|affordability compilation||<– Date –> <– Thread –>|
|From: Elizabeth Rice (lizriceu.washington.edu)|
|Date: Thu, 25 May 2000 18:01:40 -0600 (MDT)|
Hi all, (my subject line makes it sound like a new music CD set...available now!) I was asked to compile the answers to my question about affordable housing and cohousing. Here they are ? the original question is first with the responses following. I received some responses sent just to me, and checked with the folks who sent them and got an ok to include them. Thanks again for all your help in this?it is much appreciated...it is indeed an interesting topic. Liz Rice >-----Original Message----- >From: cohousing-l [at] freedom2.mtn.org >[mailto:cohousing-l [at] freedom2.mtn.org]On Behalf Of E. Rice >Sent: Tuesday, May 16, 2000 4:06 PM >To: Multiple recipients of list >Subject: question from a grad student > > >Hi, >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 What a cool question! This is a very topical question for the Seattle Cohousing community 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 our 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 cost 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 the 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 front. 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 our project, I now understand how vitally important banks can be. In a message dated 5/16/2000 8:27:01 PM, olevy [at] cosmosgame.com writes: << No, the problem is not government, it is the bankers. ....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 cost 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 the 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 front. >> At Pathways we got lucky; the Pathways development entity (who we were before we were owner occupied) never had to go to the banks. Our contractor/developer agreed to lend us money, at decent market rates, after we were willing to lend ourselves a bunch of money in advance (I think it was 10% of the total budgeted costs, but I'm not sure). This made some money for the developer (which would have gone to the banks) and saved us about $50,000 in bank fees. If you can find an enlightened developer who would like to make a few extra bucks on the project by loaning you money, you may be able to bypass the banks also. Good luck. Roger Berman Pathways Cohousing Northampton, MA You bring up some interesting points, my understanding of co-housing is that it is not necessarily suited for "low-income" housing projects. It is certainly a "life style" choice. I work with a very strong non-profit agency that develops low income housing in Rural areas. (we work actively in the State of Washington thru our Lacy office) and the question of co-housing comes up in our "self-help" programs. To my knowledge, only a project in the Holister, California area used co-housing, and that was for agricultural working mothers. Our staff works closely with groups in the development and construction of their homes, but find most folks want their own, independent home. Some of the models we use to develop afforable housing can work in the city, the most important piece is the cost of real estate.. I live near a city co-housing group, the South Park, in Sacramento, California, and their units are at market or higher for similar homes in the area, without some of the amenties the other homes have, such as garages. If you have questions, please contact us via our web page at www.rcac.org mahalo > ________________________________________________________________________ Hi, Liz. Here in Florida we are exploring the application of cohousing in low-income situations. You might want to read an article by Hasell and Scanzoni "Cohousing in HUD - Problems and Prospects" (The Journal of Architecture and Planning Research 17:2, 133-145, Summer 2000). Actually -and for all in the list who are interested in reserach on cohousing- the JAPR Summer 2000 issue is dedicated to this topic. It was edited by Dr. John Scanzoni, a sociologist at UF. I am part of a group exploring ways to adapt cohousing concepts to an ecovillage development for Habitat for Humanity in Gainesville, FL. We are just getting started so there isn't much to report yet, except our belief that the benefits of the cohousing lifestyle need not be restricted to the income bracket population that has at first adopted the model. 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 www.rcac.org We are a non-profit group. Liz - Would you compile the responses you get and send them to the list? Or maybe you could post a link to the eventual paper you write? I'm with a cohousing group in the San Francisco Bay Area that is interested in incorporating affordable housing into our project. We are currently at the site search stage and are unsure as to whether and how we will do this. We've gotten lots of advice from this list, the Cohousing Network (see David Mandel's page there), and from the Cohousing Company. I know there are many in the cohousing movement who are interested in affordable housing but who may be daunted (or defeated) by the prospect of combining two difficult-to-develop types of housing. In general, as you know, cohousing has been a middle-class endeavor. I think this is not only a matter of finances but also of education and entrepreneurial requirements! After all, getting a cohousing community off the ground requires a huge investment of time and energy as well as dollars. Cambridge Coho wanted to have some diversity and managed some by having a huge variety of unit sizes from studios to large 4-bedroom townhouses. We also offered two units to the local housing authority, which purchased them at a slight discount and found us two eligible families - a single mother of one daughter and a single woman - that were interested in the concept. They have been great neighbors and both love the community, like the idea of coming home to see people around, stopping to chat, etc. However, although they do attend General Meetings from time to time and participate in meals and other activities, neither is much interested in being a member of one of our many committees or or participating in governance type activities. To be honest, socialization between these families and other residents is mostly at the neighborly not close personal level. Of course, these residents do not have the sense of ownership that comes with owning a piece of the pie!! In addition, we have a limited dividend unit, subsidized by a city program to encourage home ownership in those of moderate means by helping with a downpayment and low interest mortgage. On sale, the amount of profit is limited by deed. This is a concept that needs more exploration, I think. On the other hand, there are public housing developments in Boston which have elected resident managing boards which have been successful (and some that haven't). I'm not sure where this is going, so maybe I'll leave it at that. Liz: I'm sending this just to you but feel free to share it if you wish. Getting cohousing built is difficult. Getting affordable housing built is difficult. Doing both at the same time is maybe four times as difficult. Therefore is doesn't seem to happen much. A group or agency devoted to one is unlikely to want to muck up the works by doing the other too. This is my conclusion from observation, despite my belief that low-income housing projects could be much more successful if they adopt some aspects of cohousing, including ownership and self-management; and my dislike of most private market cohousing development that pay lip service to the concept of affordability when getting started but then find it too difficult and leave low-income people out completely. So how can the gap be bridged? With difficulty, in any event, but here are a few ideas. 1. By getting at least some low-income people be involved in a cohousing group from the start, which can infuse the group with the determination needed to keep them from being excluded. 2. By promoting mixed-income cohousing development in low-income neighborhoods. Programs to subsidize housing in distressed neighborhoods are more likely to make a mixed-income project feasible there than it would be in a suburb. 3. By finding some lenders -- private or governmental -- who would like to get good PR for innovation by funding low-income cohousing while meeting their CRA obligations. I believe the potential is out there. That could draw nonprofit developers into the game. These are on top of considering other strategies for affordability included in my outline of a few years ago (available through the cohousing site) and other things that have been written about it. David Mandel, Sacramento Dear Ms. Rice- Well, here is what I wanted to say. I read your post on the cohousing-L about affordable housing, and cohousing being a potential answer in tight urban markets. In a nutshell- I don't see the standard model of cohousing being the answer. For the following reasons: 1.Time- People in lower income brackets tend not to have a lot of time to devote to this kind of an endeavor. 2.Finances- Cohousing is expensive. It is the nature of the beast. When you take a market item whose costs have been lowered by standardization (homebuilding) and customize it (cohousing) the expense will only be higher than doing it the conventional way. 3.Interest- The very concept of resource sharing smacks of inadequacy to provide for one's self when your personal background experience has been one of poverty. Generally speaking, cohousing (or intentional community) is pursued by one of two sorts of people. Either, people with a luxury of time, and disposable income, who have been well educated, and have the whole-life resources to make discriminating housing choices, and then tailor those choices to their precise needs/ wants; or those who are deeply disappointed/ disenchanted with mainstream culture (or both). Generally speaking, people who need affordable housing don't fit either of those catagories. And once, again- as is the nature of the beast- the critical difference in cohousing is that the development is driven by the people who are going to live there; not an external source. So to build a cohousing development, and then invite a group of low-income people who've never met each other to come live there... sounds like it would defeat the purpose of cohousing to me. The needs of affordable housing could much better be met by fostering ties between neighbors in existing neighborhoods. (externally organized block parties, and cooperative daycare centers come to mind, as well as local currency systems) And as far as changing the dynamic of home ownership- that seems like a painfully simple question. If there is money to build affordable housing- that same money can purchase existing housing- and resell it as limited equity cooperatives. There are several tremendously good examples of this here in Ann Arbor, a pocket of notoriously high real estate. But if policy makers insist on building new buildings- then I'm quite certain it wouldn't hurt if they were pedestrian-oriented layouts, with community centers for common use, all surrounded by a quantity of greenspace. I'm just not sure how it would be a better answer to the quagmire of questions surrounding the affordable housing issue. There's my two cents. Thanks for asking. Good luck on your project!! Hi Liz, I have not seen too much success with groups doing affordable cohousing. Affordable means subsidity and getting such things is difficult. The Vashon Island Cohousing group worked with Vashion household to secure some affordable housing grants. I don't know if that situation is reproducable. The key is find a partnering affordable housing organization to team up with. I haven't much time, but wanted to sketch out a brief response. I've been a resident of Puget Ridge Cohousing for almost six years. I've had little experience in successful outreach for diversity. The common denominator here has a great deal to do with economics; the sad truth is, the only people who could afford to move in had some sort of substantial assets. I have a strong interest in affordable, low income, and poverty level housing, and have watched as Ciel/Dumwamish cohousing tried to reach out to diverse members. They haven't been successful with ethnic diversity, but they managed to attract many more families with small children than we did -- I wonder if there may have been some city subsidy for certain units, and, if so, that affected the ability of youngish, just-starting-out families to join? Creating cohousing is a horrendous challenge, and certainly more money is key for making it available to lower income families and individuals. But many lower-income individuals whom I've known live so close to the line that they would not have the time and energy to contribute heavily to developing cohousing, so in my opinion, it would be most successful in a situation where there is ample talent and time in the group to absorb individuals who have less time to devote. Marty Kehl 1. have the local housing authority purchase 1 or 2 units in existing developments and rent them out to low income people. They already do this around town in Portland, why not add cohousing to the list of options? For motivated low income renters, this could be a very positive option. Think of all the support they'd get. 2. have the local housing authorities purchase a small 12 plex or bigger, gut 2 of the units to make a common house. Hold a public cohousing meeting, attract buyers with VERY reasonable prices on 2/3rds of the units, the last 1/3 sold to low income qualifiers, perhaps something along the habitat for humanity model. There is a largely rental community in Australia, members of whom write into the list, that should be very informative on this idea. These ideas assume that the low income people buy into (figuratively) the community model.
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