Cohousing-L Mailing List: RE: Price increases, sweat equity

[Rob Sandelin (Exchange) (Robsan]

I assume you are a capital project model of cohousing, building
everything all at once as one large capital project.  This means you are
probably locked in to a certain level of finish.  Have you gotten your
bank assessment yet?  This can be sort of a nasty little surprise if the
bank assessor values your units at less than they actually cost to
build. This usually comes very late in the process, right before
mortgages. So if your assessor gives you a late surprise, be sure to ask
for a reassesment.

The trouble with working with banks is they are very fussy about who
they give mortgages to, and how much they will loan on a given project.
If a bank gets wind that someone borrowed money to make their
downpayment, its a bad thing.  So, one way to deal with this is to
create an underground lending system within your group.  If you have
folks that can loan money to others for downpayments, do so early, like
4-5 months before the mortgage paperwork gets filled in.  Having 5-6
grand suddenly "appear" in a savings account makes banks suspicious and
they start asking questions.  

Finanacial reality of home ownership is kind of grim, you need a good
steady income, a pretty huge downpayment in cash (meaning you saved for
several years or had some other assets). This is exclusionary, but it is
the reality of home ownership. Some people do not have the financial
ability to be home owners.  Cohousing does not change this, especially
the multimillion dollar capital project sorts. Its a bummer to lose
people you love. Maybe home sharing can open up some rental spaces?

As for sweat equity, use these opportunities to build community. Be sure
there are folks doing support work, such as childcare, providing food
and drinks, and doing the gopher work, as well as whatever construction
you sign up to do.  Make it fun, take lots of breaks, squirt each other
with hoses, etc.  If its really fun and a joy to be with each other
(which is really great when it happens) then people will come.  If its a
tedious drag, an obligation you HAVE to do (Which sweat equity can
become very easily) you will need all sorts of accounting and tracking
systems to force people to show up and work.  Its your project, you can
make it what you want.

Having a regularily scheduled work party, like every Saturday afternoon
is good. And having a posted list of tasks helps people who can't come
on Saturday pick up something they can do on Wednesday evening after
work.

Rob Sandelin
Sharingwood

Original Message-----
Sent:           Monday, July 01, 1996 4:43 PM
Subject:        Price increases, sweat equity
Hello all,
Originally we estimated our prices about a year ago, as best we could at
the
time, warning that they were estimates only. Now we are approaching
construction and it is clear that our updated estimates will be higher
now
for a variety of reasons. Soon we will have bids from contractors and
arrangements with lenders and we can give final prices. We have some
sense of
how much increase people can handle and how much would mean losing
people who
have worked hard and long for this; of course we don't want that to
happen.
So we are looking carefully at how to keep our budget within bounds,
what we
can cut without compromising important design elements, and what to do
about
the inevitable increases in prices and their effect on a few people who
might
be closer to the edge financially than others.

One idea from several members is to take on some fairly big projects as
sweat
equity: fencing around the perimeter and for privacy between parking and
some
dwellings; finishing parts of the common house that don't have to be
finished
at first; a pedestrian bridge across a wooded ravine connecting some
homes to
common house; of course a lot of landscaping including paths, plantings,
etc.
Listening to CoHousing voices of experience, we are very leary of
counting on
sweat equity for anything that has to be done for our Certificates of
Occupancy. Even beyond that, we are wondering how much is realistic
given
jobs, families, moving-in exhaustion, and just general maintenance
required
for a community like this. We try to have some idea how much time we
each
will put in once we are all living here, and yet we know it will be so
different than what we are able to imagine now that it is hard to say
with
any certainty.

I am wondering about other groups' experiences with price increases. How
have
you handled them? Have you found ways to help members who can't manage
the
increases on their own? And how much sweat equity is just right, how
much is
overload? 

Please reply to me or to the CoHousing List, whichever you prefer. In
advance, I appreciate your ideas and suggestions.                 

-- Elana Kahn, for Westwood CoHousing Community