CIFT Links: Fractional Homeownership
What’s needed is a groundbreaking approach that prevents foreclosures and increases the affordability of the existing housing stock, thus increasing housing demand. Both of these issues can be addressed with a simple, yet radical, innovation: fractional homeownership.
The biggest question here is the appetite for the new securities that John proposes:
Institutional investors, such as those who manage pension and endowment funds are interested in HEFIs to achieve diversification beyond stocks and bonds.
Do they really want exposure to that asset class right now? Not likely.
John O’Brien is codirector of the Center for Innovative Financial Technology and faculty director of the Master’s in Financial Engineering Program at the University of California Berkeley’s Haas School of Business. He’s also managing partner at Home Equity Securities LLC.