Cohousing-L Mailing List: Cohousing Costs and Budgets

[Dan Suchman (71756.2661]

This is a reply to the message posted by Susan Pintus, Cornerstone Community,
Arlington, MA on 2/23/95:

You asked several questions about development costs:  What are the elements?
When do they occur?  How much does each element cost?  Who is responsible for
advancing these costs?  Where does the money come from?  These are the questions
that a developer faces.  

Before joining Winslow Cohousing a few months ago, I lived in Miami, Florida,
where I helped form two separate non-profit corporations that attempted to
create cohousing there. One of them, Broward Commons, continues to this day.
The other was called Miami Cohousing Project (MCP).  Like most cohousing
developments that have been completed (but not Winslow, where I now live), MCP
was pursuing  a "developer driven" model of cohousing.  We recognized that we
did not ourselves have the  expertise, capital or willingness to take large
financial risks needed to be the developer.  We sought, instead, to associate
with an experienced developer (who also owned a construction company) in a
manner that we hoped the developer would find mutually beneficial.  In short, we
would provide the developer with contracts (and deposits) for at least 50% of
the completed units before the developer would become obligated to build.  In
return, the developer would advance all of the costs of purchasing the land and
constructing the improvements.  These costs, along with a reasonable profit,
would be recovered by the developer as we purchased the finished units.

I believe this model would have been successful, based on my personal real
estate development experience (I am a real estate laywer that has represented
developers.  But I am not myself a developer).  MCP found suitable land, a
willing and experienced builder/developer, and an architect.  We had good media
coverage and a small grant from the Univeristy of Miami to bring in McCamant and
Durrett for a Getting It Built workshop.  Unfortunately, we could not find a
sufficient number of people who were both finanically qualified to purchase
units and seriously interested in living in cohousing.  I suspect that the
problem was regional/cultural.  There are no completed cohousing communities in
South Florida, while in the Seattle area there are several.

It was not clear to me from your message whether TCC in Boston is to act as your
developer, or only as a consultant, to what extent they would share expenses
with you, and how (if at all) they would recover those expenses.  I suggest that
you find a developer with whom you can share both risk and expense in some
manner.  If you would like more detail about the proposed arrangement between
MCP and its developer I would be happy to share with you (or post to this
mailing list) a rather detailed letter of intent that was drafted.

If you are determined to bear some or all of the development risks and costs,
you might also find useful a spreadsheet that MCP and its developer created to
analyze the the various development costs and get some idea of what the finished
units would have to sell for in order for the venture to be profitable for the
developer.  I don't know of a convenient way to email or post this document to
the mail list. However, I could send you a copy by "snail mail" or fax.

Please let me know if you would find any of these materials helpful.  I wish you
and your group the best!

Dan Suchman,
Winslow Cohousing Group, Bainbridge Island, WA