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

[Pablo Halpern (phalpern]

<Pablo and Martin continue a discussion on pricing the "lot" model>

> From: mtracy [at] ix.netcom.com (Martin Tracy)
>   
> Ok, I see what you mean.  Your last argument seemed based on "fairness" ra
> than lot cost.

Good, we're making progress :-)
This is a complicated issue to discuss, although when we were in the middle 
of it, it seemed obvious that other directions were dead-ends.

I Wrote:
> >No, you have to sell the $120K home (plus $100K common costs) for $250K, 
> >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 differen
> >does it make? The important thing is that it is much harder to make a pro
> >on building the house if the house is not built by the developer (us).
> 

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

I don't think your particularly dense. In theory we could sell lots for the 
mid-priced houses, if we put restrictions on how big a house and how many 
bedrooms you could build on that lot, so that people don't use it as a way 
of buying a mid-priced lot and building a high-priced house on it, the 
circumventing our cost-distribution system. The operative term that you used 
is "easily." No, it could not be done easily because:

1) I doubt there are any houses in New View that are "just right," neither 
   generating a profit nor a loss.

2) The household buying lots instead of houses would have a great deal more
   flexibility in their house design than every one else. This would not be 
   fair to the rest of the group, especially those paying more for their
   houses.

3) The bank wants to see all plans and have a construction schedule before 
   granting a construction loan. This dramatically reduces the advantages
   of the Lot Development Model. It means that owner-building is all but
   eliminated. This problem would be easier to surmount if we didn't have
   to pay so much just to hold on to some land and build a septic field, 
   etc.

4) Our budget is so tight that I doubt many people could afford their houses
   if we totally lost the economy of scale.

5) Our house-pricing policy was so hard to achieve that I don't thing there 
   is the stomach in the group to hash out policies to make this all fair
   so that the people buying lots aren't taking advantage of the rest of
   the group.

As you can see, there is no one thing that makes your suggestion impossible 
to implement. In our case it was a preponderance of interrelated problems. 
If a group made selling lots a high priority item, it probably could be 
done. But not "easily." The least difficult thing is probably 100% LDM. If 
that is impossible, the next least difficult thing is 0% LDM.

I don't have time to proof-read the above. Sorry for any sentence fragments, 
misspellings, and poorly-thought-out concepts. Hope its useful.

- Pablo

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

New View Neighborhood Development, Acton, MA, U.S.A.
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