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

[Martin Tracy (mtracy]

You wrote: 
>> <Pablo and Martin continue a discussion on pricing the "lot" model>
  
>Now we get the the heart of the matter. The price of the lot and deveopment 
>*does* vary with the price of the house because ...  as a rule, people don't 
>build expensive houses in poor neighborhoods where land is cheap and people 
>don't (can't afford to) build cheap houses in rich neighborhoods where land 
>is expensive. In a mixed-price development such as ours, we had to find some 
>middle-ground and then make it work for those building inexpensive houses. 
>Frank "pays less for his plot" because he is effectively building an 
>expensive house in a mid-priced neighborhood. Maybe this is fair (he is 
>giving up the advantages of being in a rich neighborhood) but it is not 
>practical if we still want to include less-well-off families.

Ok, I see what you mean.  Your last argument seemed based on "fairness" rather 
than lot cost.

>No, you have to sell the $120K home (plus $100K common costs) for $250K, not 
>for $220K. Otherwise there is no profit that can be used to subsidize the 
>smaller houses. What portion of that $250K is for the land? What difference 
>does it make? The important thing is that it is much harder to make a profit 
>on building the house if the house is not built by the developer (us).

Well, I must be particularly dense about this.  I understand that the profit 
you 
make from big houses offsets the losses you incur from small houses, and this 
could be a wonderful thing.  But it seems to me you must have some houses which 
are priced "just right" in the middle.  Since you are neither going to have a 
profit nor a loss from these houses, you could as easily sell the lots, right?

Or do you mean that New View wants to make a profit on most all the houses?  
Nothing wrong with making everyone's house more expensive if the money goes to 
an agreed upon goal, like a common house, I suppose.  Or maybe the "affordable" 
units are such a loss that many of the other houses have to produce a profit to 
pay for them?

If I'm not getting any closer to "getting" this, I'm afraid it's a lost cause.  
I believe you need to do what you need to do, and I look forward to seeing the 
final result.


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