Cohousing-L Mailing List: Re: The "lot" development model

[Pablo Halpern (phalpern]

I Wrote:
>
> >Real-life example (numbers are very rough, just to make the point):
> 
> >Our common costs and land work out to about $100,000 per house. If we sol
> >plots at $100,000 apiece, then someone building a a $80,000 2-bedroom 
> >structure would pay $180,000 total for their house and land. This is 
> >reasonable or a bit high. However, someone building a house 50% bigger th
> >costs $120,000 to build would pay $220,000 for their house - quite a barg
> >for such a large house. Someone else building a small $60,000 1-2 bedroom
> >house would pay $160,000 for their house - way above market rate for such
> >small house.

mtracy [at] ix.netcom.com (Martin Tracy) responded:
>
> Ok, so it seems to me you are saying that the number of higher priced hous
> must be equal to the number of lower priced houses.  I can understand this
> what about the average sized houses?  They are economically "neutral", are
> not?  Couldn't they be lots instead of houses?
> 
> What if you have thirty households.  Ten build $180,000 houses + lots, ten
> $220,000 houses + lots.  The remaining ten lots could be sold either as $1
> lots or as $200,000 houses, right?  Am I missing something?

First, I want to clarify something. Rob Sandlin was shocked to here that New 
View's land cost about $100,000 per house. What I was talking about was 
total *common costs*, not just land costs. It also includes undividable 
items such as the driveway and parking, utility lines, pedestrian path, 
septic system (a big cost item), legal costs, permitting costs (another 
expensive item for us), site design, the common house, etc. All of these 
costs put together make up more than half of what I have called the "common 
costs." In addition to land costs, these costs can vary significantly, 
depending on zoning, the site topography (ours was a bit challenging), the 
availibilty of town sewer, town politics, etc.

Now, as to whether we could have broken things up so that the high and low 
priced units were built "as a package" but the mid-priced units were sold as 
lots, I don't see how this could be practical. What is to prevent someone 
from buying a "mid-priced lot" and then building a half-million dollar Frank 
Loyd-Wright house on it, taking advantage of the bargain land price? If I 
had one of the $220,000 "expensive" houses, I would resent paying $120,000 
for my land (effectively) while someone else could build whatever they want 
on a $100,000 plot. It doesn't matter if the Frank Loyd-Wright house was 
designed and built by Frank himself for his own use for only $100,000 plus 
his own labor. The problem remains that he built a more valuable house and 
paid less for his plot. Trying to equal this out could be a nightmare that 
would dwarf the problems we had in trying to set a pricing policy.

- Pablo

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Pablo Halpern              (508) 435-5274         phalpern [at] world.std.com

New View Neighborhood Development, Acton, MA, U.S.A.
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