Tenancy In Common: Why is It Affordable, And Some Might Say, Detestable?

view of Echo Park Lake in Los Angeles
Echo Park Lake - Los Angeles, California photo by Nightcrafter is licensed under CC BY-SA 4.0
Echo Park, a popular area for Tenancy In Common homes

Tenancy In Common? Well, first we need to make liars out of ourselves by admitting that it’s not really affordable, at least not so far as affordablehousingaction.org is concerned. That’s because we’re primarily concerned about exploring options for those in the lowest income brackets who need truly affordable housing, in line with 30% of a low, even minimum wage, take-home income.

Tenancies in Common are on the rise in Los Angeles, California. It’s a way of making home ownership more affordable for the middle-class who are pressed to find the money for the housing they want, but have larger income resources available.

Unlike condos, purchaser of a Tenancy in Common does not own a unit. Instead, they become a co-owner of the building that owns rental units. A purchaser is therefore not a homeowner, but a renter of a housing unit guaranteed for life.

Why is it affordable?

Legal complexities make it less attractive to buyers, as well as finance companies, reducing the cost of the unit compared to a similar condo purchase.

Why might some find it detestable?

It is an attractive way for landlords of existing multi-housing units to escape rent control. Turfing out sitting tenants may be part of buying into a Tenancy in Common.

Tenancy in Common has been used in San Francisco for many years. Rising prices in Los Angeles are making it a more attractive alternative there as well.

Read more in the Los Angeles Times1You can buy ‘cheap’ in L.A. But you won’t own your home and may oust a renter

Footnotes

  1. The Times has a paywall, but it appears to allow ‘outsiders’ some free reads.