Re: SELF DEVELOPMENT VS PROFESSIONAL DEVELOPER
From: Chris ScottHanson (chriscohousingresources.com)
Date: Wed, 28 Jul 2004 16:43:57 -0700 (PDT)
The choice between self development and working with a professional developer starts with the question of MONEY. How much can you raise, and how much can you risk?

CONTEXT: I am a 28 year veteran of multi-family development consulting. I am not a developer, I am a development consultant. I have worked exclusively on cohousing projects since December 15th of 1988, and I have been involved in, to one degree or another, more than 30 of the 70+ projects that are now completed in the US and Canada, including many that have been self developed - Winslow to Jamaica Plain.

As usual, Sharon has been most eloquent, and I agree heartily with most of what she says about this topic. However, I would like to make one clarification. Mostly definitional...

One does not "hire" a developer. One hires a consultant. In general, developers do not work for other people. Simplest I think is to realize that housing developers are manufacturers of housing product, which they sell to the new housing market.

A developer will participate in a cohousing project (financially investing and taking a risk) only if they have significant control, and therefore only as a partner (co-owner) in the project. Generally this means that their name needs to be on the deed to the land, at least during the construction phase. Note the first law of real estate development: "Control goes with ownership of the land."

The developer has a profit motive and is willing to risk money and their credit on making a project happen so that they can make a profit. By comparison, most development consultants, including specialized cohousing development consultants like me, are only willing to personally risk a limited amount in back loaded fees. They work for fees, more like a salary, and less like risk taking profit.

The biggest difference here is control and risk. Consultants fundamentally "do what you ask them to do," even if you don't decide to follow all of their recommendations. As a consultant I make recommendations at times that go unheeded by my clients. Whether they are self developing, or partnering with a developer, cohousers very often think they know better, and want to do things their own way. Sometimes the recommendation makes a big difference in cost to the project, and sometimes it only makes a big difference in the experience of creating the project - and the closely related process of building community at the same time.

Generally speaking, developers, as financial partners in a project, are not obliged to do what you ask them to do, and in fact will normally do a lot of telling you what you have to do to meet their needs as the big risk taker (their perception), and the construction loan borrower. The developer sees themselves as taking the biggest risk when they sign on that multi-millions dollar loan, and needing the most control so that they can manage that risk.

I could say it another way, more seriously: The cohouser group's ability to define their project virtually ends when they engage in a partnership/relationship with a developer. When the developer's money comes in, so does their need for control. Therefore, have it defined before engaging with a developer.

Oh, and yes, the PROJECT can be better controlled by a developer, but it is not the cohouser that has the ability to exercise that control. With a development consultant dedicated to creating cohousing, a cohousing group can define their project well before engaging the development partner, and then stand up to the partner for the group through the development process.

Chris ScottHanson
Cohousing Resources LLC
(206) 842-9160
cohousing [at] mac.com
"Now seeking larger, green and sustainable mixed use, multi-neighborhood ecovillage development projects, and financial partners ready to make a difference beyond one cohousing neighborhood at a time."


On Jul 24, 2004, at 5:50 AM, Sharon Villines wrote:

Look around and hire a developer. I would also hire a cohousing professional, like Ann Zabaldo, to help with marketing and group formation and working with the developer. Having someone around who has done it before helps enormously with anxiety and details and big picture. You will still have tons of work to do yourself -- this doesn't mean you will be closed out of the decision-making or lose control of your project. It means you will have better control.


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