Re: paying $ for sweat equity
From: PattyMara (
Date: Sun, 10 Jan 1999 00:02:36 -0600
In a message dated 99-01-09 14:49:38 EST, lilbert [at] writes:

<<  Some people are talking about regular chores 
 and others are talking about capital improvements.  I really think we 
 need to define what it is before we can give each other advice about it. >>

At Tierra Nueva we defined sweat equity as:  "monetary compensation for tasks
performed by cohousing members".  The following 7 points describe how we
handled it in our group.  

1.  Members can earn sweat equity credit by providing "professional services"
defined as any task that the group, or any group could expect to "hire" on the
open market.
2.  The services must be requested and required by the appropriate committee.
3.   The services required must be specified and anticipated iin the overall
project budget.  
4.  The member must request in advance to perform the task to earn sweat
equity credit for work.  
5.  All requests/arrangements must be forwarded to the finance committee for
approval, record keeping and budget review.  This process must take place
before any work is eligible for compensation.
6.  Sweat equity will be credited to the member's household account and will
be applied to the down payment on the member's house.  No interest will be
accrued on sweat equity.
7.  A formal business relationship will be established between the member
perfoming professional services and the cohousing corporation.  Expectations,
specific needs, timelines must be met.  The relationship between the
corporation member being compensated and the corporation, is the same as the
relationship between any service provider and the corporation.

On a personal note, my husband and I were one of the households  who received
such compensation.  We are graphic designers.  We requested sweat equity for
some of the work we did to market our project.  We do marketing and
advertising in our business, so it met the stipulation that we offer a
professional service.  We suggested a reduced rate (half our regular hourly
rates) and kept meticulous records of time.  I had to be very careful to
distinquish between regular marketing committee work (which I volunteered, as
any other committee member) and professional time spent.  Sometimes the line
was very blurry, so I often did not charge for my time.   Over the course of a
year of actively marketing we accrued over 200 hours of compensated time and
probably double or triple that amount of time volunteered.  

Since the work was done mostly "after hours" we spent many many late nights at
the computer.  But knowing that we were going to be compensated (it was a
deferred compensation, and wholely dependent on the project succeeding, so we
were very motivated to make it work on many levels) sure sweetened the

 So what are the general feelings of the group toward members receiving sweat
equity compensation?  For us it succeeded most of the time.  Our work was
highly appreciated by the membership and ultimately very successful.  But
there were times when some strain was perceived, mostly at times when the
group was struggling which some overwhelming development issues.  At one point
a member of the finance team took issue with my presence on the marketing
committee team when we developed our proposed budget for our marketing plan.
He perceived this as a conflict of interest.  My husband and I felt it was
necessary at that point to separate ourselves from the marketing team, even
though we were the ones with the most experience in the field, in order to
stay out of the conflict of interest zone.  So it was not without its strains
and bumps in the road.   Also, there is the tendency for sweat equity workers
to have too many "employers" when working for a community.  

Sweat equity requires a delicate balance of good boundaries and generosity.
Kind of like mixing business with friendship.  I would suggest that meticulous
accounts be kept of time and that no work in the past be compensated.  We had
one member ask for payment for work done over a year before, and it caused
some serious discussion and processing. 

I'm glad we had a sweat equity option.  I think it can work when clearly
defined.  Since we are so new a community we haven't a whole lot of experience
paying members for professional work while living here.   So far we have payed
a member who is a lawyer and a member who built a deck railing/bench for the
common house when we needed it done quickly to pass final inspection.  

A need for more design work has arisen. As a pedestrian community with
peripheral parking we are realizing that most of the homes are very difficult
to locate, especially for delivery services like UPS or FedEX.  We recently
voted to create a directory kiosk at the gateway to the community, and my
husband agreed to do the design work and implementation.  He is responsible
for all of the signs for a community college campus where he works and is very
experienced in the field of directional signage.  I think this would qualify
as professional services.  It remains to be seen if he will consider it a
labor of love (volunteer) or as billable time.  Whatever he decides, the group
has a process in place for him to request compensation.

Patty Mara Gourley
Tierra Nueva Cohousing
on the central California coast


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