Cohousing-L Mailing List: Re: Incentives for early joiners

[Mariana Almeida (mqa]

Again on the issue of rate of return for early (risky) investment:

I dont know how you can guarantee a *particular* rate of return for early
investment, but there really should be one. Otherwise, people who have
early money may withhold (some of) it because they can earn better interest
rate in another investment. These people are trying to save for the
downpayment and they have a choice on how they will save it / invest it.
One way is to invest in a speculative real estate deal, another is to keep
it in mutual funds or whatever.

The issue to me is that the early risktakers make it possible for the
project to exist at all. They make it possible for people to buy in when
it's more or less a sure thing. From the hindsight perspective, it seems
like it was always "a sure thing" (I mean it got built, and we're moving
in, right?) But the reality is that it could have flopped and those people
who put in money early were risking losing it all. I feel that the
resentment of latecomers is narrow-minded. 

Also, there is the issue of affordability rolled in there. Some people may
be better able to afford a unit if they can invest their money with a 50%
rate of return. (Esp. if this is rolled into the asking price without
having that interest taxed.) 


Mariana
SF East Bay Cohousing 
Looking for a site in the hottest real estate market of the nation! Goddess
help us!


At 08:36 PM 4/21/00 -0500, Lynn Nadeau wrote:
>Dear Hans, 
>
>I don't know how you can guarantee any early joiners any sort of 
>financial perks without shooting yourself in the foot, so to speak. 
>Unless  you have a clever scheme all worked out in advance, guaranteed, 
>that gives you a buy-in price range you feel is affordable, a density you 
>feel is reasonable, and a milling crowd waiting to buy in so you can sell 
>it all right away. 
>
>Otherwise, you are more typically in the situation where all sorts of 
>things could drive up your costs, over time, leaving you in a big bind. 
>And the potential resentment that hard-working latecomers might feel, 
>about having their buy-in prices jacked up so that the early joiners can 
>"get paid" ..........
>
>There will always be people who DO do more of the work, and there always 
>will be people who do more than other people know they do. There will 
>always be some degree of emotion around the work-contribution issue. X 
>works less, but he's older and tires easily, Y is obsessed and works more 
>than anyone ever asked for, and then feels unappreciated, Z can't find 
>time to work, and feels guilty about it, etc etc. It seems the best 
>approach is to ACKNOWLEDGE people's contributions with abundant verbal 
>recognition, written recognition, one on one, and whole group, as often 
>as possible. 
>
>And, like so many of the other issues that keep popping up, the 
>underlying issue is not how to police people or punish or reward them, 
>but how to increase community spirit, how to get people feeling good 
>about what's happening and their participation in it, and so they WANT to 
>do all they can. 
>-------------------------------------------------
>Some other ways to allow some people financial recognition of their work 
>or money-at-risk: 
>You can consider the hazard-strewn path of paying people for particular 
>tasks or jobs, and the payment can be in cash or equity credit. This 
>works best if it's clearly a situation where otherwise you need to hire 
>an outsider, and the insider has already given abundantly as a volunteer. 
>And this still has a great risk of building resentments-- Why is HE paid 
>when I am volunteering? This was the only issue that got really messy in 
>our early years: I wouldn't recommend it, but some groups have done it 
>successfully. 
>
>You can also make a decision as a group to accept an interest-bearing 
>loan from a member, with a written contract. We did that a time or two, 
>and it worked ok. 
>
>Lynn Nadeau
>RoseWind Cohousing