Interesting program, I didn't realize some towns did such things. We've daydreamed about living in a ski town, but never gave it serious thought because there's no way we can afford the housing prices.vinn
, I did some rough calculations and a $250k 30-year fixed mortage at 5% APR would be $1500/mo. At 3% per year value appreciation, the house would be worth $606k once paid off. The total spend on the mortgage would be $540k, for a "profit" of $67k.
On the other hand, if we assume you rent for 30 years at $1000/mo, and save that extra $500/mo in a 5% APY savings account, you'd end up with $290k in the bank, after having spent $360k in rent, for a total "loss" of $70k.
Of course that makes some unrealistic assumptions (rent not increasing in 30 years? No homeownners insurance or property taxes?
) it shows you, I think, the power of being able to own an appreciating asset, even if its capped at 3%
Besides, from what I can tell, prior to this latest housing bubble, average annual home price increases for the nation were right in that 3% to 6% range, maybe up to 10% at times, so it's not like the deed-restricted owners are loosing out on much, except for the speculative market that made houses too expensive in the first place.