Re: Sustainably Low-Cost Housing
From: Richart Keller (richart.kellergmail.com)
Date: Sat, 22 May 2010 22:04:55 -0700 (PDT)
Hi Sharon

You have done a good job illustrating some of the key problems of keeping
cohousing affordable.  I agree with your change of the name and with your
challenge to give more thought to how we can keep cohousing affordable. 

A few more thoughts:

1) As cohousing becomes a more attractive way of life, prices which people
are willing to pay will increase.  This happens even if the housing is
originally sold at prices affordable to people earning well under the median
income.  

2) In addition, people who have higher incomes are able to expand the size
of the units and/or add features which increase the resale value, continuing
the drive to higher prices even further out of reach of those with low
incomes. 

3) Another force which increases prices or stabilizes them at higher levels
is related to aging of the owners: houses are tangible assets whose value
becomes even more important to people as they reach the later years of their
lives, whether 
        a) they take a reverse mortgage to supplement a fixed income to deal
with increasing expenses, 
        b) they want to be able to sell their house to move to a living
situation which can accommodate their special needs, or 
        c) they want to leave as much as possible to their heir(s)--the
latter is of increasing concern as the stability, pay, and benefits decrease
for the new generations..

It is likely that there will continue to be inidividuals and/or families who
value the more holistic, environmentally- and community-friendly, lifestyle
of cohousing and can afford the higher prices, so increasing prices may
soften the market but are not likely to be a barrier to creating and
maintaining viable cohousing communities for those who can afford them.  

However, the lack of lower income members is likely to gradually engender a
shift in community values away from a sensitivity to a diversity of economic
situations. This reduced common understanding then limits the sensitivity of
the community to the essential need for equity in a holistic,
environmentally- and community-friendly life style.  The real strength of
cohousing is thereby undermined. . In some communities at least, generous
and socially concerned individuals may be able and willing to alleviate
financial stresses of some lower income families, even to the point of
enabling them to purchase a house in the community. Such individual
generosity is valuable and important, but it does not supplant the systemic
issues which arise from reduced economic diversity. 

I think that you have said it well in your last two paragraphs--the time has
come for us to assure that sustainably affordable cohousing is extend to
those with fewer means.

Thanks for your thoughtful, helpful, and enlightening comments.

Rick



Richart Keller, AICP
120 Pulpit Hill Road #27
Amherst, MA 01002
413-835-0011
401 486-2677 (cell)


 



-----Original Message-----
From: Sharon Villines [mailto:sharon [at] sharonvillines.com] 
Sent: Saturday, May 22, 2010 3:33 PM
To: Cohousing-L Cohousing-L
Subject: [C-L]_ Sustainably Low-Cost Housing



I changed the name of this thread from "Strategy for Affordable  
Housing" to "Sustainably Low-Cost Housing" for two reasons:

(1) We aren't getting down to the price point (to use some jargon)  
necessary for cohousing to be inclusive, and
(2) Many of the solutions don't keep low-cost housing low cost.

Low cost housing by my definition is for people earning less and much  
less than $40,000 a year. The median household income in the US in  
2007 was $50,233.00 and it included the income for all working members  
of the household.

What is it in cohousing? Retired people living on low incomes in  
cohousing should not be included in these calculations because in all  
probability they purchased their units with earnings on previous homes  
or from savings and carry no or a small mortgage. I fall into this  
category and my mortgage costs are far less than my young neighbors  
because they are mortgaged to the hilt. The  monthly difference for me  
and a young person in a unit exactly like it but fully mortgaged is  
about $2,000 a month, or ~20,000 a year. And that is with unusually  
low interest rates. When rates go up again, I will still be at the  
same rate, and new purchasers will be paying much more.

Sustainably low-cost also means low cost to maintain. it won't fall  
apart in 10 or 20 years or leak so much that it can't be heated. Or  
lose its subsidy. Cities can and do sell subsidized housing that then  
becomes market rate housing. Funding programs are cut.

The income figures:

52 weeks X 40 hours = 2090 hours X $10 an hour = $20,800 income, minus  
taxes.

$15 an hour gets it up to $31,350.

I know a lot of people working for $20 an hour, $41,000.

33% of income spent on _all_ housing costs would be $6,864 to $13,530  
a year. Leaky houses alone eat this up very fast.

I don't know what they current figures for disability support.

At 2-3 times income level, this would put home prices at $41,600 -  
$62,400 at the bottom level, and $82,000-$123,000 a the upper level.

I don't think the current focus on affordable units is radical enough  
to provide housing at this income level.

To be representative of the general population, at least half of the  
community would have to earn below $50,000 per household --even with  
two people working. In the communities that have included subsidized  
housing, have the number of units gone above 10% of units? Or even  
gotten up to 10%?

I'm not criticizing cohousing as being a middle-class movement as some  
have done. I understand that given the assumptions and circumstances,  
it had to be. One of the reasons being that it was strictly a do-it- 
yourself project and it took professionals to understand how to do it  
and able to spend the incredible number of hours it took to get it  
done. And even then, many, many failed.

But now the concept has proven itself. A lot of the questions have  
been answered and a lot of information is available. It might be a  
good time to begin thinking strategically about the other half.

Sharon
----
Sharon Villines
Takoma Village Cohousing, Washington DC http://www.takomavillage.org




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