Cohousing-L Mailing List: Re: COHOUSING-L digest 236

[Munn Heydorn (munn]

>From Nancy Wight's posting of 8/18/94:

>> Other groups may find it ironic--but one way of making cohousing affordab
>> to acquire the land cheaply from a sympathetic person. 
>
>I think this is one of the only ways to be able to make any kind of housing 
>"affordable".  After all, we are not going to get builders to give us a 
>break, on a large scale, and the people I've talked to who have been able 
>to develop communities cheaper than the rest of us have all had some sort 
>of subsidy or break on the land cost.  There is a group in Aspen, CO who 
>got a land grant from the town of Aspen, where land values are higher than 
>just about *anywhere*!  We, on the other hand, had to pay an exhorbitant 
>amount of money for land, after looking for two years, which is one of the 
>main reasons our community is so expensive.
>
>- Nancy
>
>Nancy Wight                                   wight [at] world.std.com
>New View Neighborhood Development
>
>------------------------------

Land prices as they are now in many communities, including mine, are too 
high, in my opinion, to build affordable single family housing for lower 
income families without one of the following (or in combination):

     (1) Subsidy by someone or some entity (Probably government) for some 
combination of land, building or financing.
     
     (2) More density and/or smaller than usual homes.

     (3) Lots of sweat equity.

One of the more effective organizations which delivers affordable housing is 
Habitat for Humanity.  I think it works because of #3 above and #1 above for 
the most part.  The subsidy comes from free labor by volunteers and, in some 
cases, "deals" on land, mostly by the towns in which the construction is 
located.  Perhaps some materials are also free or purchased at a cheaper 
rate.  The persons for whom the house is built supplies #3.  To my 
knowledge, most places that they build in are themselves lower income areas 
or towns or in major cities in which the land is donated or lowered in price.

In my experience here, builders have a gross profit of 9 to 12% (High end 
home builders usually have a higher gross profit margin) of total home price 
BEFORE paying interest, office expense, overhead and the like.  A home here 
runs $50 to $55 and up per sq.ft., lots $50,000 plus and soft costs run 6 to 
12% of building cost.  Even if the builder did houses for NO gross profit, a 
house can not be built here for lower income families without subsidy.

Another factor frequently mentioned in affordable housing groups is paring 
down the cost of construction through building code loosening and similar 
measures.  That helps to a small extent, perhaps 4 to 6% at best.  
Obviously, safety and health issues need to be dealt with as well here.

Tony Downs, a well known national real estate economist, is an advocate of - 
by most U.S. standards - radically smaller houses.  I have forgotten the 
exact size he advocates, but it's on the order of 300 to 400 sq.ft., a size 
he says is common in Japan, for instance, even among higher than poor income 
groups there.  That, I would assume would be a hard sell here, both at the 
zoning/regulatory level and at the sales level.  Some time ago, a builder 
here did a lot of raised ranches that were probably 900 sq. ft. upstairs 
and, of course, the same in the lower level or basement which could be 
finished out via sweat equity or as funds allowed later after purchase.  
This is similar to small Cape Cod houses with unfinished second floors which 
were commonly built in the late 50's, early 60's.  Perceptions of minimum 
spaces needed in an inexpensive, much less expensive home, have escalated 
considerably in the past 30 years or so and, regardless of any other factor, 
this has led to less affordable homes in and of itself.

On the more positive side of things, if a cohousing group did decide that 
some homes in the group should be more affordable for lower income persons, 
there is one thing that seems somewhat feasible to me.  That is to allocate 
2 or 3 lots (Or, whatever number) to that purpose and try to joint venture 
or work with an organization such as Habitat for Humanity in building homes 
on those lots.  Perhaps they could help the group pull it off.  I do agree 
with the posts, incidently, that indicate that this may mot be cohousing's 
goal in many cases and should not be foisted on a group as their cross, so 
to speak, unless they wish to do such housing voluntarily.

Speaking for MH, not First Chicago Bank.
Regards,
Munn

Munn Heydorn
First National Bank of Chicago
120 East Wesley
Wheaton, Illinois 60187
munn [at] interaccess.com (Preferred)    OR    commre [at] aol.com
HandsNet HN3628
Voice 1-708-221-4452