Cohousing-L Mailing List: Reserve studies [was Tree Management: Overgrown Trees in Co-housing Communities

[Sharon Villines (sharon]

The tree management question began as a Reserve Study question — should there 
be a lump sum in the Reserve Study for replacing all the trees?  

This is a question that emphasizes the difference between cohousing and 
commercial residential real estate. Reserve studies, my aunt, the forensic real 
estate expert witness, used to say, are extremely important in commercial real 
estate, including residential real estate. The reserve study expert who did 
most of Takoma Village Cohousing’s reserve study said the same thing. 

Commercial real estate of all kinds operates on a principle of 30-50 year 
massive rehabs, even teardown and rebuild every 30-50 years.

Cohousing is interested in lasting “forever.” 

There are always exceptions and people argue about whether it is 30 or 50 or 
100 years, or rehab or tear down, or it depends on financing and market 
opportunities. But the point is that much of the Reserve Study advice is given 
with commercial residential real estate in mind. 
As an example, the trees will be maintained minimally in commercial properties 
because they might all be replaced in 30-50 years with a new design for the 
property. In cohousing, the trees are more likely to be maintained tree by tree 
based on their condition, expected lifetime, and current use/needs of space.

So for cohousing, it makes more sense to budget for tree maintenance and 
replacement in the operating budget with the ground cover, bushes, etc., than 
to budget for a grand redesign. The exception would be if a grand redesign is 
something planned from the beginning — we will develop the landscape in 5 years 
because it is important, but we can’t afford it now. Otherwise, trees are 
things you think about yearly because you are building a life, not a profit. 
You aren’t sitting across town or the country, counting the years until you 
will totally rehab, tear down, sell, repurpose, etc.

So for better planning, remember this difference. 

In the cohousing and condo markets generally, it seems that real estate agents, 
brokers, and banks handling individual housing unit sales are oblivious or have 
very low standards and aren’t paying attention to reserves, savings for future 
repairs. Are they adequate? When people wake up, some have, they will value the 
property based on reserves as well as condition and market prices. There are 
buildings in Manhattan and other markets where agents will not sell units in 
some buildings because they know the finances are not sound.

Sharon
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Sharon Villines
Riderwood Village, Silver Spring MD
Formerly of Takoma Village Cohousing, Washington DC