Even with all the publicity about subprime lending, real estate ownership in Northern California is taking unusual forms in order to adjust to prices that continue to put home ownership out of reach.

Practically a Darwinian process, survival for those seeking and offering housing has required all participants to think creatively and provide solutions that have in the past been unavailable and unthinkable.

The traditional form of real estate ownership has been the “fee simple” ownership of a single family home on a defined plot of land. You received your recorded deed with the bundle of rights and the uses that go with the property under the local zoning laws.

As time progressed, builders and developers realized that they could bring a lower cost housing unit to market by creating condominiums, or planned unit developments, where the land cost per unit was well below that of a single family home.

The pressures that have long existed on real estate in urban areas such as New York and Tokyo have now spread to San Francisco and are making their way to Napa. In order to adapt to the high prices of living units when demand far exceeds supply, consumers and providers have become innovators.

One creative method of purchase has been equity share purchases, where a parent or investor provides the down payment and the occupant is responsible for the monthly payment. Strong in income but short on cash, many first time home buyers need this type of support to enter the housing market.

A second adaptation for housing survival is various forms of fractional ownership that today are accepted in the conventional financial world. Fractional ownerships entitle you to a portion of ownership and limited use and enjoyment. In its most extreme form, a timeshare and in a more common form, the condominium.

A third form of fractional ownership is what is commonly known as Tenants In Common. This method of ownership has been common in San Francisco for years and is now being taken seriously by conventional lenders. For example, under TIC you would purchase one-fourth of a four unit apartment building and have the specified rights and use of your unit. Once defined, each of the four owners would have a 25 percent interest in the entire property and documents would be constructed to provide for maintenance and financial responsibility under a single loan that would be secured by the entire building. This form of ownership is common in allowing small investors to purchase large commercial properties.

Although difficult to create in the residential world, TIC financing is no different than funding a condominium purchase, a practice known and accepted in the world of finance. The fact that someone owns 25 percent interest in a building is no different than owning one condominium in a four-unit building. In Napa, there have been fractional purchases of homes by families and friends in order to afford the prices required to buy a home in the valley. Pooling incomes and down payments has created home ownership that has proven to be better than not owning at all.

Charles Bogue is a broker with Coldwell Banker Brokers of the Valley in Napa, where he offers real estate marketing services as the CB Team. Info, 258-5221, e-mail: cbnapa@napanet.net.