Re: Increase in housing values: A boon or disaster for cohousing?
From: Lion Kuntz (
Date: Fri, 21 Jul 2006 05:03:39 -0700 (PDT)
I look at the mail once a week or so, and flag those I want to answer.
Then, I might not get to answer right away, so if the discussion has
moved away, c'est la vie...

--- Rob Sandelin <floriferous [at]> wrote:

> ... Cohousing units that originally sold for under $100,000 are
> going
> for $250,000 and more.  It is one thing to be able to afford a place
> at
> original buy in but with the escalation of real estate values it is
> altogether another thing to be able to buy a home even a couple of
> years
> after construction. 
> It is a double edged sword, in that first time buyers, when they move
> on,
> want to maximize their ability to buy another home, thus the higher
> the
> price they can get for their unit the more house they can buy
> elsewhere. I
> could not afford to buy my current home at its appraised value, but
> should I
> sell someday I would have to move away from the area unless I was
> able to
> get the appraised rate, since all the surrounding housing in the area
> is
> doing the same jump in price. 
> So is affordability a one time thing for first owners?

"Affordability" is a vague and elusive term best not used. Under a
different paradigm people should be living much higher quality of life
as presently available. Housing should have an expectation of 100 year
lifespan, which means some of your grandchildren will live their whole
life where you live, and the building will not be falling-down decrepit
either. Since that wasn't in your paradigm, it wasn't put in the
specifications for your architect to work with and it isn't built into
your home.

knowing that the building has to stand duty for 100 years changes a lot
of assumptions about how it's made. There are a lot of materials
choices that won't make the grade. Knowing in advance that routine
mainenance will have to happen from time to time, because you can't
just throw it away and build another one when internal systems start to
wear out, changes some more assumptions about actual construction.

If you live in a seismically active, or hurricane or tornado prone
zone, and you still expect it to fully function as shelter for 100
years alters some other assumptions. If you stipulate that you will
never burn to death in it or sufficate from toxic smokes, and want all
recyclable materials without any hazardous wastes at end-of-life, there
goes some more common assumption out of the picture. Maybe you would
prefer some level of flood immunity? More assumptions gone.

This is a truncated subsection of the list of assumptions that you have
to get rid of in order to have housing for the 21st century. You have
to get rid of the assumptions that flamable, fall-down, disposable,
toxic and wasteful housing is something you should own.

When you root out all the things that are assumed by the housing you
consider normal, what do you have left? I called them "Palaces", luxury
living completely compatable with happy, satisfying lives, which are
climate regulated in the comfort zone most people prefer and issue
forth no noxious pollutions in providing adequate utilities.

What does it cost? Among other things, it costs a quarter-year of your
life to help build it. Maybe you are rich enough to hire somebody
instead, but we won't let you. The "sweat equity" does bring down the
dollar costs, but that's only an incidental by-product of it's real
purpose, which is to cement bonds between the neighbors and screen out
the Ted Bundy's in our midst. By the time you have put in 500 hours
building your "co-housing" (in a literal sense) there won't have to be
meetings over chore sharing in the future.

What does it cost in $$$? That is highly location specific. In more
than half of all locations it costs equal to a year's market rate
rental fees for the same equivilent floor space in that same real
estate market area. That's the buy-in that you never get back until the
day you sell your share. On top of that is roughly the same amount
again, which you need to pay to buy-in but is returned back to you from
income property associated with the project and is paid back in one to
two years. On top of that is another sum you decide for how much
yourself which takes a structurally sound dwelling and leaves you to do
the interior decorating finishes.

To try to put dollar figures on the term "affordable" then means a cost
of roughly two to three years rental value on the same kind of
residential space.

If a person is a good saver, then they can pay cash and be mortgage
free from the start, else if they are a lousy saver then they need to
finance what two years rentals would cost them in the same neighborhood
for equivilent space housing, and maybe spread out upgrading their
interior finishes over a couple of years. Considering that you are
buying (and building) a property that will last 100 years in good
shape, and offers a  host of pooled amenities which you could never
afford on your own, I consider this a concrete definition of
"affordable". There's no reason that every mortgage is not fully paid
off in five years, even from people who charge it at credit card
interest rates. If they can afford to pay rent in that area then they
can afford to be home-owners in that area.

People can make it as much more complicated as they want to, but that
is a choice, not an obligation. Every single human being on Earth can
afford good solid, even luxurious in some ways, housing in exchange
from the sweat off their brow doing what they do for three years or
less of their lifetime, and be 100% mortgage-free at an early date.
Besides obtaining housing they will simultaneously acquire income
property which will repay them every cent they put up well before the
first decade has finished.

Show me a better plan and I will be the first one to sign up.

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Sincerely, Lion Kuntz
Santa Rosa, California, USA
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