Advice sought on affordability during development and after (long)
From: Kristen Simmons (
Date: Thu, 9 Aug 2007 15:15:15 -0700 (PDT)
Hi All,

I am part of a forming community in Boston, Massachusetts (Stony Brook
Cohousing). My task presently is to research affordability at all phases of
development, including after move in. Affordability is very challenging here
in Boston, where housing and land costs are very high.

I have gone through the coho listserv, gleaning ideas and information where
I could. I have pulled all these ideas together, so that our group could
develop goals and a comprehensive strategy. I thought that I would post it
here first and seek your input. Any thoughts, particularly if you have
personal experience in these matters, would be helpful.

Thanks in advance,
Kristen Simmons
Stony Brook Cohousing,
at the Ecovillage at JP <Ecovillage@JP>  (Boston, MA)

(FYI: We are required by the local authority (BRA) to have 15% affordable
housing. Qualifications for this are based on the Area Median Family Income
(AMFI), which is set by HUD.)


Allow qualifying households to make payments toward the capital contribution
required for equity membership. This would allow these households to fully
participate without increasing risk to other members. (Recommend basing
qualifications on Boston AMFI and limiting assets to less than 75K,
excluding retirement and college savings funds, the same criteria used by
the BRA.)

When equity cash payments become equal to a percentage of estimated purchase
price, allow qualified households to pay a lessor percent to become an
equity member.(For example, equity costs could be 7% of estimated unit
purchase price, 5% for low income - payment plan available.)   To make up
the cash shortfall that may occur, provide interest incentives to members
who can pay more than 7%.

Research and identify compatible organizations which serve low and moderate
income households, by providing down payment and mortgage assistance to home
buyers, by purchasing and renting to low income households, and/or other
programs. Some organizations might be interested in buying a unit.

During the design phase:

Reduce costs for all units through design decisions, including layout,
material, and systems selection. Both first costs and life cycle costs
should be taken into consideration should be taken into consideration.

During the budget and pricing phase:

Review the mix of pricing structures and target markets; for example, large
affordable units will attract families. Determine what size units will be
designated affordable and what income levels will qualify for them, 80%,
100%, or 120% of the AMFI. Note, this may be beyond SBC's control. These are
the units that are mandated by the BRA/City of Boston.

Review adding additional permanently affordable units in addition to the 15%
required by the City of Boston. Remember that the reduced cost of any
affordable unit is off set by the increased price of the market rate units.

SBC could decide to purchase 1-2 units for rental. The unit(s) would be
considered part of the common space, which would affect market rate unit
price and might impact the monthly condo fee.

When Purchase and Sale Agreements are signed:

An Affordability Fund could be a straight line item in the budget that could
provide down payment assistance to qualified members. This would be
particularly useful if the group was concerned with balancing first costs
and life cycle costs. Down payment assistance could reduce the first cost
price sensitivity of some group members.

A Co-Purchase Fund is based on optional participation. Households were given
the option to invest into the fund.   The fund then co-purchased, (second or
third position behind the traditional mortgage) a qualifying household's
unit.  The fund receives a return when the house sells, sharing in the
profit of the sale based on what % the fund 'owns' of the unit.

After move in:

The same affordability fund described above can be used after move in. Ideas
for usage: assist a low income family temporarily with condo fees, assist if
a household loses income because of illness, job loss, etc.   Condo docs
chould describe how his fund will be administered.

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