Cohousing-L Mailing List: Re: Trading Systems

[Andrew Watkins (aw_ch]

Hi Ann
Very valid points about financial imbalance. 

In article <001601c1dc93$baf4e780$0c03a8c0 [at] capu.net>, 
zabaldo [at] earthlink.net (Ann Zabaldo) wrote:

> Andrew -- some questions for the long term because I don't know much 
> about financing a home in the UK...if a household can't raise enough 
money for a deposit how will they be able to finance a house? 

At the moment it is possible for people in employment to get near 100% 
loans. we have people in the group currently living in social housing who 
could afford and manage say a 70k house if such a thing was actually 
available in this area. Its possible to build a 70k house but most 
commercial developers wouldn't bother when they can put a 120k house in 
the same plot.

The main problem at the moment (as I see it) is that a period of steady 
growth in house prices has benefited existing homeowners but left those 
just starting out or in the rented sector far behind.  The situation is 
much worse further South and in London of course. but also affects the 
Rural villages around here thanks to planning restrictions causing demand 
to outstrip supply.


> Rather than sweat equity wouldn't it be better to find a source of 
> funding for their unit -- do you have any institutions that provide 
funding for folks needing affordable or low income housing?  (Who BTW 
would oversee  the "sweat equity" that the household would be putting in?)

This is why I am asking the question, I'm not convinced that it will work 
and would like to hear about how others tackle these sort of problems.

> 
> Nothing in development is "free."  Using sweat equity means somebody 
> else
> pays.  Sometimes the group is willing to create a pool of money that can
> support others in the group that need it.  But I've rarely come across 
> folks
> w/ enough "spare" cash who can do this.  It does happen tho'.
My hope is that some of the people in the group, particularly the older 
ones who are 'downsizing' will become net investors in the project. They 
will effectively finance any rented or rent to buy properties on the site. 
Their payback is that the rental income goes back in proportion to the 
investment.  This is of course another instance of 'to those that have 
will be given' but at least people will be investing in their own 
community rather than what? oil shares ?

There are grants available to support people moving out of social 
(council) housing into private accomodation. e.g. 20% of the house price 
provided as a deposit. on resale they have to pay back 20% of the sale 
price so the grant giver gets a pro rata benefit of any price inflation.



> 
> Perhaps others have some suggestions -- I'd love to know myself as 
> making
> cohousing "affordable" is a big issue. (I mean besides using financial 
> or
> gov't institutions.  Any private sector support solutions out there?)
I note that in the cohousing book, they point out that although many 
groups have aspirations to affordability the ones that have been sucessful 
are composed almost entirely of people who need affordability rather than 
a mix. I guess that points out the conflict of interest.

> I think lack of affordability and egalitarian values in this movement 
> create one of the stickiest problems at this current stage in cohousing.
Our starting point is that affordability is one of our goals and we will 
research these issues carefully.

Thanks Andrew
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