|Initial budgeting||<– Date –> <– Thread –>|
|From: Lynn Nadeau (welcomeolympus.net)|
|Date: Mon, 17 Jan 2000 23:28:59 -0700 (MST)|
RoseWind Cohousing, Port Townsend WA (now in our eleventh year, and soon to sell our last two lots, of 24). We are a "lot development" model, which means everyone deals with their own house financing, design and construction. But we still had to budget for the purchase of our land, the installation of infrastructure (roads, sewer, water, drainage, phone, electric, parking, street signs, fire hydrants, sewer cleanouts, etc., plus any paid work involved in supervising the infrastructure process), and the creation of our common house. We are a "nonprofit" corporation, but we took that rather too literally. "Reasonable reserves" are allowed a nonprofit, and we did not take into account a number of factors. We naively figured how many lots we'd have, how much each lot would sell for, and made that total match with the total expenses of buying the land, projected infrastructure cost, and projected common house cost. What we didn't take into account---and should have--- was that time was going to pass, years in fact, during which time we would still be the ones paying the property tax on some lots which were still unsold; the cost of installing infrastructure, and creating a common house, would rise significantly, and there would be other needs, like money for landscaping the commons, which we inadequately addressed in the initial development budget. So cut yourself some slack, you'll need it. You might figure that at least one of your projected lots is an "extra", and when all but that one has sold, you will have broken even. Figure in the cost of taxes and inflation, if it's not all happening at once. It's fairly certain that it will take longer and cost more than you think. PS We survived our naivete. Our common house programming had to be trimmed some, but we brought our infrastructure in on budget, we tucked some should-have-been-development budget items into each year's "operating" budget, and had some help from member donations. So mistakes needn't be fatal, but it's nice to make original mistakes, rather than ones you were told to avoid! If only we'd been hooked in to the Internet and lists like this one, ten years ago. PPS We didn't do a sliding scale based on ability, but our lots varied in size, location, etc, and there was about a $10K range in lot prices, if I remember right. And designing our own houses left a range of expense for the house, according to taste and means. We also had members buy two lots and donate them to Habitat for Humanity, as part of a deal we made with them, to assist two lower-income families in joining us. We also have some homes with built-in apartments, some of which are rentals. Lynn Nadeau
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