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Photo: David L Ryan/ Globe Staff.
Homeowner Paul E. Fallon hopes to inspire others to bequeath their homes to an affordable-housing nonprofit that will help moderate-income families in Cambridge, Mass., to build wealth through homeownership.

As much as I believe that lack of homeownership is a major cause of inequality, keeping many lower-income families from passing on their nest egg to another generation, I could never bring myself to do what Paul E. Fallon recently committed himself to doing. He’s really putting his money where his mouth is. And his children are amazingly supportive.

As Jon Gorey reported for the Boston Globe, “When Paul E. Fallon purchased a Victorian four-family in Cambridge nearly 30 years ago, he wasn’t angling to become a minor real estate tycoon. But he wanted to raise his children in the city, and a single-family home was, even then, more than he could afford. ‘I bought it when a four-family house in Cambridge was a pariah because it was under rent control,’ Fallon said. ‘There was no crystal ball in 1992 that told me this house was going to make me rich.’

“But it did. Fallon lived in one unit and rented out the others, first under rent control, then at fair market rents. Now a single man in his mid-60s, the writer and retired architect owns his property outright. … In just one generation, his home in what had long been a middle-class neighborhood of plumbers and electricians has become a multimillion-dollar asset.

“That makes Fallon uncomfortable as he sees young families, especially people of color, unable to plant the kind of roots in Cambridge he did. His own children, despite being well-launched in good careers, he said, could never afford to buy the house they grew up in now. ‘Cambridge’s vanishing middle class makes my city a less diverse, less dynamic place to live’ he said.

“So when he turned 65 last year, … Fallon realized he wanted to do something very different with his property. He decided to leave his house to a local nonprofit when he dies. The goal is to create not just affordable housing, but long-term generational homeownership opportunities for four Cambridge households. …

‘I don’t just want to give people a secure place to live; I want to give the opportunity for people to be in the middle class, to accrue equity, to be able to pass the house down to their own children if they want to … to really build wealth.’

” ‘The difference between the haves and have-nots in the United States is largely a matter of who owns their house,’ Fallon added. … ‘I feel like if we’re going to be serious about creating a more equitable world, then those of us who have more than we need have to spread our wealth. We can’t just talk about it.’ …

“Fallon first wanted to make sure his two adult children were on board with his idea, even though it meant they would be losing out on a significant portion of their inheritance. But that, too, was part of his plan. ‘My house is worth so much money that, if my children inherited it, they would be living on Easy Street. And I’ve never met anyone who inherited wealth that wasn’t changed for the worse as a result,’ Fallon said. Gratefully, his kids understood where he was coming from. ‘They’ve spent their whole lives around me — they were not surprised,’ he said.

“He then sent letters to eight Cambridge nonprofits explaining his still-nebulous idea in vague terms — big on concept, short on logistics. After interviewing a handful of them, Fallon landed on Just-A-Start, a 53-year-old Cambridge organization that develops and manages affordable housing and offers youth programs, job training, and other economic advancement services.

“ ‘Just-A-Start really got it,’ Fallon said. Their goals aligned with his, and he felt confident they would still be around when the time comes to implement his vision. ‘They understood that what I’m trying to do is to help Cambridge be a more diverse place, a more equitable place,’ he said. …

“When Just-A-Start executive director Carl Nagy-Koechlin received the inquiry, he recognized Fallon’s name; they had worked together on an affordable housing development in Somerville a few years prior. He also realized that Fallon’s explicit instructions — that the house be used for homeownership opportunities — would help fill a key gap in the city’s affordable housing stock. ‘Most of the housing we’ve developed is rental housing, and that’s because it’s needed — but also because the financing sources for affordable housing are skewed in that direction,’ he said. …

“Fallon and Nagy-Koechlin spent a few months hammering out the details into a memorandum of understanding, which Fallon then brought to [Gregory Pearce, the Cambridge lawyer who assisted Fallon with his estate plan] to review. ‘All the heavy lifting was done before it got to me,’ Pearce said. ‘All I really had to do was to make sure that the plan is actually going to happen upon Paul’s death.’ That meant establishing an estate plan and selecting a reliable trustee to make sure Fallon’s wishes are faithfully carried out.”

Read the details about how this is going to work, here.

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