Mixe-inclome Cohousing (was Affordable Rental Cohousing)
From: Joelyn Malone (JKMalonecomcast.net)
Date: Sat, 16 Aug 2008 17:10:28 -0700 (PDT)
Responding to this statement by Marganne:
"Perhaps some of you here who live 'in community' currently could talk about how you would feel if not everyone in your project had the same buy-in price. How would finances be handled equitably?

See my earlier post on the small (450 sq ft or less) units available at Monterey Cohousing. By use of the Co-op organizational structure and financing, we were able to make it possible for our several low-income households (and one that just wanted the simplicity) to buy into Monterey without outside subsidies and without those households feeling that others had to pay more than their fair share in order to make it work for everybody. For those of you who don't have housing cooperatives in your area, I'd love to tell you more about why it's a great legal and organizational structure to use, and how to approximate it under your state's laws if there are no statutes on the books allowing for this structure. Also, finally, there are now some reasonable sources for financing co-op cohousing.

Anyway, under the co-op structure, everybody owns shares in the coop proportional to their unit's initial sale price (which we as the co-op owners could set ourselves, based on our condensed version of what was fair). All adults who live at Monterey have one equal vote on our Board of Directors, regardless of number of shares they own (another hallmark of co-op ownership in all sorts of business sectors). The co-op initially got a single "umbrella mortgage" to purchase the property including our "Commons House" mansion. Yes, we had to come up with a substantial cash down payment, but we could contribute to that down payment at different levels according to the cash we each had available to make the community happen. Then all the co-op owners who live in the Commons House made payments on the mortgage, in proportion to their share prices. Because we based the sales price of the units mostly on square footage (with a formula for a few other unit characteristics), both the unit price and their share of the monthly mortgage payments as well as monthly dues were then affordable. We also arranged, in one case, for a member to have a longer term for pay-back to the community, in order to keep his price lower. (As we added our new-construction units our financing and governance got more complicated -- but the developer and recipient of construction financing for the new townhouses was the co-op, just wearing a different hat).

I've heard "by the grapevine" that it's not uncommon for cohousing communities to find ways to support their lower-income members to be able to buy in. And yes, we do make a lot of use of "gifting" by more well-off members to be able to add luxuries to our community without raising our monthly dues to an unaffordable level for the lower income people. ( We define "luxury" to mean anything that goes beyond minimum health and safety requirements or "Chevy" standard aesthetics.)

Cohousing is basically cooperative housing, which is a plus when I'm trying to explain it to folks here in the hotbed of the New Cooperative movement. Co-op financing and governance structure are really the best fit to reflect what we're all trying to do. The New Cooperative movement is also about the power of people working together, with the vision of transforming our society to create a better place for all of us to live and be. Anybody who wants to hear more about it, let me know! (I may be inspired to start a blog on the subject -- who knows!)

Joelyn Malone
now (drum roll, please...)
President of the Board for NCDF's Northcountry Cooperative Foundation
(more info at ncdf.coop)

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