Re: HELP MAKE COHOUSING MORE AFFORDABLE
From: KJ (pumpkin2282yahoo.com)
Date: Thu, 21 Nov 2013 11:32:05 -0800 (PST)
I couldn't agree more with these thoughts.  Some of the problem is that it is 
in almost everyone's interest to put home buyers in large homes that are 
expensive upfront and expensive to maintain.      The mortgage broker, realtor, 
bank will all make more money on the sale of the home. Construction and 
development companies make more money on larger homes.  And the city will make 
more property tax revenue on a more expensive home.  

Homeowners are the losers in this scenario.  Not only are they paying more up 
front and more in the long term with interest, they are paying more in 
utilities to heat and cool a larger home, and of course maintenance and lawn 
care. 

However, according to the National Board of Realtors, the average US homeowner 
only stays in their home for 4 years!  (This is why i call home-buying "renting 
for the rich").  At 4 years in most US housing markets, the average homeowner 
will never accrue any equity in their homes, and will either have to sell at a 
loss or break even.  

Instead of building homes worth 100, 200, 300k, and trying to subsidize people 
who can't afford to live in them, why don't we instead try to build smaller, 
more efficient homes?  There is a movement of people who are trying not to live 
beyond their means, to pay off their mortgages quickly, ie 5-15 years instead 
of the traditional 30.  There is a tiny house movement, with people choosing to 
live in tiny or small homes.  

Cohousing does allow people to share resources which they would otherwise not 
be able to afford, and the model is an excellent model for moving forwards.  
But instead of trying to find unique ways of financing, perhaps we can change 
the way we design and build our homes to make them less costly to build and to 
maintain.  Obviously there are extra inherent costs with co-housing, as we've 
discussed many times on this forum.  

Here is an example of a future tiny house village, which uses some of the 
principles of co-housing, such as shared common spaces. Since these homes are 
so small, they should be affordable, even in a pricey real-estate market 
(Sonoma County) and fees to maintain the common areas/laundry etc. (pricing has 
not yet been established, so I may eat my words on this later(!).   
http://www.fourlightshouses.com/pages/the-napoleon-complex. 

One thing I've found with banks, mortgage brokers and traditional financial 
models- they all tend to radically overestimate how much home one can afford.  
Even to this day, after the mortgage crisis etc.  

Some of you may be familiar with Dave Ramsey, a non-traditional personal 
financial guru, radio talk show host, speaker, author.  Regardless of whether 
you buy into his financial advice or not, his advice on homeownership, buying 
vs. renting and mortgages is excellent.  I have provided some interesting and 
useful links from his website:

The first is the "How much house can I afford?" tool.  The results will be much 
lower than what you will find from a traditional calculator from say Zillow or 
on you bank website.  This is because Dave believes you should only spend x% of 
your monthly take home pay on housing, and he is firm about this principle.  It 
is an excellent tool for making sure homebuyers are being REALISTIC about their 
home budget, not just wistful:

http://www.daveramsey.com/elp/mortgage-calculator-article#/first_time_homebuyer

Basic advice about popular mortgage loans and the rent vs. buy debate:

http://www.daveramsey.com/blog/mortgage-loan-dos-and-donts
http://www.daveramsey.com/article/the%2Dtruth%2Dabout%2Dreal%2Destate/lifeandmoney%5Frealestate/

Calculator for those who already have a mortgage:

http://www.daveramsey.com/elp/mortgage-calculator-article#/entry_form

Home-buying tips:

http://www.daveramsey.com/home-buying-tips/home/

To affordable cohousing,

KJ 


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> 
> The affordability issue is a knotty one because someone has to pay the 
> difference between what it costs to build and maintain a home and what the 
> below market or discounted rate is to the future owner of the affordable 
> home.  If it costs $100,000 to build a home but the buyer can only afford 
> $80,000 then someone or some entity has to make up the difference.  It's not 
> free.  If it costs $100 a month to maintain a home but the owner only has $90 
> then someone makes up the $10.  And as costs rise if people haven't figured 
> this into their budget when buying the home ... well  you can see the train 
> wreck.  That's why more counseling and help budgeting for would be homeowners 
> is so vital.  
> 
> 
> 
>> 
> 
> 

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