Re: Affordability
From: Buzz Burrell (
Date: 08 Jun 95 17:27:44 EDT
Rob wrote:

>If a great person, who
>is a single teacher, with an income of $22K a year and no savings can't 
>financially qualify for any projected units, the sooner everybody knows 
>that the better.  Either you can start looking for mortgage support 
>programs early, or the person can realize that the reality of the dream 
>of cohousing is out of their reach.

>I recognize that the last sentence above is great material for the "the 
>capitalist system sucks" types of flame mails.  Do us all a favor and 
>rant your flame to me personally.  Thanks

I'm not addressing this to Rob, because the failure of our housing industry is
not his personal concern... it's all of ours.  And rather than "flame mail", I
think he accurately pointed out how cohousing is not affordable, and I would
like to thank him.  (And I do "think the capitalist system sucks"!)

As he already pointed out, "affordability" is defined not as a home price, but
as the price at which a certain percentage (often 30%) of people can afford a
home based on the incomes in that demographic area vis a vis the home prices.
This figure changes as the interest rates change (because that affects the
monthly payment which affects the income needed to qualify for the loan).

To cut to the quick, in Boulder County, 37% of the population (based on a family
of 3 people specifically) makes less than $29,000.  This is considered the
affordable benchmark for our area.   $29K qualifies one (generally speaking) for
a house that costs $75k - $85k.  In the City of Boulder MLS (the Multiple
Listing Service showing all houses for sale), the absolute cheapest house - not
the average but the dirt bottom building one can possible buy - is currently
listed at $154,900.  

Conclusion?  Big, big, problem.  As Rob said, a good thing to keep in mind up
front;  going to see your loan officer is just as important as reading the
cohousing book.

I think rather than "ranting" about capitalism, this should be considered a
wake-up call.  Cohousing as I've seen it usually defined, is factually not
affordable.  At least in our area, it is not even affordable for the person with
50% of the average income.  A house at Nyland is suppossedly going on the market
this week at about $230k (don't quote me on this).   Using Rob's 2 1/2:1 ratio
(the FHA loan qualifications), that means a family would need to be earning
about $90k/year to buy it, figuring closing costs and a minimum down payment.
That income level is almost twice the AMI (Area Median Income) for Boulder

My own conclusion:  We need to be realistic and creative at the same time, and
be open to redefining what cohousing is suppossed to look like and the process
by which it is accomplished.  "Marketing" cohousing IMHO is very much secondary
to creating a product that is viable to begin with.  Furthermore, "diversity"
and many other positive attributes of community become pipe dreams without the
"affordability" component.  

The cohousing information I've seen in the books and magazines is glaringly not
addressing this pressing issue.  I hope the coho movement begins to actively
pursue all strategies and possibilities, and not limit ourselves to what has
been done in the past.

--      O       Buzz Burrell  |  72253.2101 [at]
  --   <^-          The Republic of Boulder (Colorado)
--   -\/\               "Time flies like an arrow;
         \               Fruit flies like a banana".

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