How Community Land Reserves run by a board could provide affordable housing in India’s cities

The big difference between a Cooperative Housing Society and a Community Land Reserve is that appreciations in land value over time accrue differently. In the Cooperative Housing Society, this appreciation goes to individuals while in the Community Land Reserve it goes to the community.

The difference matters most dramatically in the way such accruals in value are dealt with when there is a change in ownership of an apartment. In the Cooperative Housing Society, the outgoing occupant walks away with an unearned bonanza of windfall profit, which is entirely consistent with the philosophy of extreme capitalism. In the Community Land Reserve, the outgoing occupant recovers his investment in the property (principally construction and repair cost), adjusted for inflation, but no share of the appreciation in land value.

That belongs to the Community Land Reserve, which is now able to offer the incoming new occupant ownership of the apartment at a price that continues to be affordable to low-income citizens because it excludes the cost of land.

How do we manage a Community Land Reserve in such a way that it does indeed remain a low-income locality and is not taken over by middle- and higher-income residents wanting to take advantage of lower capital costs or lower...

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