Cohousing-L Mailing List: Re: Canadian Co-ownership [FWD]

[Fred H Olson WB0YQM (fholson]

Russell Mawby, CoHoSoc, Toronto  c/o TOMP [at] TVO.ORG 
is the author of the message below but due
to a listserv problem it was posted by the COHOUSING-L sysop (Fred).
****************  FORWARDED MESSAGE FOLLOWS *********************


>I would very much be interested in hearing more about this sort of
>"subdivision" of units, especially co-ownership.  Having one owner and
>a renter or housemate is common, having 2 unrelated adults in a single
>family house as co-owners is different and, as Dale suggests, perhaps
>an excellent solution to economic realities.
>
>Ideas, experiences?
>
>Rob Sandelin
>Sharingwood

Rob, one of the projects we have just begun - the Strata Project - is
aimed at exactly this issue.  We have brought together representatives
from banks, Canada Mortgage and Housing (our "HUD", but more so!) and
legal hotshots to find ways to "normalize" co-ownership.  It turns out
that there are at least 5,000 formally co-owned units in the city of
Toronto (pop. 380,000, Metro area +/- 2,000,000), of which the banks
knew almost nothing about, even though they lent them the money!

We are aiming particularly at the 2 - 8 unrelated adults scenario, but
are also dealing with buildings of up to 80 co-owned units.

You should know that co-op housing up here is a very different animal
than in most other places:  it's more or less a form of public
housing.  Of course, the great difficulty is that public money just
ain't there anymore, and co-ops have no access to conventional
financing because of the shared equity problem.  Banks like to
see neat lines around the "real estate" they get involved in.  In
other words, they do not want any other claimants to the proceeds
when the mortgage is in default.

Co-ownerships, because of the magic words "joint and severally
liable", do have access to convential mortgages, since everyone ends
up on title.  The problems arise when, 1) any one party defaults on
their portion, and 2) when any one party wishes to leave the arrange-
ment.  The co-ownership itself has to be able to pick up the slack in
case 1), and often in case 2) as well, since most people only have
access to the $100,000's that buying property takes through, you
guessed it, mortgages.  And what bank will offer a mortgage on
property that other people own?

Anyway, I have a selection of stuff to send you that might help
frame this issue as we see it here.  Could send me your address -
most of it would be better mailed than e-mailed.
The interesting aspect of this, to me, is that
1) people are already prepared to take the risk and leap into
co-ownership regardless, and
2) that the banks are actually willing to investigate this issue.
Our banks are _very_ big, very conservative, and very profitable.
If they are interested, there must be something to this.

Actually, a thought.  You probably don't know about real estate up
here.  Toronto was, for a few years, considered to be the most
expensive city in North America - more than Manhatten.  There were
certain people up here who were quite proud of that fact, "world-
class" and all that, but what it did was kill the housing market,
which is traditionally driven by first-time buyers (thus the strange
but true concept of starter homes).  I know that the banks are inter-
ested in this idea partly because it opens up a vital mortgage market
for them, namely the young, downtown urban professionals who are
continuing to rent because the price of property is still so high.

Perhaps they also feel guilty about their obscene profits, and want
to show they have a social conscience?

Russell Mawby, CoHoSoc, Toronto