Cohousing-L Mailing List: Re: The "lot" development model

[Martin Tracy (mtracy]

<Pablo and Martin continue a discussion on pricing the "lot" model>
 
>mtracy [at] ix.netcom.com (Martin Tracy) wrote:

>> Ok, so it seems to me you are saying that the number of higher priced hous
>> must be equal to the number of lower priced houses.  I can understand this
>> what about the average sized houses?  They are economically "neutral", are
>> not?  Couldn't they be lots instead of houses?

>> What if you have thirty households.  Ten build $180,000 houses + lots, ten
>> $220,000 houses + lots.  The remaining ten lots could be sold either as $1
>> lots or as $200,000 houses, right?  Am I missing something?

Pablo Halpern (508) 435-5274 phalpern [at] world.std.com responded:

>First, I want to clarify something. Rob Sandlin was shocked to here that New 
>View's land cost about $100,000 per house. What I was talking about was 
>total *common costs*, not just land costs. It also includes undividable 
>items such as the driveway and parking, utility lines, pedestrian path, 
>septic system (a big cost item), legal costs, permitting costs (another 
>expensive item for us), site design, the common house, etc. All of these 
>costs put together make up more than half of what I have called the "common 
>costs." In addition to land costs, these costs can vary significantly, 
>depending on zoning, the site topography (ours was a bit challenging), the 
>availibilty of town sewer, town politics, etc.

Yep.  I thought that's what you meant.  We are talking about land and all 
common 
development costs, divided equally by the number of homes.

>Now, as to whether we could have broken things up so that the high and low 
>priced units were built "as a package" but the mid-priced units were sold as 
>lots, I don't see how this could be practical. What is to prevent someone 
>from buying a "mid-priced lot" and then building a half-million dollar Frank 
>Loyd-Wright house on it, taking advantage of the bargain land price? If I 
>had one of the $220,000 "expensive" houses, I would resent paying $120,000 
>for my land (effectively) while someone else could build whatever they want 
>on a $100,000 plot. It doesn't matter if the Frank Loyd-Wright house was 
>designed and built by Frank himself for his own use for only $100,000 plus 
>his own labor. The problem remains that he built a more valuable house and 
>paid less for his plot. Trying to equal this out could be a nightmare that 
>would dwarf the problems we had in trying to set a pricing policy.

One possibility would be to specify the size of the house that could be built 
on 
a lot.  Do you have any restrictions on remodeling?  Could someone buy a small 
house + lot and expand it into a much bigger house?

Why is a $100,000 land price a "bargain" if you're going to build a $220,000 
home?  If you were going to build it outside of cohousing, the price of the lot 
(and development) wouldn't vary much with the price of the house, would it?  
Why 
did Frank "pay less for his plot"?

If you separate the lot (plus development) price from the house price, couldn't 
you say that the $120,000 home was still subsidized by the profit from the 
$220,00 home, but that both had $100,000 lots?  Wouldn't the $120,000 home 
still 
be a bargain?

I have a feeling I'm missing out on a much larger principle here...

-- 
Martin Tracy, Los Angeles
mtracy [at] ix.netcom.com