The long party is whoever currently owns the property that is being sold short. It would be essentially a leverage tool for property owners. As a property owner you already enjoy a cash flow stream in the form of rent (could be implicit if you live in the property), you'd get a second stream from the short seller.
The only fuzzy part in this scheme is when does the short seller finally get paid. It would probably require some kind of a foreclosure on the property (otherwise the property owner would have to lock up a significant amount of some other collateral), putting a cap on the short sale profits.
This is kind of how reverse mortgages work. There the bank (or some other financial company) plays the role of the short seller, while the retiree is the long. The short side payout happens at death.
