Affordability

Several key strategies will enable Ramona Village homes to be affordable without public subsidies or governmental programs.  The most important of these is land ownership:

•  The Village will utilize an innovative land ownership structure not found on the open market.  The University owns the land now, and will continue to own it forever.  Only the homes will be sold.  Buyers will own the improvements on the lot (i.e., the house), but will lease the land.  Refer to the Ground Lease description for more details.
• There will be a monthly ground rent payment, but it will be far less than the equivalent cost of purchasing the land.

Other affordability strategies reflect reduced ownership costs of Village homes:

• The reduced energy consumption due to green construction and sustainability technologies will help keep monthly expenses low.  Monthly costs will be less than similarly-sized homes with conventional electrical and HVAC systems.
• “Green mortgage” programs rely on the lower monthly energy costs of high-efficiency homes to augment the homeowner’s borrowing power, making it easier to qualify for financing.  We will seek to make green mortgages available to Village homebuyers.
• Mortgage programs that assist borrowers with closing costs, down payments, and interest rate reductions will also be sought out.
• We are exploring the possibility of providing comprehensive homeowners’ insurance to the entire village as one package.  This should cost less per home than individual policies.  If a suitable arrangement is reached, the proportionate cost will be incorporated into the community maintenance fee.

• Because the Village is so close to campus and handy to the rest of Sacramento, residents will not need to drive their cars nearly as much as non-residents do.  They will save by purchasing less fuel, tires, and maintenance for their vehicles.  In addition, we are seeking the participation of a car-sharing company to have vehicles available in the Village for occasional use. This may enable residents to eliminate a car or two from their household. For more information about car-sharing, visit Flexcar.com or Zipcar.com.

• Some homes will have "flex" rental units attached.  If the owner so desires, s/he can rent the flex unit out as either a studio apartment, office, or retail storefront, thus generating some rental income.

• To ensure that the homes will remain affordable for subsequent buyers (even if the real estate market heats up again), the ground lease will contain a formula for determining resale amounts.  Appreciation will be tied to the Consumer Price Index, not allowed to float with the real estate market.  The homeowner’s equity will increase over time just like any other home, as regards home improvements and continued mortgage payments, but market equity appreciation will be limited by the land lease.  Unlike the market, though, the Ground Lease stipulates that it will never be negative.