RE: question from a grad student
From: Mark Richardson (
Date: Wed, 17 May 2000 00:48:46 -0600 (MDT)
About banking,,

The concept of forming a bank is not really that bad, my agency did the same 
about 10 years ago for rural housing developments, when both federal and 
private funds would not pay for the projects due to "strange issues" they 
didn't know how to deal with.  You might check with our financial services 
division to find out more, currently we only with work in small towns, of 
less than 10,000 people, and they have to be a non-profit, Indian tribe, or 
public entity, we are very active in the western 12 states, Hawaii to 
Alaska, Washington to New Mexico, you can find us at    We are 
a non-profit group.

>From: "Odysseus Levy" <olevy [at]>
>Reply-To: olevy [at]
>To: Multiple recipients of list <cohousing-l [at]>
>Subject: RE: question from a grad student
>Date: Tue, 16 May 2000 19:17:19 -0500
>What a cool question!  This is a very topical question for the Seattle
>Cohousing community
>Liz, you might also want to talk to Kara Black from Duwamish cohousing (in
>West Seattle).  This was a huge concern for them, and for Kara in
>The city of Seattle has been very, very helpful to the Seattle cohousing
>project.  For starters, they are giving us a great price on our land, and
>just lately when we hit a major cash crunch they have agreed to let us pay
>interest for the land instead of paying for the cost of the land up front.
>They also have a policy of not charging real-estate taxes on projects in 
>area if we have a certain minimum number of low income residents.  That
>could work out to be a large savings.  There are some catches with this tax
>free status, so we may not go with it, but it is a wonderful carrot to
>encourage us to try to get more low income members.
>No, the problem is not government, it is the bankers.  We are scrambling to
>get everything in place so that we can start construction in July.  If we
>don't start in July we will soon be up against the infamous Seattle rainy
>season, and will probably have to delay the project another year.  And the
>hard cold reality is that if we want to build, we need to make our
>development bank happy.
>The problem is, our development bank wants us to pay 23% of the project 
>upfront plus any expected over-runs.  And we recently got an updated bid
>from our contractors only to find that their prices have gone up 15% since
>last Fall -- the Seattle building market is absolutely out of control at 
>moment.  Even this wouldn't be too much of a problem except that the banks
>we talked to won't attach a monetary value to our common facilities.  So in
>effect, we have to consider the common facilities as a cost over-run.  In
>practical terms this means we have to come up with that much more money up
>The need for this upfront money has put an enormous strain on our lower
>income members.  Fortunately we have some deep pocketed members who have
>decided to pay most of the money for their unit over a year in advance.
>That gives us just enough money to pull it off.
>Nevertheless, one of our lower income members decided to downgrade to
>associate member because she couldn't sleep nights.  Several others are
>still hanging on, but their sleep is apparently not that good either.
>Here's my dream:  Create a non-profit community oriented bank.  This bank
>would specialize in cohousing and co-op community loans across the nation.
>The bank would act like a normal commercial development bank in most
>respects except that it would be specifically focused on cohousing style
>loans and would do a much, much better job of servicing this segment.  To
>get it going there would need to be a large seed money infusion, but after
>that it should be self sufficient.  I never thought that my dream would be
>to start a bank, but after seeing how much it has dictated the course of 
>project, I now understand how vitally important banks can be.
>-----Original Message-----
>From: cohousing-l [at]
>[mailto:cohousing-l [at]]On Behalf Of E. Rice
>Sent: Tuesday, May 16, 2000 4:06 PM
>To: Multiple recipients of list
>Subject: question from a grad student
>I'm a graduate student at University of Washington School of Public
>Affairs. I'm in a policy class, and a group of us are looking at issues of
>housing and low-income affordability. I, in particular, am looking at
>cohousing as an option for the city to get more behind in terms of
>low-income housing development. I know many cohousing groups seek
>diversity of all kinds, including income diversity, but I'm wondering how
>well you feel it works, and how city incentives to create affordable
>housing as part of the cohousing unit help or inhibit its creation. I'm
>also wondering how those who are part of the cohousing movement in general
>feel about the ability of cohousing to address issues of availability of
>low-income housing options, especially in cities such as Seattle in which
>real estate prices have increased to the point where it is difficult to
>maintain affordable housing.
>Hope you don't mind me posting to this email list. I would love any input
>anyone has on this matter.
>Thanks for your time
>Liz Rice

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