How We Determine Land Value

If you’re researching the Jubilee Joint Purchase Program, you’ve probably found yourself asking one very specific, very important question:

"Okay, I get it. I buy the house, you buy the land. But… who actually decides what the land is worth? And if the land ends up being worth way more than the house, do I lose out on all that growth?"

It is one of the most common questions we get. Honestly? It is the right question to ask. When you are entering a partnership that splits a purchase, you need to know the math is fair, transparent, and built to benefit you.

The short answer is: We don't guess, and you don't lose out.

But the long answer is it involves respected data sets in housing policy and a financial structure designed to make sure you win when the market wins. Here is exactly how we set that number, and why that starting percentage doesn't put a cap on your financial future.

Part 1: The Methodology (We Don't Guess)

We believe that for a partnership to work, it has to be objective. That means we don't sit in a conference room and guess what the land is worth. We don't use "gut feelings," and we certainly don't negotiate it on a deal-by-deal basis to squeeze out extra margin.

Instead, we use independent, third-party data from the American Enterprise Institute (AEI) Housing Center.

Why AEI?

The AEI Housing Center is a nonpartisan public policy think tank based in Washington, D.C. They are widely considered the gold standard for granular housing data. They don't take government funding, they don't do contract research, and their data is used by policymakers across the country to understand true housing value.

Specifically, we use their Land Share Indicators. This dataset looks at millions of homes and calculates land value using a method called "Residual Land Valuation." Essentially, they take the total market value of a property and subtract the depreciated replacement cost of the structure. What’s left? The value of the dirt.

How We Apply It to Your Home

When you look at a home with Jubilee, we use a strict hierarchy to find the most accurate Land Share percentage for your specific location:

1. County Level: First, we look at the specific data for your county. If AEI says land in your county typically represents 60% of property value, that is our baseline.
2. Metro Level (CBSA): If county data isn't available (common in rural areas), we zoom out slightly to the metropolitan area.
3. State Level: As a final fallback, we use state averages.

We also apply strict caps to protect you. Even if the data suggests a massive land value, we cap the land share (typically at 70-75% depending on the property price) to ensure you always retain a meaningful ownership stake in the home itself.

This keeps the process transparent, verified, and completely removed from our opinion.

Part 2: The Deeper Truth (It’s Just a Starting Point)

Now for the part that usually surprises people. While we use rigorous data to set that initial percentage, the specific split matters less than you think.

Why? Because the initial split is simply the partnership ratio that gets you into the home. It determines who brings what cash to the closing table today, but it does not stop you from benefiting from the growth of the whole property tomorrow.

Many buyers worry that if Jubilee owns 60% of the property (the land) and they own 40% (the house), they are stuck with a fixed asset while the land skyrockets in value. That is not how it works.

The Vintage Car Analogy 🏎️

Think of it like restoring a vintage car with a partner.

Let’s say you have the skills and the drive to fix up a classic car, but you don't have the capital to buy the car itself. So, you partner with a friend.

• Your Friend puts up $30,000 to buy the car.
• You invest $20,000 of your own money (plus your time) to fix it up.
• Total Investment: $50,000.

This means your friend contributed 60% of the starting value ($30k/$50k), and you contributed 40% ($20k/$50k).

Now, let's look at two ways this pays off:

Scenario A: Selling for a Profit Fast forward two years. Because of the work you did and the market getting hotter, the car is now worth $100,000. When you sell, you split the new total value based on your original contribution.

• Friend gets 60%: $60,000.
• You get 40%: $40,000. Even though your friend "owned" the bulk of the initial asset, your investment doubled because the value of the whole car went up.

Scenario B: The Buyout Let’s say a few years go by and you get a big bonus at work. You decide you love this car and want to keep it forever—without a partner. You can simply pay your friend the current market value of their 60% share. Once you write that check, the partnership ends, and you own 100% of the car outright. The partnership was just the bridge that helped you get behind the wheel.

Part 3: How This Applies to Your Home

It works exactly the same way with Jubilee.

Imagine you are buying a home for $1,000,000. Based on the AEI data for that county, the Land Share is 60%.

At Purchase (Day 1):

• Total Value: $1,000,000
• Jubilee pays: $600,000 (The Land - 60%)
• You pay: $400,000 (The House - 40%)

Because Jubilee covered the land, your down payment is calculated on the $400k, not the $1M, making it much easier to afford.

The Exit Strategy (You Have Options):

Option 1: Sell and Share the Gains If you sell in Year 10 and the home is worth $1,500,000, you share in that growth.

• Jubilee’s Share: $900,000 (60% of the new value)
• Your Share: $600,000 (40% of the new value) You captured $200,000 of appreciation because you participated in the growth of the whole property—land and all.

You bought in for $400,000 and exited with $600,000 (plus whatever principal you paid down on your mortgage). You captured $200,000 of appreciation.

Option 2: Buy Us Out If you come into some capital later—maybe an inheritance, a bonus, or just disciplined saving—you aren't locked in forever. You can choose to buy the land from Jubilee at any time. You simply pay the fair market value of the land share at that time. Once you do, the ground lease ends, and you own 100% of the property, fee-simple, just like a traditional homeowner.

The Result:

You weren't stuck with a depreciating building. You participated in the appreciation of the whole asset—land and structure combined—proportional to what you put in.

The Bottom Line

We use the best third-party data available (AEI) to ensure your entry price is fair, objective, and non-negotiable. But we built the Jubilee model to ensure you never feel like a "renter" of your own investment.

You get into the home you want today, for less cash upfront, while keeping the upside of a true homeowner—and the option to own it all tomorrow.

Still have questions on the math? We love nerding out on this stuff. Schedule a call with a Jubilee Advisor to see the numbers for your specific neighborhood.