Cohousing-L Mailing List: Re: Lot Development Model

[BPaiss (BPaiss]

I guess its time to jump at least one foot into this lot modle thread.  As
has been already mentioned the cost of land and infrastructure is a
significant portion of a person's home cost.  Here in the Colorado projects I
have been involved with, we calculate that about 50% (that's right about
half) of the cost of a new home is not the sticks and bricks!  This means
that of people are going to build one at a time, someone(s) must come up with
the money to buy the land (which has been mentioned can be VERY expensive),
pay for the infrastructure and cover all Homeowner Association costs until
the rest of the community comes along.  This places a tremendous burdon on
those early residents.

One issue I have not yet heard is the dreaded effect that banks and appraiser
have on all development regardless of the approach. Again here in colorado,
lending regulations say that the cost of the "lot" must be only 25% of the
cost of the home.  So if your finished lot cost is $50,000 then you are
expected to build a $200,000 home.  So much for having the choice of building
smaller homes.  When a group plans to build everything at once you have the
option of creating additional equality by setting lot premimums to help
offset the overall cost of the home.  If a groups philosophy includes
creating affordable homes, it is possible to create an internal subsidy by
shifting some or a a great deal of the lot cost to other homes and help keep
the selling price of that home at a more resonable level.

Hope this helps.

Bill Paiss