty.
Basically, if you buy that fancy new $245,000 South End condo that I just saw advertised, you can't resell it anytime in the next 50 years for any gain larger than an adjustment for inflation.
The problem is pretty well documented, from a Globe article in 2008 to this Banker & Tradesman piece a few weeks ago.
At work here is a fatally flawed theory on how to create more affordable housing - with tragic results for a metro area that is destined to remain one of the most expensive in the country to live in.
It is a fear-driven concept that without taking away the allure of potential future profits, greedy buyers will simply turn around and resell subsidized condos at big markups.
Suddenly, that affordable unit becomes just another overpriced condo on the market.
So capping what buyers can resell will keep in place some badly needed affordable inventory, or so the argument goes, which will only grow over time as cities and towns mandate the construction of more subsidized units.
Nice theory, but completely wrong headed.
The resale restrictions have created a growing pool of empty affordable units. And the local nonprofits that built many of these have lost their shirts and are bailing out of the business altogether, Joseph Kriesberg, head of the Massachusetts Association of Community Development Corporations, tells me.
To be fair, many of these units no longer look as much of a steal now that prices have fallen and there are lots of even cheaper foreclosure specials out there.
Still, the result is certainly going to be fewer lower-cost units built over the next several years.
With prices still wobbly and maybe even headed for another plunge, why should any of these resale restrictions matter?
Because you can't force buyers to stop yearning for a gain someday - hope is another basic human characteristic that is unwise to dash.
A hard-headed former newspaper colleague recently considered buying one of these units, which unlike many foreclosed units, was stylish and brand new. And he would have, even though it was on the outer limits of affordability, but for the resale clause.
And sorry market bears, such expectations are not unreasonable if someone plans to sit tight for the next 10 or 20 years.
One proposal filed last year in the Legislature would have lifted the resale restrictions after a decade.
Makes a lot of sense, which means it won't go anywhere on Beacon Hill.
