Cohousing-L Mailing List: Mortgage Lenders and Regulators and # of rental units

[Fred-List manager (fholson]

Sharon Villines <sharon [at] sharonvillines.com>
is the author of the message below.  It was posted by
Fred, the Cohousing-L list manager <fholson [at] cohousing.org>
after putting the Calif. RESERVE STUDY GUIDELINES document at:
http://l.cohousing.org/CA.ReserveStudyGuidelines.pdf
--------------------  FORWARDED MESSAGE FOLLOWS --------------------
I received this question privately and wanted to forward my response
for everyone's enjoyment:

> I have read your emails below, and saved them because rentals have
> recently become a new question for our group.  From our research we
> have been told that our group would not be impacted by the number of
> rentals, because even though we are a condominium our houses are not
> physically connected. That those restrictions you are speaking to in
> your emails only apply to condominiums that exist under one roof or
> are physically connected buildings, duplexes or triplexes.

I have never heard that this distinction between attached units and
free standing units made any difference. The issue with rentals is the
strength of the HOA's management and finances. Communities with lots
of rentals often signals a community in trouble. Owners are renting
because they can't sell their units. While this has not been true in
cohousing (so far as I know) renters have the reputation of not caring
for units as well as owners do.

The data very hard to get. The numbers I've heard are 10% and 15% but
even in professional sources, I've seen no data. Three sources you
might check out are:

1. Your local bank or a large mortgage broker, even a real estate
agent who handles lots of condominiums in your area. In large cities
condos are common place but in smaller cities and villages they are
not and for this reason suspect even if they have no rentals, so ask
in your area. Ask specifically how many mortgages they know are turned
down because of too many rentals. Otherwise these sources will just
repeat what they have heard.

Tell them you are working on your bylaws and need a number so you have
a reasonable restriction on rentals.

2. California has the best and most extensive information available to
normal people (there is a $400 text on Amazon). There may be some
advice there. I haven't looked. I attached the 2012 Version. (I use it
in my workshop on reserves.)

3. Association Reserves has a blog on HOA financial consideration.
This is a reserves issue as well as a mortgage issue because it
affects financial planning. Absentee owners are thought to be less
likely to vote for capital improvements, large maintenance projects,
or condo fees. (We haven't had this problem but it's a possibility.)

http://www.reservestudy.com/services.

Association Reserves also has a do it yourself reserve study and a
component list that is very helpful. (They got tired of the excuse
that people couldn't afford to have a study done. Do it yourself is at
least better than nothing.)

Please let me know if you find any hard or even credible evidence,

Sharon
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Sharon Villines
Takoma Village Cohousing
Washington DC