Re: Allocating Common Costs by an Algorithm e.g. based on # adults and sq. ft.
From: R Philip Dowds (rphilipdowdsme.com)
Date: Wed, 10 Mar 2021 08:34:58 -0800 (PST)
I here detect some alternative philosophies about cost sharing in cohousing.

The most communitarian is all-in-together, w/ each dwelling unit or household 
paying an equal share, one-for-one.  The popular variant of this approach is 
that all common expenses are split in proportion to unit value, for which unit 
square footage is seen as an acceptable proxy.

At the other end of the scale, we have pay-per-use.  Separate utility metering 
is popular for those who advocate pay-per-use — partly because the frugal don’t 
want to pay for the extravagances of those who “waste” power, water, etc, and 
partly because many believe that wastefulness is more likely if no measurable 
financial penalty accrues to the profligate.  But it is usually true that one 
common meter will deliver utilities at significantly lower cost all around than 
many individual meters.  After committing to one common meter, it’s a matter of 
how much additional time and money one wants to spend recapturing the data lost 
from, and re-assigning dollar costs to, the individual households.

There are odd gray areas between these two extremes.  Some communities have a 
per use charging system for common laundry equipment, and in other communities, 
laundry machines are provide as a “free” amenity available to all, just like 
the common kitchen or toilets.  I’ve never heard of pay toilets in cohousing, 
but it’s kind of the logical end point of the pay-per-use model.

Speaking as the Treasurer of a community which has fairly complex pay-per-use 
protocols, my general advice is:  Be sure it’s really worth it to you.  You can 
end up with pretty elaborate accounting challenges.

Thanks,
RPD

> On Mar 10, 2021, at 11:05 AM, Ken Winter <ken [at] sunward.org> wrote:
> 
> I'd strongly urge you to build in a system where each unit pays for its
> actual, measured usage of water, electricity, and gas.  You can get actual
> measurements for each unit in two ways: (1) each unit has a meter provided
> by the local utility and pays the utility directly, or (2) the local
> utility has meters on each building and the community has submeters for
> each unit, the community pays the utility and each unit owner pays the
> community for that unit's usage as measured by its submeter.  At Sunward
> Cohousing, after 20 years of "we all pay for everything", we have
> retrofitted submeters into our water billing system.  For what we did, why,
> and how, see
> https://docs.google.com/document/d/14kO0ncu6-G0W_qJKJqsjxXT9xYAotIWSXGhqTK1aF0c/edit?usp=sharing.
> This article is a quite incomplete work-in-progress, but the "why" section
> is pretty solid.
> 
> ~ Ken Winter, Sunward Cohousing, Ann Arbor MI
> 
> 
> On Wed, Mar 10, 2021 at 7:51 AM Jim Bronson <jimbronsonashland [at] gmail.com>
> wrote:
> 
>> Dear Cohousing Communities,
>> 
>> River Song is planning to break ground soon.  We are thinking about having
>> one electric meter per building and one water meter for the whole community
>> to save costs - which may be as much as $600/month compared to having
>> meters for each unit.
>> 
>> When we are up and running our HOA will allocate common costs monthly or
>> quarterly.  We have heard from other cohousing communities that they have
>> evolved a way of fairly allocating common costs using an algorithm based on
>> # of adults and square footage for each unit.
>> 
>> For our planning, I have attached a one page MS Word doc that shows an
>> example of how we think this could look for the simple case of a 4 unit
>> cohousing community.  I would appreciate hearing from communities
>> experienced in using algorithm allocation for common costs about what they
>> have learned.  Also, I would like to know how their algorithms may allow
>> for individual variations, for example a private unit having their own
>> solar pv, having a hot tub or an electric car charging station, etc.
>> 
>> Thanks for sharing what you have learned.
>> Jim Bronson (for the Design Team)
>> River Song Cohousing Community
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>> 
>> 
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