Financing

In most cases, resident investment will account for a relatively small portion of a project's total financing.  Residents may be able to make only a modest expenditure on stock, in the range of $10 - $100 per share, and many residents will not have the resources for even a small investment.  The CDC will need to work with their community to assess the price of individual shares according to the means of residents.

The CDC must pay for the legal costs incurred in offering stock. The CDC may incorporate these costs into the share price.  Alternatively, a CDC may work to cover these costs through philanthropic or public support for resident ownership opportunities.

There may be innovative ways to assist or even to partially "subsidize" resident investment-for example, through a proposed variation on the Individual Development Account (IDA) concept that would include investment in real estate as an approved use of account-holders' accumulated savings.  This expanded IDA concept is still in the conceptual stages; further exploration is needed to assess its promise as a strategy for supporting resident investment in community real estate assets. See the PolicyLink report Sharing the Wealth: Resident Ownership Mechanisms.