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The Harms of Liminal Housing Tenure: Installment Land Contracts and Tenancies in Common

Journal of Affordable Housing & Community Development Law, 2021-01, Vol.29 (3), p.523-534

COPYRIGHT 2021 American Bar Association ;Copyright American Bar Association 2021 ;ISSN: 1084-2268 ;EISSN: 2163-0305

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  • Title:
    The Harms of Liminal Housing Tenure: Installment Land Contracts and Tenancies in Common
  • Author: Schindler, Sarah ; Zale, Kellen
  • Subjects: Affordable housing ; African Americans ; Analysis ; Apartments ; Buildings ; Common law ; Condominiums ; Conversion ; Demographic aspects ; Economic aspects ; Hispanic Americans ; Home ownership ; Homeowners ; Homes and haunts ; Housing ; Installment land contracts ; Interpretation and construction ; Land tenure ; Law ; Laws, regulations and rules ; Legislation ; Liminality ; Minority & ethnic groups ; Neighborhoods ; Ownership ; Predatory lending ; Property law ; Property rights ; Purchasing ; Residential buildings ; Tenancy in common ; Tenants
  • Is Part Of: Journal of Affordable Housing & Community Development Law, 2021-01, Vol.29 (3), p.523-534
  • Description: [...]while the use of TICs to avoid condo conversion laws has long been associated with the high-priced San Francisco housing market,3 they have become more widespread as housing costs increase in other areas of the country.4 And while lower-income communities of color have long been targets of ILCs, in recent years, ILCs have penetrated a greater variety of housing markets:5 Firms that focus on ILCs and closely related rent-to-own arrangements have attracted Silicon Valley venture funding,6 and secondary markets have developed for investors to buy and trade these types of properties.7 We argue that the growing prevalence of TICs and ILCs is part of a larger, previously unrecognized pattern that we have identified wherein the law offers more protections to homeowners than to similarly situated tenants and other non-owners. Doing so essentially ensures that the individual cotenants in the TIC each have the functional equivalent of a privately owned condominium, but at the reduced cost of a TIC. [...]b]y purchasing apartments as TICs and agreeing to live in the separate units, individuals have been able to circumvent the condominium conversion restrictions by creating de facto condominiums. [...]this sale effectively removes those former rental units from the local supply of apartments.17 The result is that renters lose their homes, while the TIC purchasers gain a (comparatively) inexpensive place to live.18 In response to this trend, some governments have attempted to impose moratoria prohibiting TICs for larger buildings, given that they have the potential to decrease the amount of rental housing stock, just as condo conversions do.19 But using legislation to limit conversion from a rental property to a TIC will likely face an uphill legal battle in the form of a takings challenge.20 According to the U.S. Supreme Court, regulations are more likely to work as a taking if they infringe on "established property rights. "21 TICs are a traditional form of common law property ownership, and thus they would squarely fit within an "established property right," making any ordinance that limited the use of TICs vulnerable to a takings challenge.22 As a result, traditional property law doctrine protects the rights of the building's initial sole owner in her sale to a group of new co-owners, and protects those new cotenants as owners of an established property right, but fails to protect the building's existing rental tenants, who will wind up being removed from their rental units.23 Thus, the treatment of TICs under the law rewards ownership and harms tenants, contributing to gentrification and a lack of affordable rental units in neighborhoods where this structure has become popular.
  • Publisher: Chicago: American Bar Association
  • Language: English
  • Identifier: ISSN: 1084-2268
    EISSN: 2163-0305
  • Source: ProQuest Central
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